Greenleaf board member Dick Munson, EDF’s Director for Midwest Clean Energy, along with Lynne Kiesling, Associate Professor of Instruction in Economics at Northwestern University, recently published an article in Electricity Policy titled: “A Revolution in Power: Where We’ve Come From, Where We’re Headed.” It explores the historic relationship between innovation, the US power markets, and the regulatory environment surrounding electricity, and discusses how new players are bringing investment and innovation to the US electricity market.
According to the article, the electricity market and resource mix within the US is opening up, while public policy around electricity remains stagnant and outdated. Influential entrepreneurs like Google, Walmart and Johnson Controls are encouraging change in the US electricity markets by offering up more innovative products and greater access to alternative methods of generation. Despite these new offerings and innovative technologies, the US’ regulatory structure around the electricity market remains focused on risk-averse utility monopolies.
Muson and Kiesling argue that US policies on electricity must evolve alongside these new technologies and systems, citing examples of state policies that have begun to embrace the new and innovative systems currently in the market as policy models. Examples include New York’s “Reforming Energy Vision,” which is a forward-thinking approach to developing NY’s electric grid. It “…seeks to align utility business models with the creation of a more efficient, resilient, and clean electric grid,” while Illinois policymakers are considering legislation to create more effective markets for electricity attributes.
While opposition and setbacks to state initiatives are inevitable, the article stresses that the state programs demonstrate the growing need for public policy to converge with and even encourage technological advancements in the electricity markets and other industries. As more competition floods the market, innovation and investment will be stimulated, and consumers will be presented with greater choice as well as receive more efficient power. What is needed is for public policy and utility monopolies to adapt to the times and embrace the electrical market’s new wave of innovation.