Smart Grid: Can the U.S Waste Billions in Taxpayer Dollars?

The question "Can the U.S Waste Billions in Taxpayer Dollars?" should be in the mind of every participant in the Smart Grid Interoperability Standards Interim Roadmap Workshop, that will be held at the Hyatt Regency at Reston Town Center, 1800 Presidents Street in Reston, Virginia. The workshop is open to the public and free of charge, after registering.

First posted on the GMH Blog on April 26th, 2009

Under the EWPC article U.S. CONGRESS, the COMPETE Coalition and Comprehensive Energy Legislation, James Carson has given six lobbyists like questions to object to the need, which I repeat again, for “comprehensive Energy Legislation, which the U.S. CONGRESS, the COMPETE Coalition and the general public needs to be aware of.” The last two of those questions are: Do you think the public is even aware of this issue? Do you think that those few who are aware of the issue care, or agree with you?

My response is very simple: U.S. CONGRESS, the COMPETE Coalition and the general public will become well aware when they learn that reform is needed to avoid wasting billions in taxpayers’ money, which IOUs are now asking to keep extending incrementally the monopolistic IOUs framework.

Believe it or not, in the cryptic EWPC post DOE's WISE NOI for an FOA, that I wrote following Mr. Carson’s post DOE Preliminary Guidelines for Smart Grid Funding is the key to be able to test the EWPC Framework. The guidelines on the Notice of Intent (NOI) to Issue a Funding Oportunity Annoucement (FOA) are not just “smart,” they are very wise, as they open the industry to innovations by ‘favoring’ coops and munis.

The guidelines are indeed signaling the development of business model innovation under competition in the federal market to replace the obsolete IOUs regulated business model of winning rate cases to regulators. If DOE do “raise the ceiling ‘after major electric utilities complained that the proposed $20 million-per-grant limit was too low to encourage commercial-scale deployment of advanced technologies,’” the large taxpayer money waste mentioned above is guaranteed to occur.

The IOUs Framework mindset applies to business as usual. That mindset is correctly for normal times. However, these are not normal times.

We are in a process where a new order is emerging, and creative destruction wipes out business models that run out of steam after many years. We are in fact experiencing a once in a lifetime historical process, very similar to the systemic crisis of the great depression, where the way the “political and bureaucratic processes [used to] work in a large federal nation like the United States or Canada,” mentioned by Mr. Carson, underwent paradigm shifts.

Like the railroads and the telegraph, the IOUs are in a process in which they are unable to participate in the smart grid under the IOUs Framework, which is an information and communication technologies event. Phones were disruptive technologies seen as toys by the telegraph companies and now we have iPhones. The obsolete IOUs business model of winning rate changes to regulators has already undergone the same fate.

José Antonio Vanderhorst-Silverio, PhD.
Systemic Consultant: Electricity.
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