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Three Recent, Must-Read Articles on the Battle for Clean Energy at the State Level

4 min. read

Over the past few days, I've run across several articles which really should be must-read for anyone involved in formulating and/or implementing energy policy at the state level.

First, I strongly recommend the article, New York Just Showed Every Other State How to Do Solar Right, by Mother Jones. The gist of this article is that New York is getting serious about promoting clean energy and changing the existing, dysfunctional model for utilities in the Empire State.  Here are some key excerpts.

Under a new order from [New York's] Public Service Commission, utility companies will soon be barred from owning "distributed" power systems—that means rooftop solar, small wind turbines, and basically anything else that isn't a big power plant...The move is part of a larger package of energy reforms in the state, aimed at setting up the kind of futuristic power system that experts think will be needed to combat global warming. The first step came in 2007, when the state adopted "decoupling," a market design in which a utility's revenue is based not on how much power it sells, but on how many customers it serves...Now, under New York's most recent reform, a utility's revenue will instead be based on how efficiently and effectively it distributes power, so-called "performance-based rates." This, finally, provides the incentive utilities need to make decisions that jibe with the state's climate goals, because it will be to their advantage to make use of distributed energy systems...So far, the response from utilities has been receptive...The change in New York could become a model for other states..."Everyone is watching to see what's happening here...It's really a model of what a utility could be in the future."

Second, I strongly recommend the Washington Post op-ed, Clean power is right for Virginia, by former FERC Chair Jon Wellinghoff. The argument here is simple, fact-based, and powerful. In short, it is that: 1) criticism by fossil fuel interests and their lackeys (e.g., the State Corporation Commission) of the EPA's proposed Clean Power Plan gets it exactly backwards (in fact, "Virginians’ utility bills will go up if the state chooses not to cut pollution through renewable energy and energy efficiency"); 2) counting on natural gas is a big mistake, because although it's cheap now, its price is going to go up, big time; 3) far from being treated unfairly by the EPA, Wellinghoff explains that "Virginia is 70 percent to 80 percent of the way to meeting its plan goals with coal plant retirements and fuel conversions that were planned before the CPP"; and 4) by a combination of energy efficiency and increasingly inexpensive solar and wind power, Virginia ratepayers can enjoy "a once-in-a-generation opportunity to make the economy more efficient, create jobs and cut people’s energy bills." That's a win-win situation that no state should pass up.

Finally, everyone should read today's front-page Washington Post story, Utilities wage campaign against rooftop solar, which argues that, "Sensing a threat in rooftop panels, the utility industry and its fossil-fuel supporters are waging a determined campaign to raise the cost of solar power." Fortunately, the utilities have mostly been losing that campaign in the political arena, as people across the political spectrum (e.g, the "Green Tea" movement) who support solar power have fought back successfully.

Unfortunately, the utilities have turned to more friendly territory -- the "captured" regulatory agencies - "where industry backers have mounted a more successful push for fee hikes that could put solar panels out of reach for many potential customers." In the end, of course, this is a losing battle for utilities, as solar prices are plummeting (with no end in sight), as are power storage technologies ("The cost of energy storage is expected to drop to US$100 per kWh in the next five years, against US$250 now").

The result if utilities don't adapt to these revolutionary changes? As I wrote in January, quoting David Roberts' superb piece, Rooftop solar is just the beginning; utilities must innovate or go extinct, the "death spiral" awaits. And, paradoxically, the more the utilities fight change, the faster and harder change could come, to the point that the failure to adapt and evolve could lead to sudden extinction for Dominion and other entrenched, protected utility "dinosaurs" out there. The choices are theirs to make, of course, but at least so far, with a few exceptions, there's little sign that they've been choosing to make the right ones.

Topics: Public Affairs