Monday, August 15, 2016

What does the Tesla / Solar City merger really mean for renewable energy?

Well, the dust has settled a bit after the initial excitement regarding Tesla's $2,600,000,000 purchase of Solar City.  (Somehow, writing it out with all 8 zeroes gives a better picture of the money involved.  As Senator Everett Dirksen never actually said, "A billion here and a billion there, and pretty soon you're talking about real money.")

Of course, there has been significant kerfluffle about the fact that Elon Musk is founder and general grand poo-bah of both companies.  However, it seems that settled down pretty quickly, primarily because Tesla's shareholders are still sitting pretty.

Besides, it's Elon-freakin-Musk.  What could go wrong? (insert smirk here)

So, what does it all really mean for renewable energy?  Not much.

Why? I'll tell you in two words:

Friday, April 29, 2016

20/20 Hindsight.

With the recent news regarding AEP CEO Nick Akins comments regarding electric restructuring and guaranteed returns, I thought it might be worthwhile to update this blog entry from last April.  As I look at it, I'm not sure that I'd actually change anything I said back then, so here we go with a bit of a rerun.  My updates from here on out are in italics.  Let's see if anyone is listening...

Well, Ohio's deregulation of generation got dealt a kick in the teeth by FERC back in April, when FERC disallowed Ohio's guaranteed returns on generating units plan for AEP and First Energy.  Now Nick Akins is talking about selling off plants (if they can in today's market) and going to the legislature to get restructuring changed.  Back when this post first came out, I had a suggestion for how Ohio's restructuring could have been done in a way that would have avoided the whole question of confiscation, and would (probably) have been OKed at FERC.  (I say probably because I have learned never to assume any Federal Agency decision.)

As I said back in April "Shoulda seen this coming."

Since I was involved pretty deeply in the initial unbundling of electric generation in Ohio, working with then-Ohio PUC Chairman Craig Glazer and various legislators, I feel kinda responsible for this.

The problem at hand is that these generating plants were built under one set of economic rules, and deregulation of generation changes the rules of the game.

The plants at issue were built under rules that said that the Utility could earn a guaranteed return on their undepreciated investment in facilities that are "used-and-useful" in the provision of service.

Had those plants been built under a competitive environment, they would have been built differently, possibly in different places, or using different technologies, and the companies building them would have accepted the inherent risks, and would have hoped to receive a return consistent with accepting those risks.

The fly in the ointment is the constitutional issue of confiscation.  By forcing companies to move "guaranteed return" equipment into a competitive market's risk/reward structure, there was a likelihood of an outcome that would have been deemed confiscatory.

There is also the possibility of companies earning far greater returns under competition than they would under regulation, at least for a time. (Theoretically, massive returns bring competitors into a market, moderating those returns.)  However, massive returns lead to customers with flaming torches and pitchforks marching on the legislature and/or PUC, because you've changed the rules of the game for customers, too.

So you need to bring competitors in, without inflating the available returns. You end up priming the market with an arrangement requiring utilities to sell power to their competitors at a discount from their retail rates, so that those competitors can mark it up a smidgen and make a profit from doing nothing but reselling.

The whole thing became a huge morass of hedges, boundaries and rules, and was open for gamesmanship.

We could have done it better, and we still could.

As the title says, hindsight is 20/20.  If I had known then what I know now, here's what I would have suggested be done.  (I might not have been listened to, but that's another issue.)

I think we could still do it, though it would piss off some of the "competitive generation suppliers" (many of whom don't actually provide generation, they just do arbitrage).

  1. Pick a date.  Any date.  Call it Date X.  
  2. All Generation with plans submitted to the Power Siting Board after Date X will be competitive generation, and not subject to either guaranteed or capped returns.  It is deregulated.
  3. All Generation in operation as of Date X will continue as fully regulated generation until its depreciated original cost is equivalent, on a $/MW basis, with generation currently being proposed.  At that point, it becomes deregulated.
  4. Any Generation in an intermediate state (between "plans submitted" and "in operation") on Date X will be placed into one or the other group based on an evidentiary hearing before the PUC, on whether that plant would have been undertaken in a competitive market, and whether a reasonable competitor would proceed under the new rules.  A plant that would not be built under competition, but was needed, would go forward as a regulated plant.
  5. A cost recovery mechanism would be established for those plants that are abandoned by regulated utilities as a direct result of the rules change and the decision made in (4).
Why do I think this would work?
  • Yes, the date is arbitrary, but right now there aren't a lot of generators being built that the exact date would affect and would fall under (5).  
  • The rules for making a decision to build or operate would be known far enough in advance of making the decision that confiscation would not be a real issue.
  • Each generating station would operate under a set of rules that were in place when it was built.
  • The transition to a fully competitive marketplace for generation would be gradual, and natural.
The one change that I might make to this if I were writing it anew today would be to change "Date X" to the January, 2001, the date the original Ohio restructuring legislation took effect.  The entire marketplace was effectively on notice at that point that the rules had changed.

