Advanced Energy Perspectives

Recently states have been hearing pushback from utilities on some standard energy policies that have been adopted around the country. Net metering, for example, has been criticized by utilities as excluding a subset of customers from paying a portion of the costs of utility infrastructure that is embedded in rates. Energy efficiency standards have been targeted for similar reasons. Last week, we looked at recent stories in the media describing traditional utilities as “dinosaurs” or in a “death spiral.”

Discussion of the challenge to the utility business model posed by distributed generation and energy efficiency continues, with a mix of handwringing and saber rattling.

The media has grabbed onto the brewing hubbub over President Obama’s nominee to the Federal Energy Regulatory Commission (FERC). Ron Binz, Obama’s pick for FERC Chairman, boasts considerable experience as a Colorado state regulator and energy consultant and has received praise from industry and former regulators alike. Ben Fowke, who heads Xcel Energy, a major Colorado utility, noted that as a result of Binz’s leadership as utility commission chairman, “customer costs remain well below national averages, emissions were reduced by more than 80 percent, and fuel diversity - critical for managing customer costs going forward - was significantly enhanced.” But that has not protected Binz from vocal criticism such as this WSJ editorial, which is unusual for FERC appointments.

“We stand at the threshold of an enormous economic opportunity,” declared Graham Richard, CEO of Advanced Energy Economy (AEE), as he opened the “Pathway to 2050” Conference in Sacramento on August 20. “We can’t wait for Washington to provide the answers. California must lead the way.”

Though it’s been quiet thus far, it is hurricane season, which gave the new report from the White House on power outages from severe weather even more currency than it would have otherwise. The report, a product of the President’s Council of Economic Advisers and DOE, is titled “Economic Benefits of Increasing Electric Grid Resilience to Weather Outages,” but it’s really about the economic cost of widespread power outages from severe weather events, which have been on the rise over the past decade.