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Since Democrats swept to statewide victories in Georgia and New Jersey last year by campaigning against high power prices, “electricity affordability” has been the watchword for climate-concerned politicians everywhere. But what can states and cities actually do to bring down power prices?
The Federation of American Scientists has a new report out on Tuesday about how to make it happen — and speed up clean energy deployment at the same time. On this episode of Shift Key, Rob is joined by Arjun Krishnaswamy, a senior advisor at FAS and the new report’s lead author. He was previously a senior policy advisor for clean energy infrastructure in the Biden White House; before that, he was a special advisor to the chief of staff at the U.S. Department of Energy.
Shift Key is hosted by Robinson Meyer, the founding executive editor of Heatmap News.
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Here is an excerpt from their conversation:
Robinson Meyer: It’s interesting to bring up Connecticut because I think Connecticut has been a laboratory for a lot of these ideas. And there was a really innovative head of their Public Utilities Regulatory Authority, which is the same as their public utilities commission there, named Marissa Gillett, who tried a lot of experiments, turned herself into a big name in state politics, and ultimately did resign because there was just so much controversy attached to her and to some of these plans that it was just ... I think she was tired of dealing with it. Maybe the governor was tired of dealing with it, too. And now what we’re seeing in Connecticut, frankly, there’s going to be a state election this year, and there are fights about the legacy of this PUC. And electricity prices have remained a little high in Connecticut.
Now, she was working at a moment when I think the focus was on the cleanliness of the system, not necessarily the affordability. What do you make of the Connecticut example? Because that is the most recent example, I think, where a state public utility commission did turn themselves into a main character. And there was a lot of excitement about it, but I also think the legacy is maybe slightly mixed.
Arjun Krishnaswamy: Absolutely. I think this is a great example to have a conversation about the tradeoffs and strategy. So what she did I think you can put in — it’s more than this — but two big categories. The first is to say, as we just talked about, hey, what’s our traditional role as regulators? Our traditional role is to really look at what a utility puts forward and ask the questions we’re supposed to ask about what they’re putting forward. Are these proven investments? Are they reasonable? Should we pass them on to customers? Are there places where maybe you should be spending less on this thing or more on that thing? Like those sorts of questions — calling balls and strikes, perhaps. That’s category one. And then category two is some of this longer term, more innovative thinking around, how do we solicit different ideas for what we should do with the system in more creative, expansive ways, change the incentives for the companies in a more wholesale way?
On that first category of calling balls and strikes, I think what she did was go further than the utilities were used to on interrogation of their proposals, right? She said, you didn’t properly justify these investments, so therefore we can’t include them in your cost recovery. And that pissed the utilities off because they were expecting to be able to recover all those costs.
I think the problem there, or what we should learn from that, is two things. One is that the status quo of not interrogating those programs, it’s not working for customers, right? Because what she identified was, hey, there are places where you’re either just not providing enough justification, or in fact, you’re spending money on the wrong things when you could be spending money on some other things that have more benefits for the system and for customers. That’s one thing I think we learned. The other thing we learned is that the utilities really don’t like that. And so you have this political pushback that results.
You can find a full transcript of the episode here.
Mentioned:
CELS Playbook: Clean Electricity for Local and State Governments
Previously in Heatmap: How Electricity Got So Expensive
Previously on Shift Key: A New Theory About Why Biden’s Big Climate Law Failed
This episode of Shift Key is sponsored by …
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Music for Shift Key is by Adam Kromelow.
