Lions and luminaries who led the changes in utilities.
Jeremiah D. Lambert, a lawyer in Washington, D.C., has served PJM and other clients in the electric utility industry and has written extensively on energy-related topics.
A put down of the industry’s innovation can be put aside
Can utilities put EV batteries in the rate base?
Thomas Edison once hoped to make a fortune in the auto business—selling electric cars. Of course it never happened; he and Henry Ford tried and failed to bring a low-cost electric car to market. They scuttled the project after investing $1.5 million toward the effort—more than $32 million in today’s dollars. Edison’s nickel-iron batteries just couldn't match the performance of Ford’s petrol-powered bang-bang.
Economics, not politicians, will determine what tools are best.
Today’s utility business model depends chiefly on big power plants and long transmission lines—and federal and state policies reinforce that model. But as photovoltaics technology advances and systems get ever cheaper, distributed generation eventually might become the more competitive option. At that point, upstart companies might be better positioned than utilities to capture a share of this growing market, because they won’t be constrained by Edison-era economics.
Business models are evolving to suit a shifting industry landscape.
The next decade will bring serious disruption to the utility industry. But with cooperation from regulators and legislators, utility companies will be able to shift their business models to capture significant value—both in existing businesses and emerging ones.
A century or so ago, Thomas Edison’s commercialization of electricity unleashed an unprecedented cascade of change, altering the way humanity worked, lived and interacted. Today, with the convergent rise of the smart grid, renewable energy and electric vehicles (EVs), the power sector is embarking on a second era of transformation that promises to deliver a smarter, greener and more efficient 21st century.
Why electricity is good—and more is better.
A century of electrification shows clearly that more electricity—and cheaper electricity—enhances public health, raises living standards and also improves the environment. Conversely, higher prices harm businesses and families, with a disproportionate impact on low-income households. Public welfare goals are best served by public policies that make electricity more accessible and affordable to the masses—not less.
Utilities adapt to a shifting landscape.
The U.S. utility landscape is more dynamic and uncertain than it’s been since Thomas Edison and George Westinghouse waged their infamous war over alternating current—and the results might be just as fundamental to the industry’s future.
Smart-grid stimulus targets the wrong problem.
The $800 billion stimulus bill has spawned a feeding frenzy among would-be recipients of the money. Smart-grid technology companies, for example, are excited about the bill’s $4.5 billion in 50/50 matching grants to “modernize the electric grid.” However, not everybody is cheering.