Climate change – heat waves, water shortages, and reduced flexibility – poses huge risks for electric utility infrastructure.
Policy Shift: 2009 Law & Lawyers Report
Legal and regulatory changes are transforming the industry.
the face of significant political opposition? It’s not clear the policy makers will follow through—and if they do, will they understand all the implications of the policies they put in place?”
If history offers any guide, they won’t anticipate all the consequences of a major energy policy shift. For instance, when Congress enacted energy legislation in 1978, it didn’t foresee the transformative effects of the Public Utility Regulatory Policies Act (PURPA)—which opened the door to wholesale market competition and ultimately led the industry down the path of deregulation. But also lawmakers didn’t understand what they were doing when they prohibited using natural gas as a power generation fuel as part of the same package of legislation. Today’s policy changes are, if anything, much more dramatic than the 1978 legislation, or indeed anything that’s happened since. But while these changes are far from complete, and their destination remains unknown, their general direction seems clear.
“With the higher awareness of the need to take action to develop clean and domestic, renewable sources of energy, we will see a very real change in a short period of time,” Pataki says. “This can be a positive change for the environment and for the economy, if it means we’ll rely more on domestic sources of energy. But it also can damage our economy if [lawmakers use it for] playing to political favorites.”
The key to executing this policy shift successfully will be for decision makers at all levels within the industry and policy communities to consider their immediate interests and concerns in the context of the long-term, big-picture trends facing America—a deceptively simple challenge.
“On all these policies—smart grid, transmission, reliability and climate—we have to be really smart,” Bogorad says. “We can’t throw money where it’s not needed. We have to find cost-effective ways to deal with the issues we face.”