Reports of my Death Have Been Greatly Exaggerated

We are all familiar with this quote from Mark Twain.  I open this article with it because it seems to capture the underlying feeling in the utility industry at this marktwaintime.  While Jim Rogers, the past chairman of Duke Energy, has now come out and declared the traditional electric utility model dead, I am guessing that most in the electric utility industry are repeating Mark Twain’s words under their breath.

Jim Rogers is noted for pithy quotes.  One of my favorites is “If you are not at the table, you are on the menu!”  Since I have written extensively about customer engagement and key account strategies, I could not agree more.  Yet, at this time, utilities seem to be pulling away from that role and resorting to their age old tactic of trying to change the rules of the game to be more in their favor.

I am not surprised.  Today’s flat electric load growth and upward pressure on rates makes it very tempting to look for financial tweaks that move the operating financials in the right direction.  But these also tend to embitter customers who see them as combative and a sign of resistance to needed energy supply change.  Yes, these customers simply do not understand the issues and seem especially uninterested in looking at the realities of our energy future.  But, when you put these questions to a public vote, they tend to vote for the gradual pressure in upward rates to get these choices into the market!

And yes, all the engineers who know the details can easily criticize the reality of fuel cells.  After all, these were five years off back in 1985 when I was manager of machinery development at Mechanical Technology Incorporated (MTI) and were the first in the country to actually put them in cars. Now they are about five years off if you listen to some of today’s car companies.  MTI spun off that division which is now Plug Power.  We engineers love to point out why things don’t work.  But there are a few of us who can look past the reasons why things don’t work and see opportunities for new ideas that can be made to work.  Don’t tell me “no” … tell me “how.”  There is almost always a way to make an idea work.

I am reminded of the comparison between the way our space program and Russia’s space program solved the problem of designing a way to write in space.  Our scientists tried to come up with a ball point pen that would work in zero gravity.  The Russians simply chose to use a pencil.

In the beginning … the grid was Direct Current

I am going to bring us all back to one of these engineers who figured out “how.”  And, ironically it was out of a customer service glitch.  Thomas Edison shifted the emphasis at his research center to “get even” with his local utility because they were demanding payment of his overdue energy bills.  On one level Edison thought he did by inventing the electric light.  The gas industry (remember, lighting back then was done with natural gas) thought they were going to die.  So, they did what any free market company does … they thought they might as well invest in Edison’s company.  After all, at the time, the idea of using natural gas to make electricity wasn’t feasible.

Edison believed local electricity production and use should be direct current.  All of us in the utility industry know the legendary battles between his ideas and those of Tesla and Westinghouse.  Well, history teaches us that Edison lost the battle and we now have alternating current.

But, I want you to see how we may now have the perfect storm of ideas to bring Edison’s dream to reality.  Think about this for a bit with me.  Watch the difference between trying to accommodate the trends in energy technology today and how they get easier if we include a DC grid in with our current alternating current paradigm.

Solar and wind have grown significantly.  They may have received subsidies that are no longer “cost effective” but they have captured the attention and enthusiasm of the average American.  As this din of energy technology enthusiasm grows louder and louder and this just makes many incumbent energy providers cringe.  They were OK with solar and wind when they were small, but now want to change the rules given they are not so small.  Who pays for the transmission upgrades necessary to accommodate these new sources? Who pays for the balancing energy it is going to take to leave these resources in a must run status?  All of this puts upward pressure on electric rates.  Who pays?

Jim Rogers has recently said the traditional electric utility model is dead and that the future is a blank sheet of paper.  Well, I would like to suggest that there are three things the incumbents can do: watch things happen, wonder what happened or make things happen.  Perhaps it is time to make some things happen.

Think about all these new energy efficient technologies we now have. Light emitting diodes (LEDs) … DC.  Solar and wind … DC.  Electric vehicles … DC.   Variable speed drives … best and cheapest done with DC.  Electricity storage needs … best done with DC.  Distributed generation interconnection … best and cheapest when done with DC.  Microgrids and power reliability … best done with DC. The list goes on.

I am not suggesting we are going to do away with our transmission and distribution systems.  I am only suggesting that the “last mile of wire” might include … wait for it … think about it … DC.  And, I would suggest that the incumbent electric utilities start to think about how they can include DC in the last mile of wire to homes and businesses.

My boat has AC and DC circuits and an inverted to power the AC when the generator is off.  Power reliability is not a concern.  Why wouldn’t homes of the future have the same?  Wouldn’t this also make demand response at the home level incredibly easy to implement?

Transitioning to a Brighter Future

Obviously this is a very big idea.  There are lots of reasons it will not catch on right away.  There are a host of obstacles that preclude it from being a quick fix.  But, it clearly has legs.  Therefore, it deserves a demonstration project.

Yes, the devil is in the details.  Yes, this requires engineering.  But, some customers will pay for it.  Start there.  They will pay the freight.

Why not offer one to a big box retailer … say Walmart?  Why not try a model residential community that is all DC.  High end homeowners are looking for a way to be part of something truly new and exciting.  These are the same people who buy the EVs.

Who is going to be first here?  Who wants to go down in the history books?

I end with one more historic quote: “Things may come to those who wait … but only those things left by those who hustle!” … Abraham Lincoln

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