In previous posts on this blog, I have developed the theme that Virginia’s energy infrastructure needs to evolve from “Big Grid,” an industrial-wave system of giant power plants and transmission lines, toward a knowledge-wave approach that incorporates (a) “distributed generation,” allowing a greater role for decentralized power sources located close to customers, and (b) variable pricing tariffs that encourage people to conserve.
Virginia may soon face a critical decision point. Concluding that Virginia’s brief experiment with electric deregulation was a failure, Dominion has suggested that the state re-regulate the company. It wouldn’t be the same kind of regulation as before — the company proposes building in incentives for efficiency and conservation. The ideas sound good, as far as they go. The question is, do they go far enough?
The Commonwealth doesn’t get many chances to re-think how it wants to structure the electric power industry. It’s really important to get this right. In that light, it’s worth following the controversy over a high-voltage transmission line that Dominion wants to build through the northern piedmont — a classic case of the “Big Grid” approach. The need for electricity is real. If Dominion does nothing, Northern Virginia could face rolling blackouts by 2011. But if it builds the transmission line, the company could destroy incalculable value of farms and estates along the route.
In my latest column, “Power Play,” I ask if there’s not another way. Electric power is not a subject I know much about, but I did get some help from William W. Berry, former Dominion CEO, who recently served as chairman of ISO New England, a regional organization that makes the market for wholesale electricity. My hopeful conclusion: a combination of conservation measures combined with construction of mid-sized power facilities might buy enough time until solar energy kicks in and transforms the economics of the power industry.
As one of the earliest champions of electric deregulation, Berry also had some insightful comments about Dominion’s move back to re-regulation. In a word, he’s OK with it — but not because it’s the best thing for Virginia. He simply says that Virginia lacks the political will to create a truly competitive electricity marketplace. That’s a topic for a follow-up column if I have time.
