As Utilities Embrace Change, FirstEnergy’s Strategy Is Resistance and Protectionism
EDF’s Dick Munson decries FirstEnergy’s fight against the future of energy.
It’s easy to make the case that America’s electricity industry is stuck in the past. But it’s impossible to suggest a new energy future isn’t already on its way.
Our electricity landscape is changing dramatically. Texas, the birthplace of the U.S. oil boom a century ago, now produces more wind power than most countries. New York is testing microgrids and bringing new competition to electricity markets. Illinois is modernizing the electric grid, empowering people to control their energy use and reduce their electricity bills through smart-meter data. Homes are generating — and will soon be storing — their own electricity. Electric vehicles that charge in three hours and accelerate like a sports car are coming to more garages.
These developments are exciting and potentially very beneficial to the environment, as a smarter grid and more renewable energy reduce our reliance on coal. But they upset some old-school utilities and a 100-year-old utility business model predicated on the idea that selling more electricity is the only route to profit — and that how we get that electricity has no consequences.
Not surprisingly, some are resisting change. Exhibit A: FirstEnergy.
The Akron, Ohio utility owns power plants and transmission lines throughout the Northeast and Midwest and currently appears to be campaigning for poster child of the 20th century. Last year, FirstEnergy pushed Ohio to become the first state to gut its successful clean energy standards by arguing efficiency programs would raise electricity rates. However, in previous filings before the Public Utilities Commission of Ohio (PUCO), the company admitted the initiatives saved families millions.
In more honest (but less public) presentations to investors, the company’s executives revealed low-cost, clean energy efforts were interfering with sales and profits.
FirstEnergy is also trying to block a new competitor — demand response — which pays people to conserve energy when the electric grid is stressed. This low-cost, zero-carbon energy resource saved customers in the mid-Atlantic region $11.8 billion in 2013. But it’s a threat to companies like FirstEnergy that see demand as something that can only be met with more generation — its generation.
FirstEnergy is now attempting to get demand response kicked out of the PJM (mid-Atlantic) energy market. I suppose if you can’t beat your competition, maybe you can just eliminate it.