Why Are Utilities Worried?
The energy use per dollar of economic output has dropped steadily for the past 30 years. Even despite the addition of televisions, computers, and cell phones to our lives, per capita energy consumption has been fairly constant and is even projected to slowly decline over the next two decades. So why does this seemingly good news worry utilities? Declining sales mean declining shareholder returns. Combined with inflation, an aging infrastructure, and distributed generation, these forces leave utilities trying to recover increasing costs over fewer sales of electricity. John Shenot addressed these concerns at the RE-AMP meeting of non-profits and foundations across eight Midwestern states working on climate change and energy policy. [For more information on how to mitigate these issues, visit RAP’s online library for suggested reading, such as “Designing Distributed Generation Tariffs Well” and “Regulatory Considerations Associated with the Expanded Adoption of Distributed Solar.”]