Category: Animal Rights & Environment

By Erica Morehouse

California’s Alta Wind Energy Center, Image Source: flickr

Carbon auction results released today show low demand for California’s carbon allowances in the first carbon auction of 2017, with only 18% of allowances selling.

The results say more about the many milestones that are ahead for the cap-and-trade program rather than anything about the cap-and-trade program’s core function of reducing overall emissions.

Results from the February 22 auction show:

• The auction offered more than 65 million current vintage allowances (available for 2016 or later compliance) and sold about 11.6 million. Most of these allowances were utility-held allowances and some were from the province of Quebec. No ARB current allowances sold.
• Almost 10 million future allowances were offered that will not be available for use until 2020 or later; a little over 600,000 of those allowances sold.
• This means only about $8 million was raised for the Greenhouse Gas Reduction Fund.

Why cap and trade is working

Auction results themselves cannot tell us whether cap-and-trade is “working.” Though selling most allowances offered at stable prices at or above the minimum or floor price is generally a good sign, the reverse does not necessarily indicate that something went wrong with the cap-and-trade program itself. Disappointing auction result could simply be a product of the market’s expectation that more information on which to make an investment decision and plenty of allowances will be available in the future.

The best indicator of whether California’s climate policies, including cap and trade, are working is whether greenhouse gas emissions are declining. As we reported in November’s auction blog, all indications suggest California’s policies are reducing emissions.

Another important factor is whether California’s economy continues to thrive as the state implements some of the most ambitious climate policies in the world. Recent data from the Bureau of Labor Statistics shows that in 2016, California continued to add jobs faster than the national average, as it has in every year that cap and trade has been in place.

So what explains current low demand

Outstanding litigation brought by the California Chamber of Commerce and others challenging California’s cap-and-trade program design is likely still hampering sales of allowances and negatively affecting the auction, as many participants may be waiting to see how the Court of Appeals rules on the legality of carbon market auctions. Oral Arguments were held in late January and a decision is likely by the end of April.

At the same time, Governor Brown in January asked the Legislature to extend the cap and trade program beyond 2020 with a two-thirds vote; the supermajority vote, also recommended by the independent Legislative Analyst’s Office, could insulate the cap-and-trade program from legal challenges like the one brought by the Chamber. Two bills currently in the Assembly – AB 378 (C. Garcia) and AB 151 (Burke) – could both facilitate the extension of cap and trade and be passed with a two-thirds vote. But we are still early in this process and the market is clearly still waiting to see how the Legislation plays out.

What we can understand from California’s February carbon auction

• Regulated businesses under the cap-and-trade program will have to purchase a large portion of available allowances in order to comply with the cap-and-trade program requirements. It appears they have just decided to deploy the wait-and-see strategy they utilized in May and August, perhaps hoping for more information perhaps in advance of the next auction.
• One thing that is different between this auction and the May auction that also saw similarly low demand, allowances prices on the secondary market were quite close to the current floor price of $13.57. This means that entities are still valuing carbon allowances close to the floor price, showing expectations of a steady market in the future, there just wasn’t quite enough demand to soak up all the supply in this auction.
• The November auction when 88% of allowances sold was the last time participants were able to buy allowances for $12.73 at auction instead of the 2017 floor price of $13.57.  This opportunity for lower cost allowances seems to explain the higher demand in November.
• Importantly, the ARB allowances that went unsold represent a temporary tightening of the cap. They will not be offered again until two auctions have fully sold all available current allowances. This is an important self-regulating design feature of the cap-and-trade program that helps stabilize prices in the face of inevitable market fluctuations in supply and demand.

What to expect from 2017 auctions

Two major developments this spring may provide more certainty about the post-2020 cap-and-trade program, which we’ve noted before could significantly increase auction demand. First, there will likely be a decision from the appeals court on the California Chamber of Commerce case. There could also be more clarity on the bill or package of bills that could move through the Legislature this year.

The core functions of the cap-and-trade program are operating as intended, reducing carbon emissions while the economy thrives.  But it remains to be seen whether the Legislature will be able to act to provide the highest level of certainty for the cap-and-trade market.

By David Lyon

In its draft 2017 GHG inventory, published this week, the EPA estimates methane emissions from the oil and gas industry were lower than their previous estimate in the 2016 inventory.

The vast majority of the decrease comes from methodological changes in how EPA does these estimates and does not represent actual reductions from improved industry practices. We expect to see fluctuation in EPA estimates in future inventories as the agency continues to revise their accounting methods; this inventory should be viewed as the final answer. But, to see the actual trend in emissions, you should compare 2015 emissions to their updated estimate of 2014 emissions, not the estimate from last year’s inventory. EPA estimates a mere 2% reduction in actual emissions, largely attributable to reduced drilling activity and well completions, which is a result of lower oil and gas prices in 2015. This points to the importance of recently enacted regulations, like the EPA NSPS and BLM rule, to drive the much greater reductions needed to minimize waste and the climate impacts of oil and gas.

What about super-emitters?

While the draft inventory represents progress in that EPA is continuing the process of incorporating new data such as the EPA Greenhouse Gas Reporting Program, much work remains to be done.  For example, the inventory still largely ignores “super-emitters,” which science has shown to be a major source of emissions. EPA has made an important step by including emissions from the Aliso Canyon blowout, but they exclude other transmission and storage super-emitters, which an EDF/CSU study found to account for almost a quarter of the T&S sector’s emissions. They also have started to account for production super-emitters by including estimates of emissions from stuck dump valves, but the underlying data for this source are flawed and likely greatly underestimate emissions. EPA’s current estimate of production super-emitters only account for 0.2% of production sector emissions.

