In theory, the greater result of decentralization should be lower prices on electricity and competition in the market place. However, as we have seen, this isn’t always the case. Take for example California and their still high prices on electricity in a post decentralized market. The choices consumers were promised weren’t really choices at all and competition didn’t happen automatically as FERC believed it would. However, I don’t believe all is lost for the decentralization of power generation. Getting the kinks of the system worked out, enforcing competition, ensuring real choice to consumers is the first step in the process. Once the economic side of things has been worked out, I see a return to smaller scale community electricity generation. Renewable energy sources that work for the landscape and resources available to a specific community could become the main source of electricity for a community that is willing to put in the effort. If not, then the use of more traditional electricity sources could still be available.
The business opportunity in this is the consultation and installation of renewable energy power generation sources. These sources could be small level wind farms or solar PV. It would be likely out of the range of consumer knowledge to plan and implement a community wide grid based on renewable energy. This business could offer an initial consultation service to help communities decide which source of power generation is best suited to them and then help them go about putting the system into place.
I’ve always been interested in helping this country move into a more sustainable way of doing things in terms of electricity generation. My relatively small town has recently seen a surge in PV installations and we’re all really excited about it. I would love to be a part of taking that movement and helping it grow into a larger, community lead push towards sustainable and self-sufficient electricity generation.
The Failure of Electricity Generation: History, Status, and Needed Reforms, Tyson Slocum
Hi,
Great post. I agree that deregulation has proven to be a double-edged sword. From what I understood in my research for this lesson, the increase in electricity rates occurred because the price controls were lifted on previously regulated suppliers, thereby allowing them to charge what they wanted. So hypothetically, when their competition can only equitably charge $.20 kWh, all the provider has to do is charge a little less than that to keep their customers. If the old price controls held their rate at $.12 kWh, then those customers can probably expect a price increase. Therefore, low prices are going to come back only once the competition is able to provide power at lower rates, which may take time. From what I saw in my research, deregulated states have among the highest electricity rates in the nation.
All the best!
Ken
my post: http://engr312.dutton.psu.edu/2014/11/07/opportunities-in-deregulation/
Hi Laura,
I targeted consulting and renewable install as a business idea I would have interest in too. I lived in Burlington, Vermont this summer for an internship. While there, I got to know a company that put 4 wind turbines on a nearby mountain, which supply over 8% of Burlington’s energy. It was a big job, but it’s amazing that one local source can do that much!
– Marielle