November 11, 2010 § Leave a comment
There is no better way to describe or explain the evolution of the electricity industry than by comparing it to what happened in more progressive industries. In a series of blog entries I will try to simplify the electricity industry using examples that help my own understanding. Hope it helps yours too…
Deregulation: Remember when it was just ‘Ma Bell’ who provided phones to those who could afford it? And remember when the 1996 telecommunications act came in and more people could then provide you your telephone service for cheaper? I’m sure you remember (if you’re above a certain age anyway). Well, even back then other phone providers could not afford to build the phone lines and cables than ran across the country. So they ‘paid a toll’ for access to those wires and cables from Ma Bell.
Now think 2007 instead of 1997 and replace Ma Bell with Comed. Think Retail electricity Act instead of the Telecommunications Act of 1996 and replace the ‘other companies’ with Nordic Energy, Constellation etc and you have the exact same situation.
As is the case with anything new, problems came with the changes in regulations but it also brought opportunity for the customer to have more of a voice. All you have to look at is your cell phone (and even that obnoxious person on the train) and see the benefit of those changes. Expect the same in the electricity industry.
Real Time Pricing: again I’ll turn to the telecoms industry for this one.
If you have a phone contract with Verizon, US Cellular or any of the many providers out there then you probably have a contract that has you paying for calls at rates that dependent on the time of day or the day of the week/weekend. Some providers offer free calls on weekends, free calls after 6pm, and peak rates during the day etc. The rate and the time you spent yapping away with whomever is itemized on that bill you receive at the end of the month (or if you’re like us you now check your bill online and prevent save some trees). Should you have a problem with how much you’ve been charged for some of the phone calls you can customer service and get things rectified.
Now replace Verizon and US cellular with (let’s use non Illinois electricity companies) Duke Energy and PG & E. And replace call minutes with electricity usage minutes. Keep the time of day or weekend pricing and you have Real Time Pricing in the electricity industry. Expect to get more information on your electricity usage
Does this make it any easier to understand two of the features of the current electricity market? Let us know.
More to come in a few days
|© Daniel Steger (SuperContributor),|
November 1, 2010 § Leave a comment
To state that the ‘experts’ make it hard for us to understand this whole ‘smart grid’ business would be like saying the Chicago Bears have stopped surprising us and are starting to lose i.e. they are just doing as they know how.
To rectify this issue, with the experts not the Bears, we’ll be running a series to simplify the whole electricity deregulation, smart grid and consumer rights discussion. In terms that will make it easier for us to all start to see through the complications and become ‘experts’ in our own right. I’ll take terms, define them and relate them to more common analogs to aid understanding. I’ll be starting off in a few days with deregulation (the only reason why Power2Switch even exists), demand response, meter data management and the ‘smart grid’.
For today I’ll be referencing a post from the WSJ which talks about microlending (which means exactly what it’s called) and how Kiva, a company known for helping entrepreneurs in emerging market countries receive microloans, is bringing its operations to assist US small businesses in the Gulf coast. Kiva is partnering with Accion Texas Louisiana, the third of such partnerships, in an attempt to increase the draw of their service for small businesses in the US (US businesses make up just 1% of the over 400,000 small business listed in the Kiva directory).
The article can be found here http://bit.ly/b0BLF5
The partnership is a welcome initiative and a much needed alternative funding mechanism for the thousands of small businesses that are struggling to get money from traditional bank loans and credit extensions.