Distributed Generation Means Trying Times for Investor-Owned Utilities

Here’s a good article that discusses a few different vicious cycles in which the investor-owned utilities (IOUs) find themselves.  As more people install solar (or whatever) on their properties, the infrastructure by which power is generated, transmitted, and distributed must be amortized over a smaller base, driving up prices, thus providing incentive for even more people to go to distributed generation.  This lowers the IOU’s credit rating, driving up the cost of capital, and putting even more financial pressure on these already-troubled organizations.

Of course, the time has come to re-regulate the utilities anyway. Over a century ago, we told them to give us cheap, reliable power, and they did exactly that.  Now we have a different mandate for them – one that contemplates renewable energy, energy storage, smart grid, energy efficiency, demand response, and electric transportation.  I don’t think that’s outrageous, btw; I think it’s perfectly reasonable for the citizens of the world to be able to change the rules every hundred years or so.