Wednesday, May 30, 2007

Lights Out...available now!

I'm happy to announce that my latest book, Lights Out: The Electricity Crisis, the Global Economy and What It Means to You is now available. While my previous two books have been geared toward a professional audience, Lights Out is written in an approachable style that will enable anyone interested in our electricity infrastructure and energy policy to grapple with even the most complicated aspects of the industry.

It has always been a mystery to me why Big Oil is constantly covered by the mainstream press while the electricity industry seems to be an ignored stepsister. Perhaps the enigmatic figures of the past, such as Edison, Tesla and Westinghouse, pale in comparison to the romance of the rough and tumble world of Texas wildcatters or Middle Eastern sheiks in billowing white robes. Whatever the reason, it seems more than shortsighted when you stop to think that the ability to ensure the uninterrupted supply of electricity at a reasonable price is absolutely essential--even more essential than oil--to economic growth and to the survival and prosperity of modern society. After all, when our electricity service is disrupted, our water, telecommunications, transportation and banking systems grind to a halt and our homes, business and, indeed, all the modern conveniences of our daily lives, shut down.

Lights Out is our attempt to level the playing field and to give electricity its due while also proposing a comprehensive road map outlining technical solutions and regulatory reforms--for both the supply and demand side--that will put us on a more rational policy path and help us avoid the serious consequences of an unhealthy electricity infrastructure. The book is divided into three parats that provide a detailed look at:

1. How today's electricity system works--from the extraction of the raw energy source to the electricity-consuming appliances in your home--and what happens as the supply lines begin stretch or break down

2. Why the strongest, most vibrant economy in the world is increasingly dependent upon a production, transmission, and distribution system that continues to be built for the LAST fifty years, not the next half century

3. What can be done to rescue us from the current path we're on--from embracing new technologies ready for deployment to reformulating business models based on common sense, not market or political ideologies.

Needless to say, I think you should buy the book. After all, I've got a kid heading off to college this fall! But, more importantly than my daughter's college finances, it is imperative that this story get told, that people start to pay attention, that industry leaders stop reading from yesterday's playbook and begin to take the bold steps needed to correct systemic problems, and that politicans and policy makers stop wrapping themselves in ideological arguments and start addressing the serious challenges facing our electricity industry.

Wednesday, May 16, 2007

Up Up and Away…An Electric Power 2007 Recap

Have you checked your electricity bill lately? Chances are your rates have gone up. From east to west, north to south, electricity rates in America are on the rise. Although no one specifically addressed rate increases, the bulk of the speakers at the recent Electric Power 2007 Conference reported on issues that directly impact the escalating costs of power generation.

So what are these issues? There are three basic factors at play here:

1. Public demand for solutions to global warming
2. Increased global demand for commodities
3. Tight labor market.

Global warming. In the past, environmental concerns have come and gone. Will this time around be different? With the prospect of global warming on the horizon, many think so. Strategists at major power companies across the country are recognizing that the public demand is real and that they must be a part of framing the solution. As Duke Energy’s CEO has stated in the past, “If you are not at the table, then you are on the menu.” Today Duke’s strategists, among others, are calling for carbon legislation at the federal level to avoid fifty states imposing their own plans.

Although many recognize that automobiles also contribute to the problem, accounting for almost 25 percent of CO2 emissions, it is pretty clear that it is easier—politically—to hold the electricity industry’s feet to the fire rather than the auto industry—and the nation’s drivers of autos. After all, as Robert Peltier, Editor in Chief of Power magazine said, “Cars vote, power plants don’t.”

So, the most likely scenario is that the big energy companies are going to continue to carry the largest regulatory and financial burden for decreasing greenhouse gasses even as the economy grows and the demand for power increases. And at every step of the way, as regulatory and financial burdens increase, they will be passed on to the ratepayer.

Commodities. Part of those burdens are reflected in the rising costs of building new plants to meet increased demand and of bringing existing plants up to original design efficiency with new technologies. From time spent in the permitting process to construction and operation, everything costs more. And with tough competition for commodities coming from rapidly-developing China—where a new power plant comes on line practically every week—we’re going to see costs escalate even more. Because China is building so many new power plants, the demand for commodities has escalated dramatically. In fact, here at home, project costs are being dramatically revised upward well before ribbons are cut and ground is even broken.

Labor. As the global economy grows, the demand for power increases and more power plants are in the planning stages around the world. The big question is who’s going to run them. The supply of qualified labor in the U.S. is shrinking as the existing talent pool ages and fewer qualified personnel move into the market. Drawing new talent into the workforce is a daunting task that requires increasing pay incentives and opportunities.

While there are other issues impacting rising rates, these three are the fundamental drivers that are reflected in higher costs to end users as well as long-term challenges to the industry at large.

All of these issues are dissected and analyzed in "Lights Out: The Electricity Crisis, The Global Economy, and What You Can Do About It," now available at www.amazon.com or your local retail bookstore.