Electric Deregulation Has Made Us Captive to Special Interests and There Is Nothing Free Market About It

Guest Post by Anonymous.

I worked for a regulated utility for 25 years and then 20 years in the deregulated sector- all in power plants.

Back in the day, when a utility decided a new plant was necessary, the process of determining size and location was debated between the transmission group and generation, both of which were part of the utility. Planning for the new plant was provided by another department within the utility. 

After much discussion and debate, and the decision to build a new plant was made, detailed electrical and mechanical specifications were developed so as to provide ideal reinforcement and reliability to support the utility’s service area. Issues such as voltage support, load pockets and power supply were addressed by this process. 

Modern Natural Power Plant, Source: Google Earth / 2024 Airbus

With the advent of deregulation, all of this went out the door. 

Plant developers were only interested in capital costs and return on investment and could care less about voltage regulation or any other transmission issue.  As time went on, plant owners and the transmission operators got into heated arguments over numerous issues such as Installed Capacity (ICAP) and ancillary services pricing.

The previous detailed planning for new plants was basically abandoned, and that void was filled by environmental activists and politicians. Generators and transmission operators hired legions of attorneys to advocate their various interests. 

So, what was once an industry run by engineers became “managed” by attorneys, politicians and enviros. That’s why the industry is in the  current mess.  Most of the Regional Transmission Operators (RTOs) have issued load warnings for the coming years that never would have happened if the industry remained regulated.  So you can imagine my views on deregulation.

Enviros have made it even worse. During my time as a manager, I spent many hours meeting with various environmental regulators and activists. During the earlier years, regulators were somewhat reasonable, but there was always some level of distrust on their part.  As time went on, the distrust increased and relationships became more adversarial. 

This was despite the fact my company had a very strong environmental department staffed by professionals with degrees in environmental engineering. We strictly adhered to all of our various permits, and never, ever deliberately violated a permit condition. We had yearly audits on our environmental performance and made every effort to abide by the letter of the law. Over 45 years, I never heard of, let alone witnessed, a willful violation of a permit. 

Despite what, in my view, was excellent performance, I learned through the years the enviros still distrusted us. The activists believed we were essentially evil liars and refused to believe anything we said.  Even after public outreach and numerous attempts to communicate with these people, they didn’t change their opinion. 

So, my conclusion is this: there’s little or nothing a company can say or actually do to reason with environmental advocates. Unfortunately, any attempt at meaningful discussion is a fool’s errand.

So, that’s where are. We’re living with an electric grid captive to special interests, environmental and otherwise, a grid that may appear deregulated and free but is anything but.

#Electricity #Grid #RTOs #Deregulation #Enviros #PowerPlants