january 2014 energybiz interview when asked if he were starting over in the power industry … “i...

January 2014 EnergyBiz interview when asked if he were starting over in the power industry …

“I would put solar on rooftops. I would want the ability to deploy new technologies that lead to productivity gains in the use of electricity in homes and businesses. I would go after the monopoly that I see weakened over the last 25 years. My goal would be to take customers away from utilities as fast as I could, because I think they’re vulnerable. Regulations will not be changed fast enough… The business model will not be changed fast enough.”

Jim Rogers, former CEO Duke Energy

This is a significant threat to the future of North Carolina

What is wrong…

• Antiquated regulatory scheme.

• State sanctioned monopoly built around a market model that no longer exist.

• System prohibits or resist new technologies and business models.

• No free market efficiency or innovation

Antiquated regulatory scheme.

• NCUC is seriously under resourced and overburdened with a regulatory system that is antiquated, passive, and overly broad

• No free market focus or adaptive methodology for new technologies or business models.

• No proactive regulatory component

State sanctioned monopoly built around a market model that is no long viable.

• 75 year old model based on ever expanding energy demand and 1930 technology.

• Regulatory scheme that does not rapidly adapt for new technology or business models.

• Incorporates all the inefficiencies of monopoly markets and resist innovation.

• Regulatory scheme that does not address the security of electricity and the vulnerability to modern threats.

Power demand is falling.

Prohibits or resist new technologies and new business models.

• Private construction of generation. (2nd Cycle cost for ground mounted fixed tilt solar after 5 years…. 66 cents per watt)

• Distributed generation vs mega generation construction.

• Inclusion of decommissioning cost and fuel residue.

• Inclusion of line loss or smart grid evolution

CONVENTIONALCapital cost per watt

(gas, coal, nuke)

$1.23 - $1.46Not including: – fuel cost– maintenance cost, – fuel residue disposal cost– Decommissioning cost

SOLARCapital cost per watt

(Ground mount, fixed tilt)

$1.85

No FuelMinor maintenance cost, No fuel residue costMinor decommissioning cos

No free market efficiency or innovation

• Wasteful - No competitive efficiency• Rewards stagnation, not innovation• No comparative analysis of alternatives• Regulatory inertia • Institutionalized corporate mindset• No forward thinking strategy• Strong resistance to new players or technology

What is needed….• Stop the posturing and make our energy market a priority.

• NCUC resources and revision including alternative and comparative analysis mission.

• Utility separation into generation, transmission and distribution.

• Delineation that utility regulatory authority ends at the meter. Free market on private side.

• Strategy for introducing free market competition and efficiency into model.

• Regulatory mandate of distributed generation

NC Solar

Savings Due to Energy Eff.

Total Duke Generation

0 5000 10000 15000 20000 25000

361.8

2256

20320

Stop the posturing

Power demand is falling.

Power Prices are rising

Adapt to market changes or embrace the economic sideline

• Encourage new technologies• Encourage new business models• Encourage free market efficiency & innovation• Stop passive regulatory system- be proactive.

Keep your eye on the ball.

Companies have 49 other States they can go to and most are not regulated.