Thursday, September 11, 2008

It’s time to talk electricity!

This election cycle it is critical to get the candidates talking about the future of electricity in America.

Electricity is SO fundamental to our economy and our modern way of life that most people don't even think about it. The industry has done such a good job that today we have (relatively) affordable, reliable, robust power available to homes and businesses. But, if we don't address the challenges facing the industry, the future of affordable, reliable, and robust power may not be secure. The challenges are many, the solutions complex. Climate change policy, energy independence, skyrocketing commodity costs, inadequate transmission infrastructure, incessant demands for renewable energy, and conservation all affect electricity policy, and become de facto back-door electricity policy.

The future of our economic well-being and competitiveness depends on crafting a smart electricity policy--not only reacting to our challenges with a hodgepodge mess of initiatives that are neither well thought out or feasible. So, right now, take the time to write a letter to the editor, craft an Op-Ed piece, write or call your elected representatives and make your voice heard!

Talking Points on our Electricity Future

:: Electricity is absolutely critical to our economy and to our modern lifestyles.
- We have to manage the impact of all of these environmental and economic pressures on our electricity infrastructure.
- Nothing substitutes for its convenience, cleanliness (at the point of use), and versatility.
- It supported our entire infrastructure, from server farms to water supply, and therefore is a critical part of our national security.

:: Electricity is the one energy that is Invisible—Except When It Isn’t There.

- Voters and ratepayers have to think about electricity before their lights go out or their rates skyrocket.
- Unlike gasoline, consumers don’t see the price of electricity, so they cannot respond viscerally to it. When you don’t know the cost of something, you can’t understand its value and you have little incentive to change behavior. Right now, electricity rates are escalating everywhere but most of this is to pay for the excesses and the deficiencies of past deregulatory and competition programs! Future rate shock will pale in comparison and we won’t be paying for the right things unless voters get engaged now!

:: When it comes to infrastructure, Americans suffer from the long-term consequences of short-term thinking.
- We pass short-term palliatives (ethanol, wind production tax credits for two years, etc), or legislation that spends more time in court than in practice, and we lurch from election cycle to election cycle catering to narrow special interests instead of adhering to a flexible but long-term policy or plan.

:: Transmission, although critical to every kind of electricity generation and distribution, is becoming an example of the “tragedy of the commons.”
- We are setting ourselves up for unrealistic expectations for wind because many of wind depends on more transmission
- Transmission is the smallest component of value in the production and delivery value chain but represents the greatest investment and infrastructure gap for long-term reliability, security, and price stability.
- Transmission knits our national grid together but a terrorist attack on a key interconnecting substation can black out half the country. We must protect the grid for what it is, the linchpin for survival and comfort.

:: Energy storage is essential!
- Optimizing our existing infrastructure and ensuring a viable and cost-effective pathway for large-scale renewable energy requires a new piece of the production and delivery value chain, energy storage, which requires substantial RD&D funding.

:: We need infrastructure engineering—not financial engineering!
- Our electricity infrastructure has become the victim of financial engineering. Our ability to manage assets diminishes as our infatuation with managing balance sheets grows. Financial engineers have been extracting money from the nation’s electricity infrastructure, and little of it is put back to work.

: We must begin to address global warming now! Addressing global warming can be elegantly simple.
- Use nuclear power combined with more renewable energy supported by energy storage technologies (both carbon-free sources) to move away from fossil fuels for electricity production and revamp the transportation infrastructure for electric vehicles.