Much has been made of the battle between Tesla’s direct sales model and the franchise dealer network used by the “legacy” automakers. On the one side are typically well-meaning people who want to see EVs succeed for a variety of reasons, and on the other are typically well-meaning people who … [continued]
President Biden’s latest executive order seeks to level the playing field between tech companies, manufacturers, and consumers. Will it play in Peoria?
A “natural monopoly” is a service or product that gets cheaper as the market grows. Hempling says that the idea of a natural monopoly has changed dramatically in recent years and that many have lost sight of natural monopoly’s place in energy markets.
In the pathway to 100% renewable energy lie electric utilities. Since the time of electrification until the 1990s, every electric utility was a monopoly — it owned everything to deliver electricity from the power plants (and sometimes even the coal mines) to the transmission lines to the substations to the distribution lines to the meter on your home or business. With a market monopoly, utilities have enormous political power to promote or avoid change.
Fed up with their electricity provider Alliant Energy, one of Iowa’s largest monopoly utilities, Decorah area residents decided to explore their options for pursuing cleaner, local energy and how the city could create a municipal electric utility for its 8,000 residents and business community. Advocates formed Decorah Power, a grassroots group of residents and community organizers making a clear case for municipal control, and the group has been garnering support for putting the public back in their public utility.
What can a city do to advance clean energy locally, if its state commissioners and legislators are not willing to take their jobs regulating these utilities seriously?
In most states with regulated, monopoly utilities, utilities are compensation based on two factors: energy sales and a return on capital spent, such as when they build a new power plant. Although energy efficiency standards have been layered on top of this model, the fundamental incentive for the utility remains “build things, get rewards for shareholders.”
A wave of consolidation has swept across the U.S. economy over the past decade, reshaping already-powerful corporations into financial and political powerhouses. The trend has taken particular hold among electric utilities, a sector where monopoly reigns virtually unchecked.
Utility companies are undercutting state regulation with their legislative lobbyists. And utilities are also bringing their monopoly market power to bear in previously competitive markets.
We’ll detail examples of each of these three disturbing trends, and ways to fight back.
Few people realize that the change from fossil fuels to renewable sources is just a harbinger for a phase of massive disruption in energy markets.
