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Pamela’s Blog:
The Energy Utility - re-imagined, re-invented


March 12, 2012

This is a blog about utilities; specifically, energy utilities.  We all experience these, the organizations of people and structures that stand behind the electricity or natural gas that arrive at the places where we live and where we work, at the server farms and cell phone towers that support our access to the internet, and the traffic lights that regulate access to intersections.  Energy utilities are a subset of a broad group of organizations or people and structure – often called infrastructure – that provide things of “use” to many of us: water, roads, railroads, sewers, and more.

The utility as we recognize it today dates back no more than 150 years or so.  Our nation required this “infrastructure” – and the organizations to build, operate and maintain it – to support its growing population and economy.  Although government provided some of the utilities directly, non-governmental organizations, some for profit and some not, emerged to take on other utilities.  Initially municipalities and later states performed or formed regulatory bodies to oversee and regulate – in other words, to govern – those utilities that were not government.  The ensuing years – and a potent stew of cultural, political, and economic paradigms combined with technological machinery – shaped our ideas of what an energy utility is, what it should do, and how it should behave.  Over a hundred years later, those ideas are woven so thoroughly into the physical structure, laws and regulations and taken so for granted in our minds that it is difficult to imagine how things fifty years from now could be much different from today.  And yet.

And yet the circumstances and conditions in which this potent stew of culture, politics, economics and technology mixes have changed and continue to change.  Will what we perceive as serving us so well, serve us well into the future?

The events and experiences of 1900 to 1950 formed many of our ideas about energy utilities.  Characterizing these years were the powerful and inter-related forces of abundant, highly usable energy, rapid population growth, urbanization, and mechanization.  Economies of scale literally fueled the energy utility infrastructure that we know today.  The next 60 years brought us slowing in population and urbanization growth, several generations of turn-over in our machinery, and intermittent but deeply concerning interruptions in the supply of abundant, highly usable energy.  It also brought the rise of globalization and the inter-connectedness of everything.  When the combination of new conditions and old ideas about energy utilities created a problem, we developed solutions, generally adding to the laws and regulations as necessary: used and useful standards, prudence reviews, least cost planning, mandatory purchases from certain independent power producers, mandatory transmission service, wholesale markets, and so forth.  Occasionally, we removed laws and regulations, the deregulation of natural gas production being a notable example.  But in most respects, the physical infrastructure of energy utilities is more complicated than ever and the laws and regulations rival the complexity of the Winchester House

Are the forces and problems of 1900 to 1950 what will challenge us today and in the future?  What will characterize 2010 to 2060?  Almost no one would offer a prediction of little to no change.  Indeed, the challenge often is simply deciding which change on which to focus.  Demographics?  Technology?

Natural resource limits? Global economics or politics?  How will we perceive these?  Will the complicated and complex structure of energy utilities accommodate more additions as we respond to the changes?  Or is it time to re-invent energy utilities?  And can that happen without recognizing the deeply held assumptions and beliefs around the physical and intangible idea of “energy utility?”

If you have found your way to this blog, you are most likely part of the community of involved stakeholders in our nation’s energy utilities.  I use the term “involved” to differentiate a subset of the full set of energy utility stakeholders, which is pretty much everyone.   Most of us, individually and in our various organizations, receive some kind of energy utility service.  Although some of us are “off the grid,” it is impossible to disconnect from the presence and consequences of the energy utilities.  But the vast numbers of energy utility stakeholders are uninvolved.  Perhaps the involved stakeholders have done too good a job over the decades in making these vital energy services “out of sight and out of mind.”  In any event, if you are reading this, energy utilities are in your sight and mind.  You are involved.

Perhaps you work for an energy utility.  Perhaps you are a commissioner or staff member of an agency that regulates the services and economics of energy utilities.  It may be that you advocate for certain customers of energy utilities, such as low-income customers or large industrial customers, or for the environment.  You might be in the academic sector, or on the governing board of one of the nation’s many publicly-owned utilities, or a government employee involved with energy matters.  Whoever you are, I invite you to participate with me in a quest.

There is a old Chinese proverb: “The fish is the last to know that it lives in water.”  To this proverb, I would add the following: “and that is why it is a really good idea that the fish get to know the bird!”  Let our quest here – the interaction of posts and responses, create the bird and, from a perspective of understanding the water, engage with the questions today poses for energy utilities.

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