#powersystemdiversity

by Art Olson

I was struck by the title of this conference kicking off this month – in Maui, of all places (Hey, it’s tough duty but somebody has to do it, right?).  The conference features “…energy policy leaders and businesses [talking] openly and frankly about the country’s rapidly changing energy landscape…” 

How true!

Energy industry “talking heads” have long foretold the emergence of big data, the role of new technologies, declining demands brought about by slower population growth and energy efficiency, and lower fuel prices brought about by abundance of shale gas supplies.  While some of these predictions remain only predictions, it’s true that others have achieved varied levels of accuracy. 

Then came the winter of 2013-2014.

NOAA’s Accumulated Winter Season Severity Index — which some have dubbed the winter “misery index” — confirms this season has ranged from severe to extreme in almost every location.  The arctic outbreak produced days when more than 50 major cities recorded record lows for the day; some, including Atlanta and Indianapolis, recorded their lowest temperatures since the mid-1990s.

It remains to be seen what effect last winter’s record heating demand for natural gas will have on long term prices.  Natural gas storage reservoirs are at all-time lows and will require near-record injection levels this summer to bring storage volumes anywhere near what they were last fall.  This will likely provide continued upward pressure on gas prices, even as environmental concerns continue to make the future prospects for shale gas uncertain. 

So much for the continued record-low gas prices predicted?

Energy efficiency and demand response are being credited for helping keep the lights on and the gas flowing to where it’s needed as electric and gas utilities suffered equipment failures and supply bottlenecks caused by extreme weather.  Electric and gas utilities and transmission operators from New England to Texas were able to meet customer needs even as system demands far exceeded projections. 

To those of us in the industry, it’s rewarding to see energy efficiency and demand response being widely recognized for having helped customers manage higher energy costs caused by weather extremes, and bridge the gap when the chips were down, right?

Think again. 

Even as customers struggle to recover from last winter’s high energy bills, at least two states – Ohio and Indiana – are considering legislation that would crush successful energy efficiency initiatives that have been widely recognized for their aggressive energy saving goals and promoting emerging energy efficient technologies.

Perhaps William Somerset Maugham said it best: “There is only one thing about which I am certain, and this is that there is very little about which one can be certain.”