Speaking of Google, a rentseeking utility executive is now worried about the energy/climate dogs he helped unleash.
Duke Energy CEO Jim Rogers, who the New York Times dubbed the “Green Coal Baron” and who was a founding member of the cap-and-trade pushing US Climate Action Partnership, told the Deloitte Energy Conference yesterday,
One of the biggest risks I see of companies in vertically integrated markets…is what I call ‘disintermediation’ and what it really means is a Google comes in with an idea about improving the energy use in the home and the next thing you know the demand drops 30%.
Of course, had Rogers advocated energy policies that encouraged economic growth as opposed to economic contraction, energy efficiency wouldn’t be so much of a threat to Duke Energy. Now Rogers will no doubt jump on the decoupling bandwagon (if he hasn’t already) to preserve his profit margin.
Wow, that’s an impressive stretch! Are you really going to argue that saving consumers 30% on energy leads to an economic contraction? Aren’t conservatives interested in conservation anymore? Energy, after all, costs money, whether it’s from coal plants of wind farms. A family which saves 30% on their home electricity bill has more cash available to spend (or, yes, save) as they see fit. It’s like a cornucopian dream come true!
And even apart from that, disintermediation from “a Google” can (and does) happen even in the absence of regulation. The market sees a need and provides a solution.
I disagree, Doug. The issue is that the energy companies have no business advocating or promoting energy efficiency measures. There are many other lines of businesses that have that duty such as appliance makers, light bulb manufacturers, car manufacturers, or even the dirty words on this site, EPA and Greenpeace. The “contradiction” as you put it (more of a conflict of interest) is completely the making of Duke’s PR department.
The problem here is that what is good overall for society is stopped for the good of the shareholders. The concept of separating the two functions is socially beneficial. Imagine the auto industry owned by Exxon. Cars that don’t run on gas are not in Exxon’s corporate interests, so the invention gets killed or at least delayed.
Duke should be applauded for making public the contradictory demands and the necessity of separation. Reductions in energy use are good, and the Duke’s of the world will survive, but working against your shareholders’ interests is both ethically and LEGALLY wrong.
[addendum to above:]
peasants
pitchforks
torches
some assembly required
You guys just don’t get the “game”. Now they go back to the various public utility commissions and get a per KWhr rate increase to bring their cash flow back to what it was before demand dropped. Now they get a hefty increase in profits using less and less of their assets to produce it.
It’s call Merchantilism – better known lately as croney capitalism.