The nuclear subsidy bill, HB 6, is now law. There is no sign of Chinese banks taking over our electric grid. I guess we’re all safe for the time being.
I’m sure you all wake up in the morning excited about the opportunities to save energy. Well, at least one legislator, Rep. Dick Stein (R-37, Norwalk), appears to think that the next steps in the energy evolution should be in the control of utilities, much of it paid for by ratepayers. This could be a good thing or a bad thing. The devil is always in the details.
Ohio deregulated electricity back in 1998 and in 2009 competition actually started to work. Generation rates will go down on average statewide by $0.002 per kilowatt hour next year. The market works much better for big customers, but many customers can save some money on electric bills by shopping or joining a government aggregation.
Part of the rules of deregulation is that utilities can’t subsidize competitive services with ratepayer money that comes from the regulated side of the business. This is intended to level the playing field between marketers and the utility subsidiaries they compete with. Utilities are also not allowed to provide services ‘behind the meter’, i.e., in your house or business. An example would be energy manager software, or controlling appliances so you run the dishwasher late at night when power is cheap.
The new bill would essentially eliminate corporate separation requirements. It would let the regulated utilities get back into the generation business and require ratepayers to pay for the plants. It would also allow utilities to sell behind-the-meter products and services. The cost would be paid for, at least in part, by the ratepayers, especially the smaller customers. Oh, and the bill also commits customers to pay for economic development projects and line extensions for businesses, something gas utilities can already do.
Parts of this could be good, and parts could be bad. Traditionally, if ratepayers pay for something and the utilities make money on it – the classic example is fees cable companies pay to run wires on utility poles – that money is returned to ratepayers. This bill could create a situation where customers don’t get full credit for revenues utilities take in on something customers have paid for.
On the other hand, like it or not, climate change is real. Our clients will be the first ones affected; just look at Puerto Rico. Allowing utilities, with all the financial resources they can bring to bear, to take more control over the provision of energy services could be the best way to reduce carbon emissions cost-effectively by targeting investment in energy efficiency, demand response, and building large-scale solar, which is pretty much the cheapest power available.
We are told that a substitute bill will be introduced in early January. Stay tuned. Your utility may one day be in control of your thermostat and appliances. Or maybe not.