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Whatever the customer wants. Which Is...?

But just what consumers want is a key unknown. State regulators from across the country told of varying consumer response to innovations such as smart meters. The debate, said Michigan Public Service Commissioner Greg White, is over "who wants to do their own, and who wants us to do it for them?"

With electricity bills averaging just 3-4% of disposable income, speakers said the price incentive for customers to take an active role in managing their power use is often missing. Electricity "is boring," said Crane.

Or as Wyoming Consumer Advocate Bryce Freeman put it, all the new gadgets and apps are great, but, "Do customers really want their iPhones to talk to their toasters?"

A parallel concern is cost. Theodore Carver, Chairman, President and CEO of Edison International, said in southern California, wealthy residents can afford to buy solar panels, leaving those less well off with higher rates to cover the company's fixed distribution costs. Other utility executives echoed that worry.

Show me the money
Speakers said state and federal energy regulators need to create conditions that will allow innovation to flourish and let markets create transformation in the most cost-effective way, not try to pick technology winners and losers.

Regulators warn that's easier said than done – Daniel Yergin of IHS CERA said the energy industry is a "very long-term business" forced to make 40-year investments when no one can see more than a few years into the future. Regulators across the country vary widely in what they consider legitimate costs for non-traditional spending like efficiency.

Ralph Izzo, Chairman, President and CEO of PSEG, said he'd rather invest in building insulation and efficiency for long-term savings, but New Jersey regulators don't allow the company to make a return on that. So instead, he will decide in the next few weeks whether to invest more than $1 billion in a new natural gas-fired generator.

Thomas Farrell, the Chairman, President and CEO of Dominion, said he foresees having to invest as much as $10 billion in the next few years in Virginia alone, just to meet new demand and environmental regulations. "Where is the money coming from to pay for all these new ideas?" he asked.

 

 

 

 

 

AOL Energy provides access to news, analysis, thought leadership and discussions about the top stories in the electricity sector today. Participants in AOL Energy stay ahead of breaking news, participate in high-profile events and enjoy access to the central hub of the industry community as it transforms in response to fast-moving changes in energy politics and regulation, deals with financial challenges and leads technological advances.

 

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