At Ackerman Regulatory Strategies, I provide advice to entities that deal with the electric and natural gas industries on matters of grid decarbonization, planning, or regulatory transitions. I provide help in navigating issues that must be communicated to, or adopted by, state and federal industry regulators and legislators.
The National Academy of Engineering called the U.S. Electric Grid the “Top Engineering Feat of the 20th Century.” Safe, reliable, affordable and universally available electricity has been a foundation of our nation’s energy landscape for the last century. The “grid” has become so ubiquitous and reliable that it is taken for granted by most Americans.
Technological advances in drilling have revolutionized natural gas production in the United States. The United States accounts for one-tenth of the world’s technically recoverable natural gas resources. Use of natural gas as a generation resource has lowered U.S. carbon dioxide emissions from generation, and the flexibility of natural gas generation enables the grid to accommodate intermittent, renewable resources. In fact, natural gas is a necessary bridge to eventual decarbonization of the power grid. Natural gas is also used directly by consumers and industry, and its use is expanding as a low-emission alternative to fuel vehicle fleets.
The generation, transmission and distribution of electricity is so fundamental to the functioning of our economy, it is impossible to imagine our society without it. Accordingly, the electric grid is heavily regulated at the state and federal levels. The goals of economic regulation are to ensure adequate and reliable service at a reasonable cost to consumers — commensurate with the need to invest in infrastructure to provide service.
Even when market mechanisms are introduced to aspects of the electricity grid, they are not laissez faire mechanisms. Competition for its own sake is not a goal for the electricity industry. Competition is a tool to help achieve the societal goal of universally available energy service.
A vast energy infrastructure is behind providing comforts and essential services such as a hot shower in the morning, a cold beer at night, and a fully charged smartphone in your hand. To keep that infrastructure modern, clean, reliable and safe, continued capital investment in necessary. This includes generation facilities, physical transmission and distribution lines and wires, and technologies that provide: energy reliability, flexibility and consumer services. Infrastructure also is required for natural gas pipelines and distribution systems. They all need to be planned for, sited and built to meet consumer demand.
One of the biggest challenges facing the electric industry today is climate change. Because the electric grid is a big contributor of greenhouse gasses (mostly carbon dioxide, which contributes to climate change), society needs to pursue sensible policies that will decarbonize the electricity grid. But, decarbonization must also happen in a way that preserves society’s need for energy.
Susan Ackerman, Attorney, has more than 30 years of hands-on policy, executive, managerial and legal experience in the regulated energy sector.