How Do We Transition To A New Energy Paradigm?

Competition can transform electric service in America, just as it set the stage for revolutionary changes in the telecommunications industry. That was the message from a panel of experts at an Capitol Hill forum this week on the future of electricity. The NDN-sponsored event featured members of Congress, government officials and leaders from industry and the NGO community discussing NDN’s Electricity 2.0 report, which identified competition in electricity markets as a launching pad for technological innovations and renewable energy.

“How do you take the model of telecommunications revolution and model it into the energy sector?” Congressman Ed Markey (D.-MA) asked, citing his involvement in a series of legislative efforts that unleashed competition and innovation in communications technology. Challenges to monopoly control in the cell phone, cable television and internet industries created investments in new technologies, drove prices down, and put broadband access into homes across the country, said Markey.

The Electricity 1.0 era, beginning with Edison’s invention of the carbon filament light bulb, occurred when “competition was widespread and the field was open,” said Michael Moynihan, Green Project Director at NDN. This period resulted in the largest and most robust electricity system on earth, Moynihan noted, but has largely ground to a halt because of cost-based monopoly protections. “The changes that took place in telecom…have simply not been replicated in the electricity sector.”

Competitive markets encourage the innovative solutions required to meet America’s electricity needs and environmental objectives. “Given a level playing field, competition and choice, you see more and more of green (energy),” said Clem Palevich, former president and CEO of Constellation NewEnergy. “The folks in the renewable energy business will tell you they’re much more successful in competitive markets than in the regulated markets.”

But “innovation requires access. Right now in our monopolistic structures, we don’t have access,” Palevich observed. “Once you provide access to customers, pretty soon you’ve got innovation.”

Dynamic energy pricing, a hallmark of competitive markets, drives innovation and consumer action. “The impetus to change is knowing you have an option to change – knowing you can do it yourself,” said Jigar Shah, CEO of the Carbon War Room.

“Make data available to consumers and their authorized third-parties,” said Nick Sinai of the Federal Communications Commission, which recently included energy and smart grid recommendations in its National Broadband Plan. “Innovation is possible if you have that connectivity.”

Companies with the best rates, technologies, and services thrive in a competitive market, Markey said. “It has to be Darwinian, it should just be whoever is the smartest, but you have to open it up….Once you do that, then you’re in business.”

Joel Malina | May 13, 2010