Monday, November 30, 2009

Earth to Jim Rogers, Duke Energy CEO

I just read that Jim Rogers, CEO of electricity monolith Duke Energy, "stole the show" at a "carbon economy" conference earlier this month. Oh really?

Here is what the dispatch said:

For generations, leaving energy policy decisions to the states has worked fine. But today's energy and climate debate includes many quandaries, as Rogers explained at the conference. "I hear people talk about renewables," he said, "but on the other hand, they don't talk about eminent domain to allow transmission lines to be built. They talk about low carbon, but they don't want to talk about nuclear power as part of the solution. They talk about decoupling, but they don't talk about giving incentives for investment. From my standpoint, we need to get beyond these half-measures, and go to work on a solution which encompasses a new energy federalism. And let's have an honest conversation about it."

I'm up for honest conversations but the discussion needs to be even broader, and more brutally honest, than the one Rogers proposes. How about considering the hypothesis that a century of reliance on investor-owned utilities to provide the bulk of America's electricity has been a failure? That's probably an overstatement, but as long as we are considering the kind of paradigm shifts that Rogers supposes, why not take a look at development and planning mechanisms that center on alternatives to investor-owned entities?

Interestingly, Rogers' own comments, quoted above, contain a frank admission that investor-owned entities are not up to the task. When he mentions "incentives for investment," he is talking about shoring up the private utility sector by giving free money to utility shareholders. In other words, Rogers is admitting that the "just and reasonable" rate of return that traditional ratemaking is supposed to yield, and that is supposed to take into account the risk utility investors incur, isn't going to attract investment in the energy infrastructure the world needs to stave off (or at least reduce) climate change.

Maybe that kind of corporate welfare is the answer -- but, as Rogers suggests, let's have an honest conversation about it.
Posted by at 10:38 AM

1 comments:

  1. How about an open and thorough discussion of the magnitude of incentives and subsidies (or, more accurately, handouts) that the oil and coal industries have received over the past century. (Including the costs to society of dismantling then trying to rebuild our commuter rail systems, the costs of wars and other foreign involvement that continue to enable the oil companies to obtain their raw materials, and the ecological costs, both home and abroad.) Why have the oil companies been allowed to externalize the costs necessary for them to acquire their crude, while they reap record profits?

    That discussion could be accompanied by a discussion of how we could level the playing field by providing subsidies to clean, decentralized, and renewable energy sources. (similar in magnitude, duration, and consistency to those provided to oil & coal)

    The model of incentives should change, though. Rather than automatically and almost exclusively feeding billions to centralized energy companies, we need to bolster subsidies to the end users (for improvement in efficiency and conservation) and to distributed generation industries (for providing localized reliable, clean, renewable energy technologies, and conservation technologies). Any company that truly provides technology for renewable, clean energy or conservation would then benefit from a 'trickle up' effect as they proved their worth and the subsidies flowed to them.

    Certainly R&D needs to be supported, but we have many technologies that are ready to go. We need to support them through feed-in tariffs, revolving community financing funds, and subsidies to public entities such as schools so they aren't blocked from installing renewable technologies simply because they don't get the same tax incentives as private individuals.
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