Change Agent: Paul Soglin, Mayor of Madison, Wis.
Leaders of electric utilities and the energy sector say they are eager to learn more about how the Trump administration’s $200 billion infrastructure proposals, now in draft form, will help the nation plug into a modern, digital, distributed, more secure and renewable power grid.
The energy world received a major infusion of $4.5 billion for its smart grid nine years ago under President Obama’s economic stimulus plan and is eager for comparable game change investments ahead.
Many are heartened that rural America will be targeted for major investments.
Electric utility executives and their industry leaders are eager to learn more details about the Trump administration $1 trillion infrastructure push, to be seeded with $200 billion in federal funds with much of the balance provided by investors in the private sector.
Drafts of the plan surfaced in recent days, and Washington insiders say a release of the major initiative may be imminent. Many say that they believe it will be designed to draw sweeping bipartisan support if the entire effort is not deflected by a looming immigration reform battle.
“Infrastructure is a top priority of the electric power industry. Once the administration’s infrastructure plan is available, we’ll review it,” said Kristin Rudman, spokesman for the Edison Electric Institute, which represents utilities providing electric power to 220 million Americans.
A major thrust of the president’s proposal is aimed at rural America, which for decades has struggled to land many of the high-tech growth initiatives of larger, coastal urban centers.
Sue Kelly, American Public Power Association president and CEO, wants to learn more about the rural development that may be in the wings. Her association has 2,000 public power utilities serving 49 million Americans. A top concern for her is whether a massive infusion of capital into rural America’s power grid will be accompanied by a push to privatize assets now controlled by rural citizens and their elected representatives.
“There are far too many questions at this early stage for us to reasonably assess what this proposal would mean for public power,” Kelly said. “However, we hope that any effort to encourage public-private partnerships does not create artificial incentives to privatize electric utility infrastructure or the Power Marketing Administrations themselves — as public power customers would have to ultimately pay the price.”
“For decades, public power utilities across the country have funded electricity infrastructure investments — and helped sustain a strong economy — by issuing municipal bonds,” she said. “These utilities have remained accountable to their customer-owners and kept electricity reliable and affordable.”
“Whether its conventional funding for roads or public transportation, we are falling dangerously behind – from a safety standpoint and an economic standpoint,” the mayor reiterates.
Large and small electric cooperatives are pleased that the infrastructure program will cover a wide variety of efforts and will not leave America’s hinterlands behind.
Jim Matheson, chief executive officer of the National Rural Electric Cooperative Association, representing cooperatives serving 42 million Americans, said, “The success of rural America is critical to the wellbeing of our entire nation.”
“As the president puts the finishing touches on his infrastructure proposal, it’s important that the package focus on more than roads and bridges,” Matheson said. “A vibrant 21st century rural economy depends on expanded high speed internet access and grid modernization efforts. We look forward to supporting an infrastructure bill that addresses the needs of rural families and communities.”
Meanwhile, many in the power sector are thrilled that the Trump plan will incentivize research and development of new technologies, and spur their deployment. Electric utilities have been notorious for spending a smaller fraction of their revenues on R&D than other major sectors of the economy.
One growth area for electricity may well be energy storage – which would speed the decentralization of electric power generating assets and spur wider deployment of microgrids and clean solar and wind powered generation.
Kelly Speakes-Backman, chief executive officer of the Energy Storage Association, told me, “ESA believes that energy infrastructure is an important element of any infrastructure plan, and we are encouraged by initial reports that the administration’s plan includes it.”
“States, municipalities, and rural cooperatives are starting to use energy storage to extend the life of their electric grid infrastructure, as well as enhance the resilience and integration of critical infrastructures like water, communications, and transportation,” Speakes-Backman said. “We look forward to discussions with Congress, the Administration, and power sector stakeholders about how a federal bill can drive energy infrastructure innovation that maximizes benefits to taxpayers.”
Meanwhile, Amory Lovins, a thought leader on energy sector matters who meets regularly with electric utility leaders and energy policy makers in the United States and around the world, said that there are too many unknowns in the Trump plan at this point to know precisely which kinds of energy resource development it would encourage.
Lovins, co-founder and chief scientist of the Rocky Mountain Institute, was the lead key note speaker in November at the Energy Times’ Empowering Customers & Cities executive energy conference in Chicago, where he outlined his views that much of the energy infrastructure changes that are needed can more than pay for themselves by the energy savings they will generate.
ECC Conference: https://energyevents.penton.com/empowering2017/
“The leaked infrastructure-policy draft is too sketchy and vague to comment on. For example, it’s impossible to tell whether ‘Transformative Projects Program’ would be used to bail out Small Modular Reactors that are ‘unable to secure financing through private sector’ not ‘due to the uniqueness of the program’ but because they have no prospect of competing in the marketplace,” Lovins said.
“Until it’s clear what support is to be offered to what kinds of projects on what terms, there’s little to say, except that the program is unlikely to succeed if it displays the same limited grasp of energy market realities that Secretary Perry’s NOPR recently did,” Lovins said.
He is referring to Energy Secretary Rick Perry’s recent unsuccessful attempt to get the U.S. Federal Energy Regulatory Commission to embrace policies that would resuscitate financially ailing coal-fired and nuclear generation installations in the United States.