Comments under Utilities: Your monopoly days are numbered. (Yes, we've heard this before, but this time...)

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The last mile 

What Mr. Munson doesn't seem to see is that the last mile is still the sticking point. If he (or anyone) can find a way to magically multiply the the copper lines in every suburban neighborhood across the country and make them available to competitors (and this is true for communities worldwide), then we can argue about the necessity of publicly regulated power delivery companies. Public utility monopolies exist not so much because they are forced on us by control hungry corporate meanies, but by the simple realities of economies of scale. The reason there are not two, or three, or more sets of power lines running down every suburban street, or even through every industrial park, is because the cost to lay and maintain them is only practical if there are a critical mass of users. With the exception of some highly populated urban areas, having two companies laying and maintaining infrastructure will require both to have higher rates per user to offset their duplicative infrastructures. When Mr. Munson finds a magic bullet to slay that beast, he can argue for multiple last mile suppliers.

Tom Campbell - 05/07/2014 - 07:39

New Players in the Electricity Market 

The “last mile” and “stick-with-the-status-quo” arguments didn’t sway cell phone providers, nor are they stopping distributed generators and microgrid developers. The arrival of new players into the electricity market, to put it simply, is shaking up assumptions monopolies used to hold sacred.

Dick Munson - 05/07/2014 - 12:14

Where's the competition? 

Well said Mr. Campbell. Aside from comfort services, I see nothing in this article that suggests that anyone is competing to provide electricity to the home for 8760 hours per year. The closest thing to this would be solar or fuel cell companies but typically any power source that can be built for distributed generation has been produced more economically at a utility scale. I get energy from the grid and it cost me no money down, free maintenance, 99.9999% reliability and my monthly payment is cheaper than solar or fuel cell options. It cost less than my cell phone and internet bills too. Here in Iowa only about 45% of the electricity I use comes from coal and that number is going down every year.

Russ Steven - 05/07/2014 - 12:24

The creative destruction of the end to end Smart Grid 

Mr. Berst, this is an excellent introduction of the emerging electricity-services market. It doesn't matter whether or not Mr. Campbell is right in that public utility monopolies may partially remain because transmission and distribution are natural monopolies. What matters is that this is the time to correct the architecting flaws of the 1992 U.S. Energy Policy Act that remained after “The Integrated Energy and Communication Systems Architecture (IECSA)” in 2003. It’s interesting to note that while IECSA useful life was set for 5 to 10 years the end-to-end Smart Grid was introduced to support investments well beyond that useful life. For more detail, please look at the 2010 EWPC blog post “"Should the Smart Grid be a Technological Project to Address a Challenge Faced by Utility Executives?” I say it doesn’t matter because of the great progress done since then as can be seen, for example, in the EWPC blog post “A complete and fully functional electricity restructuring proposal.” Both blog post can be found by a Google search.

José Antonio Vanderhorst-Silverio, Ph.D. - 05/07/2014 - 12:48

New players in the electricity market are insufficient 

Mr. Munson posted while I was writing my comment in response to Mr. Campbell. New players in the electricity market are necessary, but totally insufficient. In addition to new players, a nimble internet architecture that replaced OSI is essential, as can be seen in IEEE Spectrum article "OSI: The Internet That Wasn’t: How TCP/IP eclipsed the Open Systems Interconnection standards to become the global protocol for computer networking," by Andrew L. Russell. That is an update to my comment under Russell’s article, with the reinforcement from the most recent EWPC blog posts in response to timely articles posted by Mr. Berst. For example, in the EWPC blog post “Utilities need to move from lobbying against the transformation to leading it.” – Ernst & Young," you can see: “And no, we don't know where it will lead. We just know there's something much bigger than any of us here.” -- Steve Jobs. That's exactly the argument used in the EWPC blog post Is the State of New York Public Service Commission Electric Utility Vision Bankrupt? to say that vision is emergent.” Please Google those blog posts if interested in the details.

José Antonio Vanderhorst-Silverio, Ph.D. - 05/08/2014 - 06:10

Distributed Generation 

The discussion of solar replacing grid power is not valid without cost-effective batteries that don''t need replaced every 4 years. Some homeowners may want to deal with these headaches and get poer 95% of the time but there will always be a demand for some form of reliable grid power. Solar energy will displace some utility energy revenues but those customers will begin to pay higher grid access charges and less per kwh. This in turn will diminish incentive for customers to save energy. It will also discourage further solar development as the benefits of energy savings go down. This will take years to play out so no the end is not near. Once cost-effective reliable and hopefully environmentally friendly (doubtful) batteries are in place, utilities will become players.

Russ Steven - 05/08/2014 - 10:33

“And no, we don't know where it will lead... 

Mr. Steven: you seem to be expecting that the future is a continuation of the past, instead of quite different from it. Do you disagree with Steve Jobs quote “And no, we don't know where it will lead. We just know there's something much bigger than any of us here.” By eliminating all unnecessary restrictions to competition, Should we expect or not innovators, that are able to learn from the emergent future, like Steve Jobs, that will make proposals customers are not expecting but will love. For more details, please Google the EWPC blog post "Why the Current Smart Grid Process Doesn’t Let the New Steve Job Connect the Dots."

José Antonio Vanderhorst-Silverio, Ph.D. - 05/08/2014 - 12:24