CNet reports that the CEO of Duke Energy gave a speech at the MIT Energy Conference on Saturday.

James Rogers claims the technology exists for “smart grids” and energy-saving technology, but “we” (meaning government) need to spend money to make it happen.

Money may need to be spent to clean up the grids (for brevity I’m shelving the climate change arguments for this post), but there is another way than using tax dollars. Governor Strickland is fighting legislation to deregulate power companies in Ohio. Underpricing leads to shortages — who remembers the Cleveland-plus brownouts? Deregulate the energy sector, let prices come up, and energy companies will have their own money to advance the technology. Add in some competition and choice, for example between “green” and “non-green” utilities, and price shocks would be mitigated.

LOOK UP
Creative Commons License photo credit: dc73

Towards the end of the article, there is something strange:

Rogers also called for a fundamental change to utility regulation that does not tie the company’s revenues to the amount of power it sells.

Instead, the utilities that can run their power networks most efficiently through software should be the most successful financially, he said.

“I want to change my model so that I create value not by building power plants. I create value by optimizing those networks,” Rogers said.

I recall on my electric bill that I get billed based on the amount of electricity I used. This makes sense to me. What does not make sense to me is getting billed for an improvement for how the utility delivers that electricity to me. That affects the cost side of the bottom line, not the revenue side. As long as AEP delivers the electricity to me, why should I pay for how well AEP saves its own money?