Can We Move Forward To The Future Of Electric Power?

Recently, utility efforts to defeat solar have been exposed in several Western states. SolarCity has allied itself with Renew American Prosperity (RAS), an advocacy group funding Checks and Balances, a group dedicated to holding utility regulators accountable. Other solar companies have allied with The Alliance for Solar Choice (TASC), a 12-member lobby group spearheaded by Sunrun (SolarCity was part of this alliance but recently pulled out).

Meanwhile, an investigation has begun into an Arizona commissioner’s communications with utilities.

Investigations have exposed utilities’ and utility finance companies’ ties to dark money organizations.

The cozy relationship between utilities and regulators has been exposed. Unfortunately, the issues like net metering are buried behind such manipulations. Net metering has some advantages, but can also result in solar owners not being properly remunerated, or not properly reflecting utility’s costs. It’s a compromise.

The worst part of this is that lobbying and dirty tricks undermine the path to necessary change. The decades-old policy of guaranteed rate of return on capital has been a lucrative windfall for utilities, a prop for rate basing their way into complacency. And it has motivated utilities to defend stranded assets rather than avoid them.

But that era is ending, and they are trying with all their political might to hang onto their decaying monopolies.

A more edifying result would be an open discussion about how to respond to the changing customer/supplier landscape. The public/private public utility commission (PUC) regulated power system is badly out of date. Attempts to rectify imbalances in a rate-based system that subsidizes some customers at the expense of others have been found wanting. The California Public Utility Commission’s early forays into time of use metering (TOU) are anachronistic.

Setting a fixed TOU annually by committee is unacceptable in the Internet era, as are schemes based on utility central data collection. They are both borne of ideas mired in the past and overlook the central problem. If electric power is to change, it must change its institutions first. Retail rates should reflect wholesale costs. That’s what TOU is about. That would be fair to both consumers and producers. But implementing TOU won’t do much good if we don’t do it on a real time basis.

But what role would a PUC play if it didn’t set rates? The California Electricity Crisis, artificially manipulated by Enron, exposed how weak regulation is, and how vulnerable we are to utility manipulation. We need to begin a fruitful discussion of how to prevent abuses, and how to move forward to a better system that embraces renewables and the other changes ahead, as we begin to navigate the stormy sea of climate change.

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