Thursday, May 02, 2013
Last week I got an email from a manufacturing company in South Attleboro, Mass., that I’ve done business with for over 35 years telling me that they are installing 1,200 solar panels on their buildings to cover 95 percent of their electrical power needs.
That kind of announcement frightens power companies. A report by the Edison Electric Institute in January 2013, “Disruptive Challenges: Financial Implications and Strategic Responses to a Changing Retail Electric Business” available online describes the threat of new technologies to the standard utility company’s business model where they make power and sell it to captive consumers with prices and profits protected by state commissions like the Arkansas Public Service Commission.
There are three things happening quickly that are connected to future demand. The first is that our appliances, heat pumps, lighting and electronic products are rapidly becoming more efficient in their use of power.
The second technological change is in storage of electricity. Batteries developed for the electric car are becoming more efficient, and if that trend continues, they could be used to store electricity generated off the grid from wind and solar. In fact, a recent TV ad from Nissan showed one of their electric cars powering a whole house.
The third important factor is that wind and solar energy devices are becoming much less expensive, even to the point that a small manufacturing company in Massachusetts can buy 1,200 of them and take firm steps away from dependence on the grid and still compete with China in the production of their goods.
The Edison Electric Institute Report on “Disruptive Challenges” compares their own industry to that of the telephone. It notes that as cell phone technology exploded in the marketplace, homeowners began abandoning their landlines, thus chipping away at the most secure profit sources for the telecom industry. This change took place over the course of fewer than 10 years, and experts warn that changes due to technology come at ever increasing rates.
As we look at our cell phone bills each month it may seem that the telecom industry does quite well. But the big concern for the power companies is revealed in the bottom line view for investors (not consumers). How well have telecom company stocks done in comparison to the Standard and Poor index for investors? Not well enough, it seems. The Edison Electric Institute notes that investors in telecoms have suffered because many consumers discovered that they could be happy without their landlines, and the EEI fears that consumers of electric power will soon discover exactly the same thing.
The Edison Electric Institute report on “Disruptive Challenges” suggests that wind, solar and off grid power opportunities will reduce demand, and prove to investors the one-hundred-year-old model of stringing massive power lines across the beautiful land to deliver dirty coal power to captive consumers may soon be obsolete. This would lead investors to abandon their investments in the power grid and search for more certain profits. If your bottom line is stock price, rather than customer service, this would be a scary notion indeed.
If a manufacturing company in cloudy Massachusetts can cut 95 percent of its power use, what would stop landowners in Carroll County from doing exactly the same thing? Once consumers realize they can safely and cost effectively take matters of electric generation into their own cleaner hands, thus reducing demand on the grid, unnecessary expansions of that grid like the 345 kV line proposed to bisect Carroll County will become a huge financial burden for power companies like SWEPCO that the few remaining customers will pay for (if they can) through exorbitant rates.
As we watch an inexplicable concrete fortress being built for Carroll Electric in Berryville, and as property owners across Benton, Madison and Carroll Counties feel outrage at the possible theft and destruction of our properties by SWEPCO, and as my wife and I contemplate severing our last remaining telephone land line, I wonder how power companies can be so out of touch and show so little concern for folks like us.
Join Save the Ozarks and bring some sanity and common sense to the matter of electric power in the Ozarks.
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