(November 2009)Regulators are in the unenviable position of determining an allowance for ROE that’s fair to consumers and investors in a volatile economy. The cases that stand out this year...
CEO Roundtable: Debating The Boucher Bill
Utilities consider imposing a retail surcharge to fund clean-tech R&D.
me start with the specific and then go to the general. I also serve on the EEI executive committee and was part of the group that unanimously endorsed the Boucher bill. Going to the more general, I think the Boucher bill is necessary only because we have a situation right now which is sub-optimal. By that I mean I’m a greater believer in markets providing accurate price signals so the private sector conducts commercial development in response to those market signals. I think it’s more the role of consortia and governments to provide support for basic research. But when we’re talking about enhancing the commercial viability of products and services, whether that’s energy efficiency, renewables or CCS, which is the target of the Boucher bill, the reason we need surcharges and the reason we are stepping in is because government has failed to regulate carbon in a way that sends an accurate price signal through the electric price. If we had that, I think you would see the private sector push on the necessary research agenda, from the GEs to the First Solars and the Sun Powers and the Siemens, and everybody in between. So what we need is an accurate price signal to unleash the creativity of the marketplace.
Catell: I have a slightly different perspective from my colleagues. Certainly there’s no question there’s a need for government intervention in funding some basic R&D. And I congratulate Congressman Boucher and EEI and EPRI for coming up with this surcharge idea. But this is focused on commercialization of one specific activity. We would certainly support a broader concept. I understand the difficulty if you don’t have something that’s focused. But in the Northeast, where Ralph and I come from, our customers already are paying some of the highest costs for electricity. We have an RPS, and our customers are paying tens of millions of dollars to fund R&D, so this would be an added cost on the customer. If our customers are going to be paying more, I think it would be appropriate that the focus of this R&D activity be somewhat broader than just the carbon sequestration effort.
Fortnightly: Would expanding the Boucher bill reduce its chances for viability from a political perspective?
Morris: That really is an interesting question. If you broadened it there’s no question that it would touch more congressmen. I could see the solar band of the country going to their congressmen and saying, ‘Hey this is another really good idea.’ Surely the wind players and the New Englanders who get a great deal of their energy from gas might think that’s a great idea as well. I appreciate that you’d pick up some votes, but at the same time you’d struggle with some votes [from legislators] who’d say, ‘Here we go again, here’s a classic energy Christmas tree with 10,000 ornaments on it.’
When we do that, as we do far too frequently, the tree topples over and nothing gets done. I will tell you Congressman Boucher is laser focused on getting it