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MODERN MYTHS

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Title: MODERN MYTHS


1
MODERN MYTHS
  • National Summit on
  • Energy, Environment and Transportation
  • New York City - May 16, 2002
  • Richard Sedano

2
Introduction
  • National Council on Competition and the
    Electric Industry
  • formed by government officials in 1994 to assist
    policymakers with the challenges posed by the
    dramatic changes brought about by the
    reexamination of the traditional franchise
    electric system. www.ncouncil.org
  • Regulatory Assistance Project
  • RAP is a non-profit organization, formed in 1992,
    that provides workshops and education assistance
    to state government officials on electric utility
    regulation. RAP is funded by the Energy
    Foundation and the US DOE.

3
CLASSIC MYTHS
  • Stories to explain the world around us
  • Indicate a world bigger than ourselves
  • Highlights best and worst of human traits
  • Some are based on truth though many are
    embellished, and some are way off the mark (it
    does matter who writes the History books)

4
POPULAR MYTHS
  • Everyone is a bit above average
  • Climate change can be solved with markets

5
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6
MODERN MYTHS
  • The Star Wars Saga
  • Turbines and Wires

7
The Nation Needs More Transmission Lines
  • This is probably true, but...
  • Congestion can also be addressed by
  • siting generation efficiency proximate to load
  • pricing and regulation
  • Many suggestions for transmission could be better
    satisfied by non-transmission projects

8
DSM can replace transmission
  • Efficiency can play a greater role in the
    universe
  • Delaying need for large capital projects is good
  • Lead time, improved planning helps DSM
  • Need different relationship among allies in
    planning and resource procurement

9
Efficiency UnderutilizedAttributes Unappreciated
  • Estimates Half of normal electric usage growth
    can be avoided by energy efficiency
  • In Vermont, with 2-3 of annual utility revenues
    directed to energy efficiency, 3-4 times more
    could be spent cost-effectively
  • Environment and System qualities often ignored in
    cost-effectiveness tests

10
Efficiency Creates Better Options
  • By delaying the need for grid investments,
    several good things happen which lower risk
  • smaller long term commitments
  • more planning time to see and react to need
  • allows for more community buy in to investment
  • allows for new technology to present improved
    solutions

11
Commitment to Planning Essential
  • Sustained commitment to efficiency needed to
    create a step change in results
  • Longer horizon for short term planning for
    cumulative effects of efficiency
  • Planning provides information to direct
    efficiency dollars to the most valuable places --
    regulatory policy must support targeting
    efficiency dollars

12
Demand Side Resources Are Afterthoughts
  • Planning - Theory
  • problems identified -- what is solution worth?
  • all resources cost evaluated to determine need
  • Planning - Practice
  • DSM, when considered, comes in after full
    planning exercise.

13
Retail competition means planning not useful
  • Not true
  • As long as energy policy is affected with the
    public interest, planning will be valuable
  • Markets must work in concert with public policy
    goals - planning must guide markets

14
Cooperative Commitment to Efficiency
  • To be effective as possible, efficiency must be
    seen as a social good by the whole industry load
    serving entities, discos, transcos, RTOs/ISOs,
    regulators, legislators
  • Customers should see a united front supporting
    energy efficiency
  • extending from customer service to codes and
    standards

15
DSM can be rolled out and the completed
  • As long as there are
  • low income consumers
  • new technology
  • new construction...
  • ...There will be a role for energy efficiency

16
Codes and StandardsAllies to Regulated DSM
  • Recognize achievements in technology
  • Phase out inferior designs
  • Relieve pressure from regulators and DSM programs

17
You cant build Transmission
  • Actually, most transmission line proposals are
    built after a reasonable permit process
  • Some cases do go badly
  • Process should screen out poorly conceived
    projects
  • process problems, especially among states and
    federal land managers can cause avoidable delays

18
Distributed Generation compatible with grid
  • Some customers can meet their own needs
  • Utilities can benefit from community-scale
    generation
  • Power can flow two ways
  • Issues can be addressed
  • interconnection
  • operating rules
  • regulation

19
Distributed Generation is answer to power supply
  • Central station generation and power lines
    connecting them will be important for a long time
  • Still, DG is an increasingly important answer,
    with potential to grow a lot
  • Challenges await in coming up with new ways to
    operate the grid

20
If we do need generation, it will be Natural
Gas-fired
  • While Natural Gas growth will probably be fast
  • Coal grows too with increased utilization and new
    projects

21
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22
Energy growth is not needed for economic growth
  • This was revealed years ago by crisis-driven
    energy efficiency, and is maintained by
    technology- and policy-driven energy efficiency

23
Legislators cant handle complex energy issues
  • Yes they can
  • But politics do often intrude
  • And issues can be complex
  • Opportunities for dialogue
  • Clear priorities are key

24
Price Spikes are inevitable outcomes of markets
  • Market prices do vary, sometimes significantly.
  • Price spikes of the sort seen in some energy
    markets come from market failures
  • inadequate market power balance on customer side
  • insufficient incentives among market players to
    include safety valve on inventory

25
Internal Combustion Engine is Forever
  • Technology will develop
  • Policy can hinder or help technology progress
  • How will we help it?

26
Resources
  • http//www.naruc.org/committees/ere/resources.shtm
    l
  • http//www.raponline.org
  • http//www.starwars.com
  • Look for Efficient Reliability Dimensions of
    Reliability
  • Look for Profits and Progress through
    Distributed Resources
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