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Friday, May 22, 2009
How I See It
Regulated competition needed to spur green power
MHT's Efrain Viscarolasaga: Tech companies may have to wait for stimulus funds
MHT's Efrain Viscarolasaga: Preparing the smart grid for more power
MHT reporter Efrain Viscarolasaga on NECN: Green tech brings jobs back to Mass.
Recently, Congressman Ed Markey introduced the “American Clean Energy and Security Bill,” which provides a path to a cleaner and greener electricity sector. Most important, it creates a renewable electricity requirement beginning at 6 percent in 2012 and gradually rising to 25 percent in 2025.
From state, regional and national perspectives, this requirement will transform our electricity sector from the largest single source of greenhouse gas emissions into a hotbed of innovation in green power projects. For this new world to emerge, however, many states will have to change how they conduct business in the huge, unevenly regulated, and complex electricity sector. The development of a vast array of “fuels from heaven” such as wind and solar energy will require the development of transmission lines to send renewable energy to consumers.
This is a vast undertaking that will provide employment and investment opportunities. We should unleash the creative energies of our most innovative businesses — the Googles of electricity — by encouraging them to compete to provide America with affordable, clean energy.
We shouldn’t let the first energy companies that walk in the door, or utilities, lead simply because these activities occur in their traditional service areas. Instead, we should make people and companies earn the opportunity through a process that harnesses the best of competition and regulation: regulated competition.
We need to revive on a national scale the use of regulated, competitive procurements of renewables and transmission. These procurements should be organized around open and competitive requests for proposals that lead to long-term power purchase agreements (PPAs).
In Massachusetts, lawmakers recently enacted the Green Communities Act requiring utilities to solicit long-term contract proposals for PPAs from renewable energy developers. These PPAs will facilitate the financing of new renewable generation and, done through a competitive process, save consumers money.
The winners of generation and transmission projects in a regulated competitive process will be specialists who will not be allowed to pass cost overruns to electric ratepayers. That discipline forces them to bring projects in “on budget and on schedule,” thereby absorbing additional cost burdens.
In New England, a recent proposal by Northeast Utilities and NStar to use a PPA to finance a multi-billion-dollar transmission-plus-hydroelectric project that they own is an innovative step in the right direction.
The opportunity to compete should be open to others. Developers in New England and across the country stand ready to meet our nation’s energy and environmental objectives.
Ed Krapels is chairman of the New England Independent Transmission Co., the developer of the “Green Line” power transmission line in New England.
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