...At the Bloomberg New Energy Finance Summit in New York City, a German utility questioned how long customers would continue to pay by the kilowatt-hour for electricity. "I think we'll see something similar to...arlier this year, Richard Kauffman, New York's new chairman of energy policy and finance, also discussed what he calls the "Aunt Millie" effect, where fewer people are absorbing the cost of the entire network. He noted that in at least a dozen states, it's cheaper for large commercial customers to use combined heat and power (CHP) than to pay their utility.
Jon Wellinghoff, chairman of the Federal Energy Regulatory Commission, echoed Kauffman's sentiments at the BNEF Summit on Tuesday afternoon. "We'll see natural gas in the form of CHP as the next distributed generation," he said. The increase in distributed generation, whether solar or CHP, means that "utilities won't be able to recovered fixed costs," he said. He acknowledged that larger fixed fees were certainly in the future.
It is yet to be seen how countries and states will redefine the value of delivering electricity with an increasingly distributed generation system while maintaining reliability. Wellinghoff doesn't think they're conflicting issues. He worries far more about a coordinated physical attack than a cyber-attack on the electrical grid, adding that "a more distributed system is much more resilient."
Read more of The End of Paying For Electricity By The Kilowatt-Hour by Katherine Tweed:
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