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Supreme Court Rules In Favor of Energy Conservation Program (yahoo.com)
mdsolar sends news that the U.S. Supreme Court has issued a 6-2 ruling in favor of the Federal Energy Regulatory Commission's ability to create incentives for conserving energy and reducing demand on the power grid at peak times.
The demand response program pays large electricity customers like retailers, schools and office buildings to reduce energy consumption on hot summer days and other times of peak demand. The reduction in power use means electric utilities don't need to turn on backup power plants, which cost more to run and boost electricity prices. ... The rule won wide praise from environmental groups because it curbed the need for utilities to build expensive and air-polluting power plants. The demand response program saved customers in the mid-Atlantic region nearly $12 billion in 2013, according to PJM Interconnection, which manages the wholesale power supply for all or part of 13 states. ... But the rule has meant millions in lost profits for utilities. Those companies argued that the program impermissibly targets retail customers.
Ever noticed that when these companies want to protected their interests they say something along the lines of how badly it will hurt someone else:
Press: So Mr PR guy, what is your companies reaction to having this highly profitable but damaging line of business made illegal?
PR guy: Oh we are fine with losing billions in revenue, we've always known it was an unfair monopoly. What we are concerned about is that this will cause millions of cute puppies to die. We don't understand why the government is so intent on killing millions of cute puppies.
My ism, it's full of beliefs.
You do need some price regulations on basic industries. If my neighbor has trouble affording enough electricity, water and phone for basic things (necessary heating, clean water to maintain health, ability to apply for and maintain a job) then it can reduce overall economic production and, indirectly, hurt me personally. Increasing baseline well-being for the country, especially when it has relatively little cost, is absolutely good for economic growth...even when it limits utilities' profits. Sorry not sorry.
And wondered whether it is in people's interest to face electricity tariffs that may vary widely (by a factor of 10 at least, and without warning, like on a stock exchange) between the 15-min time slots in which electric power tends to be bought and sold?
Because that's what would be needed to remove one of the biggest imperfections in the electricity market: fixed consumer tariffs.
Allowing regulatory bodies to incentivise reduced consumption when generation costs go up is actually the simplest, most pragmatic way to remove some of the imperfections from the market. And it *demonstrably* results in quite substantial savings for customers.
Only ... it tends to cost power companies money, which is why they opposed this commonsense measure by legal means, and lost even when they tried to dress up their self-serving objections as "opposition to measures that interfere with the free-market".
Funny how this kind of dogwhistle tactics always brings the more dogmatic "free market" supporters out of the woodwork. Supporters who are clueless about anything to do with the issue at hand (including the market in which the issue arose), but but who are consistently full of empty slogans and over-simplistic arguments.
Because the free market does not work. You are a captive buyer of energy utilities, you have not ability to pick and choose who you buy electricity from. The utilities in turn do not charge their customers solely on the amount of electricity used or cost of infrastructure. The utilities when left to their own devices have shown that they will discourage energy conservation as it cuts into their profits.
They think the free market is a magic bullet. Any market ever has had some interference somewhere so these nutcases can always fall back and claim a true free market could still theoretically work despite all the empirical evidence against it.
The problem to some is that they only look at profits alone. The "substantial savings to customers" is not a concept they want to accept, as they think customers can reduce costs merely by buying from someone else. The government has a vested interest in reducing energy usage despite the loss in profits to some companies, but free market believers don't like externalities because it screws up their naive models. Almost everybody in America gets only one choice of electricity provider, take it or leave it, there is no free market by its very nature. And those utilities will fight viciously against anything that brings in competition (like municipal utilities).
You are a captive buyer of energy utilities, you have not ability to pick and choose who you buy electricity from.
I don't know how its in the USA, but at least in the EU there are multiple markets: the network providers, the plant running companies, and the actual vendor company you buy the energy from. And EU regulation (called REMIT if you want to look it up) requires network providers to be separate from the plant running companies, so big providers don't abuse their advanced position. As customer, you have choice from multiple energy vendors, you are not captive.
Oh bullshit. The government needs to reduce energy usage. The utilities are insistent on the idea of profits-uber-alles. All the government is doing here is encouraging customers to save power, it is no different from a private citizen trying to form a boycott. Saying that this is a "taking of value" implies that the utilities deserve these profits, which they do not. If it is a taking then even a simple advertisement campaign to discourage excessive and unnecessary power usage would be a taking.
The government is not fascist. But maybe it should be if it's the only way to smack these utilities in the face and turn them into responsible citizens. The government has a vested interest in reducing energy usage in the defense of its citizens and economy, whereas the utilities have a vested interest in increasing energy usage. This was not always true, in the past there were voluntary energy conservations programs, but over time everything has turned into a profits centric model where they felt it was better to build more and more polluting plants.
There's a concept called "decoupling" - where a utility's profit is not based on the amount of power sold, but on other factors. (Say, reliability, low cost, customer satisfaction, etc). Many utilities do this, via their local regulating body of government.
With that in place, the utility doesn't care how much (or little) power you use - at least on a profit level. If the government offers a bonus to the utility for successfully implementing "green" power or a Demand Response system, then there's a lot of incentive for the utility to make that happen.
This isn't rocket surgery. Utilities are just like any other company. So many people have already decided that utilities are evil that they can't see how a small change to the rules can be good for everyone.