Competition in the electric utility industry came after a nationwide flood of nuclear power cost over-runs. History is now repeating in Georgia and Florida, where popular reaction against uneconomic nuclear power is in bright contrast with support for solar energy. I wrote last week that the utilities resistance to solar makes sense only to the incumbent utility with an old business model.
The costs of nuclear plants planned and under construction in Southeast states have been shielded from economic reality by a variety of state regulatory decisions. In Florida, the collection of funds for the proposed Levy nuclear plant in advance of construction, and years before any benefits, drew new legislation.
Now, in Georgia, where the Vogtle plant expansion was too expensive at $14 billion and costs have been marching higher, the Atlanta Tea Party is calling for reforms and fair access to solar energy.
The two traditional reasons for a monopoly in electric service NO LONGER make sense:
- A single set of wires run through the streets is not the only way to deliver energy, and
- Power plants are no longer cheaper with ever-larger size.
With the sun shining on all customers, the utility company has competition without a second set of wires. Solar energy competes for revenues with the utility model, as does energy efficiency, and reforms are needed to make sense of this new reality. As for the economies of scale in the building of generating plants, that fell apart with the wholesale competition between natural gas-powered plants and nuclear plants over 20 years ago.
The Federal Energy Regulatory Commission is taking comments today on streamlining the process for solar interconnections. UCS has submitted comments describing utilities’ reluctance to use the data available to accommodate more solar rooftops. But the bigger challenge to the old ways of thinking about customers access to competing energy choices requires a state-by-state process. When the push to open competition created reforms in some states during the 1990s, rooftop solar wasn’t as cheap as it is now.
This is going to get interesting. You can get a front row seat at your state public utility commission’s next meeting.
Michael Jacobs is a senior energy analyst with expertise in electricity markets, transmission and renewables integration work
This article was originally published on the Union of Concerned Scientists’ Equation blog. Reproduced with permission