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January 2014 EnergyBiz interview when asked if he were starting over in the power industry … - PowerPoint PPT Presentation
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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.