Utilities' greatest threat
By: SGN Staff
By Jesse Berst
Writing at CleanEnergy.org, Charlie Coggeshall has penned an explanation of the paradigm shift that is heading our way. He reviews some of the disruptive challenges and correctly cites as the greatest threat new trends that reduce load.
But Charlie only gets it half right. Some trends not only reduce demand, they also increase utility costs. Rooftop solar is often a case in point. The utility bears the extra expense of installing and maintaining a connection that results in selling less electricity to that customer.
Spend more to make less. That's the greatest threat to utilities.
The article also illustrates how thoughtful, well-meaning people may put themselves in opposition to utilities. For instance, Coggeshall argues against the notion that net metering is unfair cross-subsidization. He agrees that the costs of supporting net metering customers is born by the rest of the customer base. But he argues that those other customers receive benefits that outweigh the cost of the subsidy.
Although I don't agree with all of the author's conclusions, I do agree with his exhortations that the best response to these disruptive challenges "is to embrace it, rather than fight it."
In short, I think it will pay you to skim this article as a reminder of the threats headed your way and a warning about the attitude some thought leaders may adopt. I believe it is essential for utilities everywhere to get ahead of this conversation -- to proactively offer a fair interpretation and the facts to back it up. (As EEI has been trying to do on behalf of the industry.) If you wait until the problem is upon you, you may face a "hardening of the attitudes" that will make it hard for you to change minds.
Jesse Berst is the founder and Chief Analyst of SGN and Chairman of the Smart Cities Council, an industry coalition.