Utility plans exclude conservation:
[NC's] largest utilities say they'll need to spend more than $10 billion on three new nuclear reactors and two coal-burning plants to meet projected electricity demand within a decade.
But environmental groups say the utilities' forecasts leave out two key factors: conservation and alternative energy sources. Adding those to the mix could delay the need for new plants, they say.
Electric utilities are natural monopolies -- business firms that must operate on a massive scale in order to bring costs down so that the product can be priced affordably. The natural inclination of monopolies is to raise prices so that profit is maximized (e.g., movie popcorn) but electric utilities are heavily regulated in return for government's gift of monopoly status.
So, the regulators can tell the natural monopolies to do whatever they want. Conservation is a good idea, for a variety of reasons. Electric utilties will resist the notion because no firm wants demand for their product to fall.
Last year, the Georgia Utilities Commission required Georgia Power to offer four programs to help residential customers save energy. In January, the California Public Utilities Commission created a 10-year solar initiative to help bring down the costs of solar electricity for customers.
The latest stop for the debate is North Carolina. At the first of three planned public hearings this month and next, dozens of people urged the state Utilities Commission to require power companies to take into account conservation measures.
In lieu of my attendance at the next public hearing, I don't want to create a mob scene, papparazzi and all that, let me declare, here, today, that I am in favor of the regulators mandating that the natural monopolies encourage their customers to reduce the demand for the natural monopolies' product:
Conserving electricity not only helps people cut power bills but also reduces pollution from power plants. Concerns that coal plants contribute to greenhouse gases and higher costs of fuel have driven the resurgence in conservation programs.
Note: I'm down with all of this quote except the part about coal plants leading to higher costs of fuel. Say what?
