Tuesday, April 5, 2011

Who Is Raising Power Prices? The House of Representatives


If your electricity bill goes up in the near future, there is a good chance you will be able to blame the Republican-controlled Congress.
Speaking at the Commonwealth Club in San Francisco this week, Duke Energy CEO Jim Rogers outlined how a clash bet...

If your electricity bill goes up in the near future, there is a good chance you will be able to blame the Republican-controlled Congress.


Speaking at the Commonwealth Club in San Francisco this week, Duke Energy CEO Jim Rogers outlined how a clash between administrative directives and congressional inaction may lead to higher power prices. The U.S. Supreme Court has confirmed that the EPA has the power to regulate carbon emissions and the EPA has said it will flex this power, Rogers noted.


"The EPA will act and it will turn into higher prices," he said. "I am supportive of them going forward, but it will raise prices. It is not the cheapest way to implement putting a cost on carbon."


So why blame Congress? Congress has had ample opportunity to pass cap-and-trade legislation, a cheaper way to regulate carbon emissions. When Democrats controlled Congress, a cap-and-trade bill was passed. It then got hung up in the Senate and the subsequent 2010 election put it in the deep freeze.


"It will become obvious that Congress has failed to act," he said.


The Republican criticism of carbon cap-and-trade is also somewhat ironic, he added. The first President Bush promoted and passed the first cap-and-trade program to control SOx and NOx emissions. It has worked great.


"They demonize cap-and-trade because they don't believe the science behind climate change," he said, further noting that 26 percent of Americans at times have not believed men landed on the moon.


Rogers, though, added that the Obama Administration's strategy of pursuing a health care bill ahead of an energy plan also helped sink the earlier bill. Historically speaking, a White House can get one major piece of legislation passed in a year, but not two. The subsequent election has since then put the idea of carbon regulation in the deep freeze.


Health care "reduced the probability significantly that there would be a second major piece of legislation passed," he said.


On other notes, Rogers said he is intrigued about the prospect of modular nuclear plants--"By 2030 they will be cost competitive with the larger nuclear plants," he said--and by 2050 nuclear, despite the Fukushima disaster, and solar could become mainstays in the power business.


"I think by 2050 nuclear will trump coal and solar will trump wind," he said.


It seems like everyone is speaking today. Here's a few more comments from around the horn.


--Meanwhile, also at the Commonwealth Club, T.J. Glauthier, the former Deputy Secretary of Energy, noted that efficiency measures do work. Back in 1975, U.S. energy consumption came to 75 quads, or 75 quadrillion BTUs. Many predicted it would rise to 150 quads. Instead, it just came to 100 quads. The CAFE standards for vehicles, efficiency standards for homes and appliances and efforts within industry helped keep a lid on consumption.


Jim Sweeney, who runs Stanford's Precourt Institute for Energy Efficiency and worked in the Ford Administration, noted that CAFE standards worked great, until we relaxed them. In 1973, the average vehicle in the U.S. got 12 miles a gallon. Between 1975 and 1985, it climbed to nearly 20 miles per gallon. Then the standards weren't raised and mileage improvements hit a plateau. The current standard, which will force manufacturers to get to 35 miles per gallon, will likely prompt another push toward efficiency.


Sweeney also took a few jabs at former Presidential policies. Nixon and Ford sought to achieve energy independence for the U.S. by 1985. The only result of the policy was to redefine "independence" and "1985." He also noted that Jimmy Carter's plan, calling energy independence the "moral equivalent of war" could be reduced to the unfortunate acronym MEOW. (Since Nixon first pledged to get us off foreign oil, imports have risen from 28 percent to 67 percent.)


--At the Fortune Brainstorm Green conference, Rob Bernard, Microsoft's chief environmental strategist, reiterated that Hohm--Microsoft's home management tool--was not going well. Back in early March, Bernard said that Microsoft was shifting its focus from home energy consumption to commercial buildings. At Brainstorm Green, he said Microsoft will also look at EV charging.


--And Tom Siebel, founder of Siebel Systems, finally gave a little more information on C3. The company will make software that tracks emissions and energy consumption and will help companies lower their resource consumption. Dow is an early user. PG&E will promote it to its customers. Hewlett Packard is working with the company too.


Siebel didn't say it, but C3 is also working with Hitachi Consulting, according to Hitachi Consulting execs. The strategy has been to get at least one major company in ten or so verticals before coming out of the shell.


Still, we have to ask, what's the big deal? Other companies--Hara, Enviance, ENXSuite--already sell similar software packages and have impressive lists of customers. At a recent conference in Washington D.C. a C3 exec gave a three-page PowerPoint presentation with a total of six words on it. Six words. It seemed like a pitch for a time share. The main difference between C3 and its competitors, so far, seems to be that it has a number of high-powered people with Washington connections on its staff: Condoleezza Rice, Spencer Abraham, etc.


That's like advertising yourself as the Halliburton of greentech.


Hopefully, more concrete information about how its software performs versus the competition comes soon.




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