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January 2014 EnergyBiz interview when asked if he were starting over in the power industry …
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January 2014 EnergyBiz interview when asked if he were starting over in the power industry … “I would put solar on rooftops. I would want the ability to deploy new technologies that lead to productivity gains in the use of electricity in homes and businesses. I would go after the monopoly that I see weakened over the last 25 years. My goal would be to take customers away from utilities as fast as I could, because I think they’re vulnerable. Regulations will not be changed fast enough… The business model will not be changed fast enough.” Jim Rogers, former CEO Duke Energy
This is a significant threat to the future of North Carolina
What is wrong… • Antiquated regulatory scheme. • State sanctioned monopoly built around a market model that no longer exist. • System prohibits or resist new technologies and business models. • No free market efficiency or innovation
Antiquated regulatory scheme. • NCUC is seriously under resourced and overburdened with a regulatory system that is antiquated, passive, and overly broad • No free market focus or adaptive methodology for new technologies or business models. • No proactive regulatory component
State sanctioned monopoly built around a market model that is no long viable. • 75 year old model based on ever expanding energy demand and 1930 technology. • Regulatory scheme that does not rapidly adapt for new technology or business models. • Incorporates all the inefficiencies of monopoly markets and resist innovation. • Regulatory scheme that does not address the security of electricity and the vulnerability to modern threats.
Prohibits or resist new technologies and new business models. • Private construction of generation. (2nd Cycle cost for ground mounted fixed tilt solar after 5 years…. 66 cents per watt) • Distributed generation vs mega generation construction. • Inclusion of decommissioning cost and fuel residue. • Inclusion of line loss or smart grid evolution
SOLAR Capital cost per watt (Ground mount, fixed tilt) $1.85 No Fuel Minor maintenance cost, No fuel residue cost Minor decommissioning cos CONVENTIONAL Capital cost per watt (gas, coal, nuke) $1.23 - $1.46 Not including: • fuel cost • maintenance cost, • fuel residue disposal cost • Decommissioning cost
No free market efficiency or innovation • Wasteful - No competitive efficiency • Rewards stagnation, not innovation • No comparative analysis of alternatives • Regulatory inertia • Institutionalized corporate mindset • No forward thinking strategy • Strong resistance to new players or technology
What is needed…. • Stop the posturing and make our energy market a priority. • NCUC resources and revision including alternative and comparative analysis mission. • Utility separation into generation, transmission and distribution. • Delineation that utility regulatory authority ends at the meter. Free market on private side. • Strategy for introducing free market competition and efficiency into model. • Regulatory mandate of distributed generation
Adapt to market changes or embrace the economic sideline • Encourage new technologies • Encourage new business models • Encourage free market efficiency & innovation • Stop passive regulatory system- be proactive.
Keep your eye on the ball. Companies have 49 other States they can go to and most are not regulated.