Phillip Moeller, Commissioner, Federal Energy Regulatory Commission (FERC)
Keynote Address at Georgetown Energy and Cleantech Conference
Summarized Highlights of notes taken during talk:
Background/Opening Remarks
In high school he came to Georgetown to debate; energy independence was the topic he debated. We’re still talking about the same thing all these years later.
Summer 2008- June and July – world economy booming. Energy prices high- natural gas was 13-14$ MMBtu.
He recently met with the Minister of power in India. Sat down with him and tried to argue that subsidies were not the way to go but Minister said, “Well, 500-600 million people here (in India) don’t have electricity yet.” We have to keep that in mind as we go about crafting green and clean policies.
2500 hydroelectric dams in the U.S. FERC regulates those but no other power producers.
Retail side is handled by state level officials.
5 Big Trends
1) Quiet revolution in US related to natural/shale gas. In last 15 months, giant change in landscape. Drill rates near 100% with directional drilling and fracking. Enormous reservoirs and potential. Hainsville area = Arkansas and LA. PA and Marcelous shale should be area to watch for policy and interaction of business and environmental priorities. Wind and nuclear and all other investments will be affected by stable, cheap, huge supply of natural gas. Most efficient way to use gas is to use it directly, not by using it to make steam.
2) Wind industry is fundamentally changing electric industry. Grid is built for base load. Keep 3 U.S. grids at 60Hertz. Fairly easy to do with conventional. Intermittent power sources now in the mix so it’s a challenge.
3) As a country, we need much more energy infrastructure, especially with transmission. For 15 years we under invested because of uncertain direction of US policy. For gas, FERC can overrule states, but for electricity, FERC cannot affect inter-state electric transmission lines.
4) Potential of the smart grid. At wholesale level (most people never see) bulk power transmission system, smart grid will allow operators to see into the system better. For most folks, smart grid means a device that allows you to manage your electricity consumption better. Compare electricity options to telecommunications industry since is deregulation in 1984. Electricity needs a price signal. No options for consumers. Smart grid can transform society. Not much say at the federal level, however, because state or local area system has power. Next couple years- dynamic pricing possible in the District of Columbia.
5) Future of energy is about markets. In the end, we’re a market economy and it drives the system. It’s fundamental to human nature to minimize the cost in time and energy spent searching out energy. Give people choices.
Q&A
Carbon markets: cap and trade- challenge in carbon is that concentrations are ubiquitous around the world. Can’t solve problem here unless you solve problem everywhere. Future on carbon market is murky at best. But can make incremental steps through pricing, smart grid, transmission.
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