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Duke official urges NARUC to view renewables as 'niche' sources, not a solution

Regulators and utilities need to strive to honor the balance between affordable, reliable and clean electricity generation, Turner said, commenting, "It doesn't matter how clean it is if it's not affordable or reliable." However, he added that there are going to be voices in the debate over future power sources that care about only one prong and do not have to worry about that balance.

Utility regulators and executives should view renewables as "niche" sources of electricity rather than as a reliable solution to the nation's future energy needs, a Duke Energy Corp. executive told participants at the National Association of Regulatory Utility Commissioners meeting in Sacramento, Calif.

"Wind and solar resources provide a valuable niche role, but they are not the solution," Jim Turner, group executive of Duke Energy and president and COO of its U.S. franchised electric and gas business, said July 19. "I think we need to honestly acknowledge that as we think about the investments that we're going to be making" in the coming decades to repower America, he said, adding, "You've got to have your nuclear plants and your coal plants and your gas plants on the front lines."

Regulators and utilities need to strive to honor the balance between affordable, reliable and clean electricity generation, Turner said, commenting, "It doesn't matter how clean it is if it's not affordable or reliable." However, he added that there are going to be voices in the debate over future power sources that care about only one prong and do not have to worry about that balance.

Turner... more [truncated due to possible copyright]  

Utility regulators and executives should view renewables as "niche" sources of electricity rather than as a reliable solution to the nation's future energy needs, a Duke Energy Corp. executive told participants at the National Association of Regulatory Utility Commissioners meeting in Sacramento, Calif.

"Wind and solar resources provide a valuable niche role, but they are not the solution," Jim Turner, group executive of Duke Energy and president and COO of its U.S. franchised electric and gas business, said July 19. "I think we need to honestly acknowledge that as we think about the investments that we're going to be making" in the coming decades to repower America, he said, adding, "You've got to have your nuclear plants and your coal plants and your gas plants on the front lines."

Regulators and utilities need to strive to honor the balance between affordable, reliable and clean electricity generation, Turner said, commenting, "It doesn't matter how clean it is if it's not affordable or reliable." However, he added that there are going to be voices in the debate over future power sources that care about only one prong and do not have to worry about that balance.

Turner noted that, in America, prices historically have been a result of market activity where, in the former Soviet Union, prices were an input set by the government. Yet today, some electric utility CEOs have been arguing that the price of electricity needs to be pushed up in the United States to make people use less electricity and, in turn, reduce carbon dioxide emissions. "In my humble opinion, that is nonsense," he said, adding that Americans ought to refuse to think of electricity pricing as a tool of social engineering.

In considering proposed utility investments, Turner said state regulators will need "the four Cs." First, he said, is capital market acumen, or understanding how capital flows from the markets to the company for the investment. Second is courage, which sometimes includes the courage to approve a rate increase and other times to tell a utility executive he's full of it, he quipped. The third C is creativity, and the fourth, common sense.

Weighing in on the controversy over the costs and benefits of installing smart meters, Turner said, "Regulators are justifiably concerned about ... whether there's really enough 'there' there. On the other side, I think it's incumbent upon us as utilities ... to demonstrate what that value is."

While proposing to rip out five-year old meters and replace them with new meters might be a hard sell for a company, Turner noted that, in some cases, installing smart meters can be a "no-brainer." For example, Duke has an ambitious smart grid program in Ohio, where 40- and 50-year-old meters are still sitting in people's basements. "We have a key room in Cincinnati with 65,000 keys to customers' homes," he said.

When customers don't want the meter readers to come into their homes, the company has to send them an estimated bill. The process of truing up those estimated reads after three, four or five months, or even a year, "is not a fun process," Turner said. "So there are places where it's a no-brainer to start this process of changing that infrastructure. But I think in other places, we have more work to do to demonstrate what those benefits look like, and I think that's exactly what the Maryland commission is working through right now."


Source: http://www.snl.com/Interact...

JUL 19 2010
http://www.windaction.org/posts/27401-duke-official-urges-naruc-to-view-renewables-as-niche-sources-not-a-solution
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