The Regulatory Assistance Project has a new study out called “Clean First: Aligning Power Sector Regulation with Environmental and Climate Goals.” Before you roll over and hit the snooze button, listen to the premise:
“[I]n regulatory decisions, clean resources should get every reasonable preference over resources that have greater environmental impact. Breaking down policies into five categories –- transmission pricing and access; capacity markets; dispatch; ancillary services; and transmission planning and siting – the authors map out how the Clean First approach can put the power sector on course to meet long-term climate and environmental goals.”
Well, I’m all in favor of this. It’s what Plains Justice has been fighting for in regulatory docket after regulatory docket for the last four years. It sounds like plain old common sense and you can do it in cost-effective ways that ensure reliable power delivery. Who could be opposed to such a thing?
Every single investor-owned electric utility we’ve run into, that’s who. Their stand is, “Why should some bureaucrat have the power to tell me how to run my business, especially when their guiding principles veer away from keeping the lights on and making money?” In many jurisdictions, clean energy programs that lower bills just mean lower profits for utilities. There are ways to fix that profit model, but they can be controversial.
But that’s not the end of the story. Consumer-owned utilities aren’t rate regulated at all. The regulatory dockets that would allow for things like “integrated resource planning” don’t exist for them. There’s no regulation or law that requires them become more efficient or plan for efficiency, which would ultimately benefit their customers through lower rates, and there’s no energy alternative for their customers. Getting that kind of regulatory authority in place nationwide would look like the challenge Napoleon faced at Waterloo.
Regulating to achieve climate and environmental ends sounds like a nice rational way to do things. Unfortunately, you go down that path and the next thing you know you’ve got Congress debating taking away EPA’s authority to enforce the Clean Air Act. I’m not saying we shouldn’t try to improve utility regulation. It could certainly stand improvement. But it would be naive to think that this won’t be as big a fight as any other climate initiative that’s gone for a stroll down K Street recently.