I invite your thoughts, speculation, and even catcalls.  Just be civil about it.

Monday, March 14, 2016

Fee Fi Fo Fum, do we smell the blood of traditional cell carreirs?

Well, I did it.  I geeked out in  major way and signed up for Google's Project Fi.

For those who aren't familiar with it, Fi is Google's foray into cell phone services.  This goes beyond a cell phone operating system, to a cell phone network of sorts.  Here's how it works:
  • As the name implies, Fi uses Wi-Fi for everything wherever and whenever it can. 
  • However, if there's no Wi-Fi (or it's not strong enough) it also will hop onto either Sprint's or T-Mobile's cellular network, depending on who has a stronger signal at the moment.
  • Mid-call, it will swap between them as needed (though some have reported a lag in the transfer, but that seems no worse than what I've experienced going between towers with a single carrier, so I'm not too troubled, yet.)
  • Data is $10/Gig, but you get a refund for unused data every month.
  • International data in 120 countries is the same price as data in the US.
  • International calling is $0.20/minute.
  • Unlimited talk and text.
  • Using your phone as a mobile hotspot is included.
Drawbacks?  Limitations?  Sure:
  • It only works with a Nexus 6, 5x or 6P, because those are the only phones on the market that have all the radios for all the different carriers involved (Sprint and T-Mobile use different platforms).  The upside of this is that if you leave Fi, you can take your phone to any other carrier, no problem.
  • There is a funny interaction between Google Voice and Fi, where Fi takes over for Voice.  I'm not a Google Voice customer, so I haven't dug into this.
I'll update this with other thoughts and comments as I get some experience with it. 

OK, here's the update: Fi is amazing.  Not only is the data plan reasonable, but you get amazing control of data usage.  Admittedly, some of this is phone features rather than service features, but remember that these two phones were designed and manufactured with Fi in mind, and purchased through Google, so the phone OS could have been manipulated just like any other carrier does.
  • Don't want any app to use data in the background?  Turn background data off.
  • Want to use a VPN/data compression service like Opera Max?  Go for it.  It will be seamless.  (I had terrible trouble doing this with other carriers.)
My soon-to-be-17-year-old daughter (who is the major bandwidth consumer in our home, 4-5Gig a month on our old carrier) just barely eeeked over the 1 Gig/month we had set up, and that was before she learned how to manage her data.  This month, she'll likely not exceed 500MB. We paid the same rate per MB for the overage as we would have if we had paid in advance.

All in all, better service at literally half the cost per month.


Wednesday, March 9, 2016

Wouldn't it be cool if…

As a teenager, I played a game with my friends called “Wouldn't it be cool if...” where one of us would pitch an idea for something oddball that didn't exist, and we would bat it around for a while, thinking of as many other cool things that we could do, if we had the first thing. Each of us tried to top the others' cool idea, without breaking the string of needing the first idea in order to make it happen.

Yes, I had very geeky friends. Of course, if we had patented any of the stuff we came up with, we'd all be stupidly wealthy now…

Lately, I've been playing that game again. 

Wednesday, July 8, 2015

The invisible infrastructure

A recent survey published by Arquiva and YouGov has a few interesting observations about what is happening in the UK “Smart Cities” movement. I haven't yet seen the study itself, but the press release and associated info-graphic make some interesting points. 

Friday, June 5, 2015

ADS TownHall Covers the Good, the Bad, and the Ugly

This entry also appears as a guest blog at Smart Grid Library's Blog

Last week I attended the Association for Demand Response & Smart Grid (ADS) TownHall meeting. Since this was my first time at that particular event, a few things struck me as noteworthy:

Monday, April 27, 2015

The Animal Farm of Things

(This article originally appeared in the Smart Grid Library blog on March 27, 2015)
I'm prone to literary and cinematic allusions, sometimes those allusions are obscure, or at odd angles to the main topic, so for those of you who are confused already, bear with me.

I have been immersed increasingly in the Internet of Things discussion, and trying to understand how it relates to Smart Grid and specifically Demand Response. Since Demand Response requires information connectivity, it appears, on the surface at least, as though there is a natural convergence there. Appearances can be deceiving.