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CEO Roundtable: Debating The Boucher Bill

Utilities consider imposing a retail surcharge to fund clean-tech R&D.

Fortnightly Magazine - December 2008

other things, including nitrogen, etc.

The need to expand the research is important. Even with the early start the Boucher bill allows us, the reality is the initial reductions in carbon won’t be achieved through CCS. They’ll be achieved through energy efficiency, international offsets, further deployment of wind and potentially further deployment of grid-connected solar. So that’s the way we can deliver benefits to everyone, including those jurisdictions that already are paying higher prices and don’t lend themselves to CCS. I think fairness matters. It clearly does.

 

Intellectual Capital

Fortnightly: What do you think the financial crisis means for RD&D for clean energy technology? Should we be saying, ‘We can’t afford this right now’? Or should we look at it from the opposite direction and say an investment in technology is exactly what the country needs at this point, from an economic perspective as well as environmental and national security perspective?

Izzo: I’d take more the latter view. This is a good opportunity for us to invest, to slay two dragons at once—dependence on foreign fuels and to address the long-term environmental threat, which will have economic consequences that are difficult to predict right now.

We’re all old enough to feel a little embarrassed that in 1973 we saw this, and in 1979 we saw this, and we let three decades go by. Not long ago, we were at the mercy of $170-a barrel oil, and now people are asking where’s the floor and where’s the ceiling. That kind of uncertainty tends to paralyze the capital markets.

That kind of uncertainty isn’t healthy for us, as we ponder the next investment. How do you make that decision not knowing if carbon is going to cost $5 a ton or $50 a ton, and not knowing if that regime is going to come in 2012 or 2015, or if you’re going to have the technology to do CCS or not? One can never have a perfectly predictable future, but to the extent we have some control over the uncertainty that we self-inflict, I’d always vote for eliminating that uncertainty and allowing a rational glide path to investing. Because these investments will pay off in the end. Whenever you use your national resources wisely, society is better off. We’ll be able to use them wisely once we have a much clearer view of how stringently we want to regulate this particular pollutant.

Morris: I’d add that I don’t think we can afford not to go forward and do these things, notwithstanding the current economic situation. The sooner we have these answers, the better off we’ll be as a country, and quite honestly, the better off we’ll be as a world. Because it’s clear to me that the utilities in India, China and other stretches of the world are waiting to see what steps the United States will take. This is an area where we can lead the way.

To Ralph’s point, developing and deploying this technology will provide long-term benefits to jobs in this country, and intellectual capital we can export to other