Department of Energy

The federal government has the capability to transform America’s energy system within two decades through policies that stimulate energy technology innovation, according to a recent report by the President’s Council of Advisors on Science and Technology (PCAST).
 

Consumers need access to new, transformative technologies to manage their energy use, and monopoly barriers don’t make that easy, Reid Detchon, executive director of the Energy Future Coalition lamented at a Brookings Institution forum last week on climate change and the smart grid.

“Where does competition occur?” Detchon asked, citing the “structural impediments” for monopoly regulated utilities to promote reduced energy use by their customers.  Once the market signals are right, consumers’ energy use will be mitigated by price, Detchon said.

“We do need more competition,” said David Owens, executive vice president of business operations at the Edison Electric Institute, the trade group representing investor-owned utilities.  Pilot programs by utilities have shown that consumers respond to price signals, Owens noted.  These pilot programs showed there was a “tremendous shift” in energy use by low-income customers motivated to save on their electricity bill, he said.

A lively panel discussion dedicated to the question of whether a change in regulatory structure is needed to power a new clean energy economy helped kick off the National Electricity Forum, an annual confab co-sponsored by the U.S. Department of Energy and the National Association of Regulatory Utility Commissioners, an association representing state utility regulators. Regulators, environmentalists, policy influencers and other panelists roundly pointed to market competition as the answer.

To inspire innovation in the electricity industry and jumpstart a clean energy economy, “We need to start turning the conversation around to markets,” declared Jon Wellinghoff, chairman of the Federal Energy Regulatory Commission (FERC).