Four-fifths of energy utility executives in a recent survey said they were dissatisfied with the first year of the Obama administration, citing a lack of tangible and actionable policy and legislation.
Specific concerns included a lack of movement on carbon dioxide legislation and action, regulations that result in higher costs without addressing the issue of atmospheric carbon, and “overly idealistic” policies that don’t consider overall economic impact.
“Few utility executives consider the current solutions as satisfactory either in scale or feasibility,” said John Christens, vice president of Cap gemini, a technology and consulting firm that conducted the survey together with Platts.
The survey of more than a hundred executives at U.S. and Canadian electric and natural gas utilities was the fourth annual such survey. Conducted in March, the survey sought to identify and prioritize industry concerns and gauge industry perceptions of the new Obama administration.
The utility executives cited regulation (71%) and the environment (68%) as the top two challenges facing the industry. With respect to regulation, the top concerns were emissions and carbon regulation, lack of adequate national energy policy and uncertainty about transmission regulation.
With regard to the environment, the top concerns were building generation transmission capabilities to support renewable energy sources and increasing energy efficiency and customer conservation programs.
Other main challenges cited by the executives were incorporating technology, including automated metering infrastructure, smart grid technology and smart meters; financial concerns such as cost recovery, access to capital and maintaining liquidity; and end user issues, such as maintaining customer satisfaction, providing consumer education about the cost of green energy, and end users’ expectations for continued low energy costs.
On the positive side, utility executives said that the Obama administration has succeeded in stimulating dialogue about the energy industry and about specific sustainable solutions, such as wind and solar energy. They also cited the administration’s stimulus package, which included several billion dollars for energy initiatives, as a positive accomplishment.
Looking ahead, utility executives strongly agree that there will be an increase in electricity prices for end users and increasing environmental regulation, as well as greater implementation of technology and an increase of wind, solar and biomass in the overall fuel mix.
By. Darrell Delamaide