A New Approach to Electric Power

 

 
  March 26, 2007
 
A large group of utility industry executives quietly convened in Kansas City, Mo., on a snowy day in January to sign on to an unprecedented shift in business strategy and corporate culture, entirely rethinking how they keep the lights on in homes and offices across America. The twin goals they hope to reach are a dramatic boost in energy efficiency and a reduction in greenhouse gas emissions.

Martin Rosenberg
Editor-in-Chief
EnergyBiz Magazine

It will require a profound shift in an industry that for a century has understood its mission to be encouraging the ever-increasing use of electric power.

At long last, Thomas Edison is ready to be introduced to Bill Gates.

Call it a remarkable convergence of political, technological and business trends.

Al Gore's zealous campaign against global warming and the recent sea change in Democratic power in Congress provide the backdrop.

The power of the microchip and huge leaps in communications capabilities in recent decades make it possible to take an array of dumb, energy-voracious appliances and machines and forge a coordinated, efficient network that takes a minimal flow of electrons to make our lives productive and pleasant.

Tens of billions are about to be invested to replace aging power infrastructure and deal with an anticipated surge in power demand. Decisions made today will affect consumers for generations. So the moment is right for utilities to rethink a century-old paternalistic approach to their business and forge a smarter, collaborative relationship with their customers.

Mindful of the significance of the choices before them, upwards of 50 senior managers and CEOs of investor-owned utilities, rural electric co-ops and public power agencies gathered in response to an invitation from Michael Chesser, chairman and CEO of the local utility, Great Plains Energy. The attendees serve about 60 percent of America.

Chesser, respected throughout the industry as a soft-spoken visionary, was appointed chairman of new energy technology committees at the Electric Power Research Institute, the research arm of utilities, and the Edison Electric Institute, the political voice of investor-owned utilities.

For the past year, EPRI has held five regional meetings with utilities to scope out what needs to get done short-term and long-term. The blueprints for a complex, industry wide self-transformation have been drafted. The utilities plan a major communications campaign with their customers and policy makers in the months ahead.

While revolutionary, the program is not wild-eyed radical. Utilities, genetically risk-averse, are convinced that any investment in new technology made today will not look ridiculously silly to stockholders and regulators a year or two from now. What do they have in mind?

At some point, there will be an intelligent box in every home, office and factory that will be linked to any device that slurps significant amounts of electric current. That box will be in communication with the utility, receiving ever-changing pricing information that varies with power demand. Turn on your dishwasher and it is set to go. But that smart box will determine the best time to actually kick the dishwasher into action, saving you money and allowing the utility to use its generation resources in the most efficient way. Such a new approach will probably trim overall energy use by 4 percent simply by making energy users more aware of their use of electricity.

Look for much more dramatic energy savings as the utility industry at long last gets proactive and pressures appliance manufacturers to understand the urgency of designing products that are more energy stingy, says Clark Gellings, EPRI vice president of innovation.

"I am going to talk to them about what this market is going to look like so that they can be part of it," he says. Take compact fluorescent bulbs: Gellings wants to know why they cannot be 30 percent more efficient in a year.

In two decades, as America cycles through its current inventory of big-screen TVs, refrigerators, computers, compressors and equipment, Gellings and others believe that a new generation of appliances and machinery, networked and responsive to price signals, can cut electricity consumption by as much as 25 to 45 percent. That will keep a heap of coal in the ground and an ocean of greenhouse gases out of America's smokestacks.

The utility industry intends to promulgate an economy-wide, sophisticated understanding of the complex factors shaping greenhouse gas emissions and to help forge a consensus on the best technology and most economic approaches to putting a lid on the problem.

Mike Chesser and his industry buddies intend to mount their utility revolution on two fronts. The technology has to be developed and deployed. And regulators, legislators and government officials have to make sure that utilities can make money doing what needs to be done. It will take decades to develop new carbon sequestration techniques and a new generation of safe and politically acceptable nuclear power that can begin to solve the problem of global warming. "Energy efficiency can be the bridge that helps us start down that path," Chesser says. "Between 2010 and 2015, we can meet half of our electricity demand growth with energy efficiency."

Chesser, who is 58, believes that much of the pioneering work to see this accomplished can be done before he retires. It all started, appropriately, in the Show-Me state, known for its hard-headed practicality. It is quite a remarkable development.

 Subscribe to EnergyBiz magazine today.

Energy Central

Copyright © 1996-2006 by CyberTech, Inc. All rights reserved.