The Dirty Side of Deregulated Energy

I've written about deregulated energy markets in a previous post.  While every deregulated state is not the same in how they run their energy programs, most often clean energy development needlessly suffers when clean energy tariffs are integrated with generation fees.

Distribution is not the same as generation--this matters to clean energy

To drill into this a little bit, we pay separate charges on our bills based on our consumption for generated energy and for the distribution of that energy to our location (there is also a flat metering charge).  Taxes and green energy tariffs are assessed on top of these fees based on the amount of energy consumed.  In a deregulated market, consumers have a choice of purchasing the generation portion of their bill from companies other than their local utility.  The local utility provides the distribution services (power line maintenance, service for power outages, billing, etc) regardless of where the power is purchased from.  This is good for consumers in that they can get the best price for their electricity and even get added value from companies like Power2Switch.

When clean energy tariffs originally went into effect, legislators associated them to generation which was logical since the clean energy fund was intended to mitigate environmental issues with coal, oil, gas, and nuclear generation plants.  As a consumer used more electricity, they would pay more into the fund to encourage better energy (seems fair to me).  Clean energy funds came about in the context of Renewable Portfolio Standards (RPS) which are self-imposed mandates requiring clean energy to make up a portion of total electrical generation.  With an RPS and clean energy fund, the idea is that more local clean energy systems would pop up to meet the RPS over time.

The sun is setting unnecessarily on some clean energy incentives

The wrinkle in this good plan is that with deregulated electricity, consumers pay money to companies outside of the original clean energy tariff structure for their generation so these tariffs don't get collected.  The consequence is that the funds for local solar and wind projects dry up as is happening in Illinois right now.  The easy fix is to shift the clean energy tariffs to the distribution portion of the electricity bill since that money is paid to utilities within the RPS umbrella.  Rate payers don't pay anymore on their bills than they originally would have and local clean energy gets the boost it was intended to get.

Legislation, like making sausage, is typically an ugly process.  This is a unique example of a simple fix that will have significant positive benefits for us all.  I encourage my fellow Illini to support the bill to fix the Illinois RPS.

Changing Times

Renewable Energy World had an article this morning that caught my attention.  The gist was that we have all the proof we need of man made global climate change and all technical tools we need to fix it.  Implementing these fixes won't reduce our standard of living; to the contrary, our collective way of life would be better in a clean energy economy.  For a number of reasons, however, solar hasn't gained the traction that it needs to be a robust industry and we are far from gaining the critical mass necessary for clean energy to dominate the total energy landscape.

Why?  I think the following reasons are part of the total answer:

• Fear of change in the popular mind
• Corrupt politicians on the take from lobbists
• Procrastination
• Nefariousness cabal of fossil fuel executives working for their own benefit to the detriment of society
• Ignorance of the complete cost-benefit profile of clean energy vs traditional energy
• Lack of inspirational leadership to point us down the right path
• Catch-22--we don't know how it will work because no one has implemented it and I want to wait for proof

We're at a societal crossroads now.  Economic issues are forcing our hand even before environmental ones have.  Either way, moving to clean energy is the right path as generation costs from dirty sources continue to swing widely and increment upwards.  Brace yourself for a rocky ride and don't fight the trends.  Flexibility is the key but so is recognizing that today's world will look vastly different than tomorrow's.

---

Come gather 'round people
Wherever you roam
And admit that the waters
Around you have grown
And accept it that soon
You'll be drenched to the bone
If your time to youIs worth savin'
Then you better start swimmin'
Or you'll sink like a stone
For the times they are a-changin'.

Come writers and critics
Who prophesize with your pen
And keep your eyes wide
The chance won't come again
And don't speak too soon
For the wheel's still in spin
And there's no tellin' who
That it's namin'
For the loser now
Will be later to win
For the times they are a-changin'.

Come senators, congressmen
Please heed the call
Don't stand in the doorway
Don't block up the hall
For he that gets hurt
Will be he who has stalled
There's a battle outside
And it is ragin'
It'll soon shake your windows
And rattle your walls
For the times they are a-changin'.

Come mothers and fathers
Throughout the land
And don't criticize
What you can't understand
Your sons and your daughters
Are beyond your command
Your old road is
Rapidly agin'
Please get out of the new one
If you can't lend your hand
For the times they are a-changin'.

The line it is drawn
The curse it is cast
The slow one now
Will later be fast
As the present now
Will later be past
The order is
Rapidly fadin'
And the first one now
Will later be last
For the times they are a-changin'.

- Bob Dylan The Times They Are A-Changin'

Renewables face stiff competition in the energy PR war

Companies selling legacy energy products (oil, natgas, coal) are winning the public relations war over climate change.  This makes sense in a way since they have a lot more to lose than the clean energy companies have to gain.  Fossil fuel centered companies have an elaborate (and expensive) strategy to undercut the value proposition that solar & wind companies have been trying to make in the court of public opinion.  Front and center in this fight is to deny that humans have any impact on the climate and that any changes that might be occurring have nothing to do with burning carbon based fuels.

As you'll see in the chart produced by Riley Dunlap and Aaron McCright, two university sociologists, climate change denial is a well-organized, comprehensive affair.  Regardless of how you feel about this issue, I find it very interesting that so much money, human energy, and legislative time is being committed to refuting something that has an objective answer.  This tells me that the parties in the matrix below are more savvy to the fact that how we feel about an issue matters more in spurring action than whether the something is true or not. Deceptive messengers typically jaundice common sense people to the message however, and truth has a tendency of coming out in the end regardless of obfuscation efforts.