An interesting development in the climate change debate occurred this summer in the U.S. Congress. It wasn’t the Senate’s work on the Lieberman-Warner Climate Security Act; that was a...
Co. Policy and Planning Director Bruce Edelston emphasizes the notion that private investors should fund all grid expansion aimed at bringing product to customers:
"If Southern Company needs to make a transmission investment to provide service or designate a new network resource for our native load, we should be required to participant-fund those investments just as anybody else.
"We cannot optimally plan the transmission system any longer, and we should not try and pretend that we can."
SO IT TURNS OUT THAT WHILE YOU CAN'T IGNORE THE LAWS OF PHYSICS, YOU'VE GOT TO CHOOSE BETWEEN NEWTON AND EINSTEIN. Traditional regulation, as with the physics of Newton, can flourish as long as markets trade at low velocities. You can regulate generation and transmission, holding each to an artificially planned benchmark. We've done it before. The system will function. But you will never know the true price of energy.
By contrast, think of the SMD as the physics of Einstein. It won't tell you how many plants to build. It won't tell you if and when to build more transmission. Indeed, the vary fabric of generation and transmission may become skewed or distorted.
But you will discover the price of energy.And it is price discovery, and that alone-certainly not some vague notion of grid "independence"-that offers the only worthy justification for the SMD.
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