Meanings, Myths, Measures
Steve Mitnick has authored five books on the economics, history, and people of the utilities industries. While in the consulting practice leadership of McKinsey & Co. and Marsh & McLennan, he advised utility leaders. He led a transmission development company and was a New York Governor’s chief energy advisor. Mitnick was an expert witness appearing before utility regulatory commissions of six states, D.C., FERC, and in Canada, and taught microeconomics, macroeconomics, and statistics at Georgetown University.
Sometimes when I hear someone talk about affordability, in our industry, I eventually figure out they're talking about those residential customers that aren't paying some or all their electric bills on time or at all. The concern is that other customers must pick up their slack.
Sometimes when I hear someone talk about affordability, I eventually figure out they're talking about those residential customers that are finding it difficult to pay their bills for electricity and indeed for everything. The concern is that these customers are suffering hardship.
Sometimes when I hear someone talk about affordability, I eventually figure out they're talking about pressures from the regulatory community about increased utility investment in the energy transformation; that this will precipitate a customer backlash. And from the financial community that the regulatory community will be particularly tough on utilities because of the potential for a backlash.
These are all important concerns of course. But whenever we are talking about affordability, may we please sort out which of these meanings we mean and not conflate them?
I have been thinking about affordability a lot — all these variations — in recent months. Particularly about the persistent myths of affordability.