The answer to the transition to "the actual challenge of overhauling the entire U.S. power sector, which is still overwhelmingly dependent on coal, natural gas, and nuclear power," has won Bill Clinton many accolades with the artificial decoupling of electricity sales and utility profits, according to the post on this blog Less Juice: Clinton Wants Power Companies to Sell Efficiency.
However, such regulated decoupling has an insidious secondary effect: extending the obsolete utilities and regulators price controls business model. As can be seen in the electricity without price controls (EWPC) blog’s article Let’s Avoid Many Expensive Fiascos, state regulators will keep using their price controls powers to make exceedingly large risky bets that are bound to result in premature obsolescence. For more details read the EWPC article Forget Decoupling Under Price Controls.
I agree that with incremental extensions of today’s energy policy system, “renewable energy can’t make a go of it without a major overhaul of the nation’s electricity transmission grid.” However, by unloading the transmission (and also distribution) grid the financing requirements will be reduced. This can be accomplished by reorganizing the industry and simplifying systems rules with the EWPC market architecture and design paradigm. An EWPC Energy Policy Act will decouple physical distribution from retail sales and enable an integrated transportation (transmission and distribution) regulated (under tolls price control) market compact, under a responsibility to transport electricity of commercial quality.
Please take a look at the EWPC article The Smart Grid Transportation Utility, whose summary reads: “Dramatic and radical change is coming to the electric utility industry as the utility itself evolves to the smart transportation grid, under a complete rethinking of the electric industry. Front and back office generation and customer facing activities become free market activities under prudential regulations.”
Now is the opportunity to introduce federal legislation on electricity without price controls to solve once and for all the global electricity systemic crisis.
José Antonio Vanderhorst Silverio, Ph.D.
Systemic Consultant: Electricity
First posted on the Grupo Millennium Hispaniola Blog.
Reference: Obama’s Green Dream: Would His Renewable-Energy Plan Make a Difference?, The Wall Street Journal's Environmental Capital Blog