Antitrust Law Daily Wrap Up, ANTITRUST NEWS: AAI roundtable discusses competition challenges facing electricity industry, (Jul 10, 2015)

By Greg Hammond, J.D.

The American Antitrust Institute’s 15th annual Energy Roundtable, “Disruptive Electricity Technologies: Challenges for Competition,” revealed a number of concerns facing the electricity industry today and in the foreseeable future, according to the Summary of Proceedings released on July 8 by the organization. Panelists discussed current issues, the future course of technological change, and competition regulation and oversight.

There are four key issues currently facing the electricity industry, according to David Mohre, Executive Director of the Energy and Power Division of the National Rural Electric Cooperative Association: (1) changing Environmental Protection Agency (EPA) rules on carbon dioxide (CO2) under Section 111(d) of the Clean Air Act; (2) growing production capacity in the natural gas markets; (3) industry-wide decreases in load growth; and (4) the development of disruptive technologies that facilitate distributed generation, such as solar.

The morning panel discussed the future course of technological change, finding that micro grids, smart meters, distributed generation (DG), and transmission owners are all areas of concern. In addition, the possibility of significant changes in energy storage, changes in transmission, and electric vehicles could upend the traditional utility model, presenting additional issues further down the road.

The panel believes that, moving forward, policymakers should work on three key areas where consumers could be negatively affected: (1) equity and fairness issues being raised by changes to net energy, and likely short-term cost increases; (2) data security and privacy issues, as energy data becomes more valuable; and (3) challenges surrounding the clarification of who has oversight and jurisdiction over new products and services used in conjunction with DG.

Keynote speaker Heather Bailey, Executive Director of Energy Strategy and Electric Utility Development for the City of Boulder Energy Future, discussed the development of a municipal power utility in Boulder, Colorado. While the city has a local goal of achieving the goals set forth in the Kyoto 2050 agreement, Boulder residents are focused on increased access to DG, improved demand-side management, expanded low-carbon solutions, and better utilization of renewable resources. These competing goals, according to Bailey, cannot be aligned in a cost-effective way.

Bailey noted that there are various policy reforms that could help move the country to more competitive, effective energy markets, such as alternative energy efficiency management, community choice aggregation, peer-to-peer energy sharing, removal of the 120 percent cap on solar generation, state carbon taxes, time of use rates, and usage of performance-based rates and grid modernization.

The afternoon panels concentrated on whether the challenges presented by disruptive technologies require new modes of regulatory and antitrust oversight, or whether—while the technologies themselves are new—the legal response strategies are merely being recycled from the era of deregulation. There was significant agreement that, at least on the wholesale side, the changes were “old wine in a new bottle,” and the discussion largely focused on lessons from history and possible new concerns for the future.

News: Antitrust