“Byzantine” Laws Regulate Electric Utilities

In response to my piece yesterday on the integration of renewables in the grid-mix, frequent participant Gary Tulie wrote a wonderfully insightful comment, underscoring my point that, considering the smallish presence of clean energy in the U.S., the intermittence of solar and wind present very little reason for concern.  He goes on to discuss why, and discusses the role of load shifting, the improved prediction of supply and demand, better grid integration, geographical dispersion, and energy storage.

All perfectly true.  So why aren’t we heading in this direction at 100 miles per hour?  The biggest single reason is that the electric utilities are among the most conservative organizations on Earth, and, since they have no incentive to make any of this happen, are perfectly content with the status quo.  I’m not an expert on utility regulation, but, if it were in my power, I would make drastic changes in the way these folks are compensated in order to drive the things we all want so desperately, especially reduced consumption of on-peak power, the integration of renewables, and encouraging the introduction of electric vehicles charged with off-peak power that does not come from coal (preferably wind).

And speaking of electric vehicles, if you think my characterization of the utilities is unfair, ask yourself why so few of them have shown any real interest or initiative in the EV space.  Here’s an opportunity for these folks to be become the rock stars of the 21st Century; one would think the power companies would be doing everything they can to play a role of vastly increased importance.

I’m told that the legislation by which electric utilities are regulated is “Byzantine” (as opposed to merely “jumbled” or “confusing”) – mounting over a long period of time by people who developed increasingly clever ways to profit at the rate-payer’s expense.  I’m not sure that’s completely fair, but again, if I had the power to do so, I’d cut this stuff to the bone and start fresh.