Last week’s keynote at the Electric Power conference in Atlanta was delivered by some powerful people. CEOs of major utilities discussed their businesses and plans for the future. The power generation business is a conservative one; it really has no choice in the matter. You won’t hear people in your office say, “gee, that light sure looks bright today” but they will complain in an instant if the light doesn’t come on at all. Reliability and availability are what customers demand first and foremost. Environmental innovations are secondary.
That conservatism is an obstacle for a small company, like the one I work for, that develops an innovative sensor that can help coal-fired plants run cleaner and more efficiently. Power utilities are less interested in improvements to their plants if there is any risk that power could be cut off. Irritating as that sounds, they’re really just trying to make you happy. They’re keeping the lights on.
Regulations drive power decisions in many ways. New plants are being built all the time to meet the demands of a growing population, but how those plants generate power and how cleanly they do so is decided by weighing the costs and benefits of each choice. Are there kick-backs for choosing green power? What is the cost per megawatt to the consumer? How long before this billion dollar investment gets paid off? Will rules that justified this choice, change before it’s even paid off? Are there regulatory hurdles to jump through and how much will it cost to meet these requirements? Company leaders understand all too well the impact of rising costs to their consumers and their decisions carefully consider all of these factors.
One disappointing theme from the talks, however, was the sense of almost powerlessness with respect to government regulations. Each CEO lamented the costs and unpredictability of government regulations. Justification for each of their decisions was repeated over and over: it’s all economics. Regulations make things more or less feasible. But are these CEOs really held hostage by government regulations or are they dodging their responsibility and blaming someone else?
I don’t believe that these folks are using regulations as an excuse, but I also had to imagine that, unlike us, the leaders of these companies don’t have to passively accept whatever is handed down. If a new law will cause a significant increase in electricity rates to the 5 million citizens of Atlanta, the CEO picks up the phone and calls his congressman. That congressman is likely to answer too! After all, it might be the CEO inviting him over for dinner, or planning their talk during the next golf game. This isn’t just some blogger complaining about the cost of electricity, it’s the guy who makes billion dollar decisions that effect millions of citizens and constituents.
Like I said, these are powerful people. I hope they use that influence wisely.