MAILBOX: Utility Charges

Beginner

Regarding Tom China’s letter in HP176 (“Mailbox”) on utility charges, if you look back in time, there are a lot of similarities between what the electric utility industry is going through today and the telephone industry went through back in the ’70s, ’80s, and ’90s. When I worked for a telephone company, its approach was: “We may be the only phone company in town, and we sure do act like it!” Does that sound like the local utilities today? Back then, the phone companies were guaranteed a specific rate of return, and I believe that is still alive and well in the electric utility industry. Maybe they should be a “nonprofit” organization, which would eliminate the need to increase profits for shareholders. Look around you and see where that “only one in town” approach got the phone companies.

Competition was finally allowed (as solar is to the utilities now) and then there were many communications companies created (some supplying voice, cable, data, and equipment). Back in the ’60s, you could “get any color phone you wanted, as long as it was black.” Look around you today and see where competition and technology took us—from landlines and black phones to cellular, satellite phones/data and VOIP. Things change, and in this case, it was for the better.

You can compare the electric utilities’ future to the petroleum industry’s current condition. Supply is greater than the demand. With the transition to more fuel-efficient cars, the gas industry is still producing fuel, but they will gradually make adjustments. The way I see it, the utilities will still be producing electricity even if solar-electric installations are allowed to expand in the future (fewer restrictions, more incentives), but the electric companies will have to adapt to its new competition. The point is that they will need to become more efficient in production, distribution, maintenance, and support, and learn how to survive in a competitive marketplace—and not bury their heads in the sand by trying to block the inevitable.

If you look at the homes on my city block, only three of the 24 homes can use rooftop solar energy because of shading, so it is never going to be 100% solar, just as it will never be 100% electric automobiles. I am one of the lucky ones in the neighborhood who can have solar electricity at my house (6 hours of no shade).

So, what is it that really turns off consumers about big power utilities? Where we live in Florida, Duke Energy is the provider, and we are paying for a nuclear power plant that will never be built. I will bet you that those funds will never make it back into our pockets, and we will be paying for the “power plant on paper” for a long time to come. Unless, of course, the elected officials see the writing on the wall.

As long as you have stockholders in the electric utility industry equation, you will always have higher rates, as they will always protect their bottom line for the stockholders. Look at Nevada—the elected officials there allowed the utility company to levy higher fees on net metering customers, making it less desirable to install solar-electric systems.

Fortunately, we here in Florida just voted down Amendment No. 1 on the November ballot (not by much), which would have allowed Duke Energy to add fees and other restrictions to home PV installations. I guarantee that Duke Energy will be back within two years with another attempt. Their advertising campaign made it look so appealing, like it was going to be beneficial for both sides of the solar coin.

The electric utilities are where the phone companies were in the ’70s—unwilling to accept change and new technology that will have an impact on their profits and future. They, like the phone companies, did not know how to compete in a competitive environment. The electric utilities now have the opportunity to refocus on the future, and accept the fact that homes and businesses will be powered by renewable energy or whatever else future technology brings. It sure will be an interesting future!

Don Houdek • via e-mail

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