Electric Utility Transmission Ratemaking: Fill & Download for Free

It is only unreliable in some places. Where I live, it is the same old usual impact from storms. My brother just bought a generator in a city which used to have excellent service, but its utility is run by criminals who are on the verge of being sent to prison for a very long time. I wish he had told me. For the same amount of money he could have bought a Tesla Powerwall, which would have had a much longer service life in the future he, and everyone else in the world are about to embark on. I haven’t argued with him about this yet.But standby batteries are likely to become property which the local utility will pay you to own. Maybe not enough to justify the entire cost, but certainly enough to defray the cost and provide you with 100% reliable power service.58% of solar panels built worldwide were sold to developing nations in 2018. You can see why batteries might be more valuable than generators in places which don’t have a mature electricity market yet. In the U.S. we have a mix of increased reliability due to improving technology, and reduced reliability due to utilities which are attempting to manipulate public perception in order to increase revenue. States which rely on performance contracting have few of these problems, but it’s not a simple conversation. You have to have a few people who actually understand utility ratemaking in order to improve it, and one political party in this country is opposed to understanding utility ratemaking. Maybe that’s why it is reputedly getting worse.Depending on where you live, there may be local factors. California (a very long way from Ohio where my brother and I live) has attempted to blame the utilities for climate-change induced wildfires, while at the same time short-changing the utilities for power line maintenance. You can’t have it both ways, and while I deeply and seriously respect California’s long history of pioneering and advancements on many fronts, their handling of the current situation with wildfires is not an area that I see being handled well.You either pay the utility explicitly on the basis of how few problems they have with their transmission and distribution, or you get crap like this. One from column A, or one from column B. No multiple choice answers. No free lunch.Everyone wants good utility regulation, but almost everyone wants someone else to make it happen. Tough luck, kids. Performance based contracting comes in many shapes and sizes. It can be simpler or more complex. No form of utility regulation is immune to corrupt or stupid regulation. Lawmakers who think the public isn’t paying attention start to think they can create a direct pipeline between the utility bill and their campaign accounts. That’s when you get natural gas pipeline leaks that take months to put out, and entire towns wiped out by a fire that started when a plant grows tall enough to touch a power line.

I would have expected a better answer, but here you go:Economically, the best strategy by far, with very little chance of shifting in our lifetimes, is efficiency, wind and solar. These mostly related to electricity, but cheaper electricity makes it cheaper to eliminate petroleum and non-electric natural gas than to go on using them.In the last five years all three resources have dropped below 2 cents per KWh in a lot of places, and below 5 cents a KWh, which is the average price of fossil and nuclear power, just about everywhere.Nuclear power is economically dead. The only new nuclear plant under construction in the U.S. is pushing fast past $28 billion for two 1100 MW units. It will take about 5,000 to 6,000 MW’s of wind and solar to produce as much power, but it will cost about one tenth of the price to build that much wind and solar.Biomass cannot be expanded without raising the global price of food intolerably. The U.S. Ethanol standard, which increased ethanol and biodiesel production to about 10% of U.S. gasoline, tripled the world price of grain (yes, the U.S. is that important to world grain production).No other renewables are available to expand very much. Some can be expanded some. But none can be expanded for as little money as wind and solar, and efficiency is able to cut the total amount of electricity we need in ten or twenty years by almost a third, if we get serious about making it happen.Efficiency is easy to promote. All we need to do is give the utilities five to ten percent of the money they save with the programs they implement, on top of the program costs. The details are complicated, but no more complicated than any other ratemaking proceeding.Wind and solar are on the verge of promoting themselves. The solar and wind revolution is about to become known as the solution to poverty in rural America, and of course it is the same sort of opportunity for the rest of the world.Energy storage is less important than many people think, but we do need some - about 20% of total electric supply. I’m pretty sure wind and solar are so cheap today that we will use renewable electricity to hydrolize water, and use the hydrogen to run existing natural gas plants and existing natural gas storage facilities to provide the majority of our storage. I think batteries will continue to increase service, but they are unlikely to provide the final answer to storage. I don’t really care about whether one or the other technology or both or six other possible contenders win out. The point that matters is that wind and solar are so cheap that we can afford whatever we need, by the time we have enough renewable electricity to store some of it.The thing to watch is who gets smart first. States and nations which develop cheap renewables will have an economic edge over those which delay. And they are unlikely to lose it once they get it.States and nations which delay are likely to wind up buying cheaper renewable power from the states and nations which lead the way. Whether this means a massive increase in transmission or just a lot of new turbines and panels remains to be seen.Google cheap wind and solar contracts. The cheapest I’ve seen are approaching 1.5 cents per KWh, but the national average cost of coal, natural gas and nuclear power is around 5.5 cents per KWh. There are a few plants which are cheaper, but by the time we finish building all the wind and solar to replace the more expensive plants, the cost of wind and solar will be even cheaper than it is today.I don’t try to predict the future. I make observations about current trends. We need about 180% of current electricity to provide all possible replacement for all fossil fuels, and a few percent of that may be pretty hard to do. We won’t know until we get there. The sooner we get there the better off everyone will be, including those grumpy old fossilheads and the nuclear energy engineers who can’t understand why people would rather pay seven cents per KWH than 20 cents per KWh.