FERC to utilities: "Change or die"

Allowing end-use customers retail access to the grid and the ability to actively respond to load changes would save billions of dollars, according to FERC Chairman Jon Wellinghoff.

In an interview with GreenBiz at last week's VERGE DC conference, which focused on the intersection of energy, technology and business, the top federal energy regulator said that the majority of utilities need to stop acting like dinosaurs.

"The traditional utility is either going to have to change or die," he said.

As communication technologies continue to advance, the old model of the vertically-integrated utility is being turned upside down, according to Wellinghoff. He said this means each end-user has the opportunity to be their own mini-utility and save money simply by having access to real-time load and pricing information.

"[Utilities] are going to have to look at other business models to spin off to assist their customers in participating in these grid opportunities," he said.

Wellinghoff proposed a view of the industry's future where loads will be interacting on a dynamic basis with the supply. He estimated that giving customers retail access -- the ability to choose their electricity provider and also "sell" unused energy back into the grid -- could bring as much as $100 billion in savings.

"If customers could access those prices and respond to those prices -- by either increasing loads or lowering loads appropriately -- they could save tremendous amounts of money, they could make the system much more efficient and it's going to change the way that we look at how to operate the system," Wellinghoff said.

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