Op-ed: Why More Regulations Are Not the Right Solution to Solving Energy Utility Reliability Issues
The following is an op-ed from Dan Allegretti, on behalf of the Retail Energy Supply Association (RESA). RetailEnergyX.com disclaims any responsibility for the content, data, or characterizations contained in the op-ed below, and makes no averment as to its accuracy or statements. Any views expressed in the release may not necessarily reflect the views of RetailEnergyX.com.
Why More Regulations Are Not the Right Solution to Solving Energy Utility Reliability Issues
By: Dan Allegretti, RESA
In the wake of a massive power outage following Tropical Storm Isaias, anger and frustration have been on full display from Connecticut residents and regulators while utilities took up to nine days to restore power to those affected. Eversource Energy, the utility that delivers most energy to the state, has largely taken the brunt of the fallout for the excessive restoration times, while more than 800,000 people waited for their power to turn on.
Just this week, Eversource’s CEO, Jim Judge, was asked to testify before the Energy and Technology legislative committee later this month to answer questions about why response times to restore service were painfully slow. Political leaders have not held back their outrage, while others have proposed that broad regulatory reforms be created to help "prevent" this from happening in the future.
PURA, the Public Utilities Regulatory Authority, was already investigating both Eversource and United Illuminating -- the two utilities that provide electric service to Connecticut customers -- for the recent rate hikes that started July 1. Now PURA is looking into the preparation for and response to the recent blackouts caused by mother nature.
But that’s not all. There is a new idea being floated by Senator Norm Needleman and Representative David Arconti, among others, calling for the creation of the "Take Back Our Grid Act". It’s not a proposed bill, but it certainly has gained widespread attention.
Perhaps on paper some of these ideas and actions seem like the right things to pursue. But are we focused on the right things? Will more regulation ultimately solve the problem?
RESA, the Retail Energy Supply Association, believes the challenges that utilities collectively are facing -- including Eversource -- will not be solved by adding more regulations and rules to follow to the complexities that already exist. Perhaps we’d be best served to take a step back and look at the situation through a wider lens.
For starters, we must keep in mind that we all have a collective goal: Providing people with access to safe, reliable power. When we have companies like Eversource -- who are responsible for wires, poles and transmission -- become distracted and defocused by wearing both electric provider and electric utility hats – no one benefits, customers in particular.
One of the most common sticking points for electricity customers is the distinction between an electricity provider and an electric utility. Both are vital to the success of electricity restructuring, but they each play different roles.
Electricity providers are companies that purchase wholesale electricity from electricity generators and sell it at a retail level to the general public. They are also responsible for delivering electricity to the appropriate local utility company that serves their customers.
Electric utilities are the companies that own and maintain utility poles and power lines. They are responsible for the distribution, or delivery, of electricity to the customers who live in their service area. The electric utilities also employ the line workers that restore your power after a major weather event and repair the downed power lines and damaged poles.
RESA believes that the right solution does not exist with more regulation or legislation. And RESA’s members (retail suppliers) recognize that utilities have their hands full maintaining the wires, poles and transmission. Utilities need to be afforded the opportunity to focus on making reliability their number one priority.
How can retail suppliers help? First, by acknowledging that utilities are not in this alone. Retail suppliers can complement the role of utilities in delivering power. Retail suppliers not only can supply electricity to consumers, but can also help them meet environmental mandates and reduce energy consumption. Retail suppliers are a key part of the collective responsibility for meeting Connecticut’s need for clean, reliable electricity. Because they must compete with one another for customer business, unlike utilities, retail suppliers are under constant market pressure to reduce costs and innovate better products and services.
Often utilities and retail suppliers see themselves as competitors rather than strategic partners. The need for transparency across all parties -- not simply one party -- would be a place to start. Having legislators and regulators continue to blame utilities for all today’s issues is short sighted. With each challenge there is an opportunity. If the goal is to provide consumers reliable service, then we must afford utilities the opportunity to be laser focused on what they do best.