A large group of utility industry executives quietly
convened in Kansas City, Mo., on a snowy day in January to
sign on to an unprecedented shift in business strategy and
corporate culture, entirely rethinking how they keep the
lights on in homes and offices across America. The twin
goals they hope to reach are a dramatic boost in energy
efficiency and a reduction in greenhouse gas emissions.
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Martin Rosenberg
Editor-in-Chief
EnergyBiz Magazine |
It will require a profound shift in an industry that
for a century has understood its mission to be encouraging
the ever-increasing use of electric power.
At long last, Thomas Edison is ready to be introduced
to Bill Gates.
Call it a remarkable convergence of political,
technological and business trends.
Al Gore's zealous campaign against global warming and
the recent sea change in Democratic power in Congress
provide the backdrop.
The power of the microchip and huge leaps in
communications capabilities in recent decades make it
possible to take an array of dumb, energy-voracious
appliances and machines and forge a coordinated, efficient
network that takes a minimal flow of electrons to make our
lives productive and pleasant.
Tens of billions are about to be invested to replace
aging power infrastructure and deal with an anticipated
surge in power demand. Decisions made today will affect
consumers for generations. So the moment is right for
utilities to rethink a century-old paternalistic approach
to their business and forge a smarter, collaborative
relationship with their customers.
Mindful of the significance of the choices before them,
upwards of 50 senior managers and CEOs of investor-owned
utilities, rural electric co-ops and public power agencies
gathered in response to an invitation from Michael
Chesser, chairman and CEO of the local utility, Great
Plains Energy. The attendees serve about 60 percent of
America.
Chesser, respected throughout the industry as a
soft-spoken visionary, was appointed chairman of new
energy technology committees at the Electric Power
Research Institute, the research arm of utilities, and the
Edison Electric Institute, the political voice of
investor-owned utilities.
For the past year, EPRI has held five regional meetings
with utilities to scope out what needs to get done
short-term and long-term. The blueprints for a complex,
industry wide self-transformation have been drafted. The
utilities plan a major communications campaign with their
customers and policy makers in the months ahead.
While revolutionary, the program is not wild-eyed
radical. Utilities, genetically risk-averse, are convinced
that any investment in new technology made today will not
look ridiculously silly to stockholders and regulators a
year or two from now. What do they have in mind?
At some point, there will be an intelligent box in
every home, office and factory that will be linked to any
device that slurps significant amounts of electric
current. That box will be in communication with the
utility, receiving ever-changing pricing information that
varies with power demand. Turn on your dishwasher and it
is set to go. But that smart box will determine the best
time to actually kick the dishwasher into action, saving
you money and allowing the utility to use its generation
resources in the most efficient way. Such a new approach
will probably trim overall energy use by 4 percent simply
by making energy users more aware of their use of
electricity.
Look for much more dramatic energy savings as the
utility industry at long last gets proactive and pressures
appliance manufacturers to understand the urgency of
designing products that are more energy stingy, says Clark
Gellings, EPRI vice president of innovation.
"I am going to talk to them about what this market is
going to look like so that they can be part of it," he
says. Take compact fluorescent bulbs: Gellings wants to
know why they cannot be 30 percent more efficient in a
year.
In two decades, as America cycles through its current
inventory of big-screen TVs, refrigerators, computers,
compressors and equipment, Gellings and others believe
that a new generation of appliances and machinery,
networked and responsive to price signals, can cut
electricity consumption by as much as 25 to 45 percent.
That will keep a heap of coal in the ground and an ocean
of greenhouse gases out of America's smokestacks.
The utility industry intends to promulgate an
economy-wide, sophisticated understanding of the complex
factors shaping greenhouse gas emissions and to help forge
a consensus on the best technology and most economic
approaches to putting a lid on the problem.
Mike Chesser and his industry buddies intend to mount
their utility revolution on two fronts. The technology has
to be developed and deployed. And regulators, legislators
and government officials have to make sure that utilities
can make money doing what needs to be done. It will take
decades to develop new carbon sequestration techniques and
a new generation of safe and politically acceptable
nuclear power that can begin to solve the problem of
global warming. "Energy efficiency can be the bridge that
helps us start down that path," Chesser says. "Between
2010 and 2015, we can meet half of our electricity demand
growth with energy efficiency."
Chesser, who is 58, believes that much of the
pioneering work to see this accomplished can be done
before he retires. It all started, appropriately, in the
Show-Me state, known for its hard-headed practicality. It
is quite a remarkable development.
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