In contrast, our recent paper in Nature Communications found that super-emitters account for one-third of well pad emissions in the Barnett Shale. Although the science supports some of EPA’s revisions that emissions from individual sources like processing plants have lower emissions than previously estimated, if they had fully accounted for super-emitters, those emissions would have more than offset the paper reductions reflected in the current draft. It is important to see the forest for the trees: emissions may be lower for some sources, but you’re not seeing the true magnitude of total emissions if you ignore the biggest emitters.

What’s next?

In order for EPA to continue their progress in updating the inventory, it is critical that they are allowed to rely on the best science without political interference. We must not be misled by interest groups who claim that the updated inventory is the final answer because it gives the false impression of a large emissions decrease. As a start, EPA should continue collecting data from the Greenhouse Gas Reporting Program and Information Collection Request, assure the data is publicly available, and make scientifically supported changes to the GHGRP to increase the accuracy of reported emissions. EPA should also review existing and forthcoming studies that evaluate the contribution of super-emitters and determine the best approach for fully incorporating super-emitters into the inventory.

EPA is accepting comments on the draft inventory until March 17 and plans to release a final inventory by April 15.

By Kate Zerrenner

Kate Zerrenner and Leon Kaye of Triple Pundit tasting desalinated water at Sorek.

There’s an old expression that whisky is for drinking and water is for fighting over. The Legislative Session is upon us again in Texas, and count on water being an issue, as it always is in this drought and flood-prone state.

To start, this Session will see the approval of the 2017 State Water Plan (SWP), which is done in five-year cycles. In the five years since the last plan, Texas has gone from the throes of a devastating drought to historic flooding, which resulted in some reservoirs being full for the first time in 15 years.

Moreover, as more people move to Texas and climate change advances, there will be greater strain on the state’s water supplies. According to the SWP, Texas is already in a tighter situation than it was just five years ago: Surface water and groundwater availability will be 5 percent lower in 2060 compared to predictions in the 2012 plan, and existing water supplies are expected to drop by 11 percent between 2020 and 2070. Where are we supposed to get the water we need?

One place we could look to for ideas is Israel, which relies heavily on desalination – or the process of removing salt from water – to meet its needs. During Session, there will likely be calls to implement and fund desalination projects in Texas, which can help ensure water supplies in the future. But we need to take a page from Israel’s book, and create plans and policies that are thoughtful about reducing the technology’s energy footprint.

Cutting desal costs in Israel

Sixty percent of Israel is desert, and the rest is semiarid. (Texas, in comparison, is about 10 percent desert.) The harsh, dry climate means ensuring water supplies is a top priority, and as a result Israel gets up to 75 percent of its potable water from desalination. To put that into perspective, the entire state of Texas currently produces about 123 million gallons per day with desalination, or roughly 465,606 cubic meters per day. The Sorek Desalination Plant outside Tel Aviv, one of many in the country, alone produces about 624,000 cubic meters per day/ 164 MGD.

Lowering Desalination’s Energy Footprint: Lessons from Israel
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I recently toured the Sorek plant, the largest desal plant in the world, which provides about 20 percent of Israel’s potable water. One of the things that struck me, other than the sheer size, was how energy was a front-and-center concern. Since desal plants need constant power – and a lot of it – energy is by far the most expensive part of running the plant. Groundwater desal is highly energy-intensive, and seawater even more so – power is estimated at about half of seawater desal plants’ entire operating costs.

Kate Zerrenner and Leon Kaye of Triple Pundit standing in a desalination pipe at Sorek.

Three tactics help ease these costs and maintain plant reliability:

• On-site power generation: Two of the other biggest plants in Israel are located next to power plants, which means less energy lost during transmission and distribution, as well as greater reliability. One of those, Hadera, is located near a gas-fired power plant, which requires significantly less water than coal. Israel could further cut desal’s water footprint by installing no-water resources like wind turbines or solar panels on-site, as Texas is trying to do.
• Energy efficiency: Israel is home to the two most energy-efficient desal facilities in the world: Hadera and Sorek, respectively. Sorek looks to reduce its energy consumption at every step of the process, like its energy recovery system, which captures energy from the brine stream that would have otherwise been wasted and uses it to power pumps. Unfortunately, U.S. desal plants tend to be behind the tech curve because the approval process takes so long. With a robust, more streamlined approvals process and newer technology, American plants could maximize efficiency as Israel does.
• Taking advantage of smart pricing: Israel has variable electricity rates, meaning they change depending on the season, day of the week, and time of day. Sorek negotiated a lower electricity rate in exchange for participating in the demand response program – in this case, agreeing to do the most production at night when both electric demand and prices are lower. In fact, Sorek was built to be responsive to peak demand: It can change its operating capacity from 30 to 120-percent production in less than five minutes, in response to the electricity rate. Moreover, by enabling customers to alter their energy-use based on peak demand and pricing, Israel’s entire electric grid benefits from greater stability. Leveraging demand response could help desalination in Texas and other states that deal with drought, like California, be more energy- and water-efficient.

Desal in Texas

So, what does all this mean for Texas? In his recent book, Let There Be Water, Seth M. Siegel writes about how native Texan Lyndon B. Johnson shared former Israeli Prime Minister David Ben-Gurion’s approach to water. Ben-Gurion saw the promise of desal and LBJ seemed to view the technology as the future for ensuring America’s water supplies, especially in dry areas like his own beloved Texas Hill Country. Today, Texas is home to the largest inland desal facility in the world, the Kay Bailey Hutchison Desalination Plant. 

LBJ may have been the first Texas proponent of desal, but he certainly is not the last. IDE, the company behind Sorek (and the new Carlsbad facility in San Diego), opened an office in Austin a few years ago to look for potential sites in the state. Further, Governor Greg Abbott, recently paid a visit to Sorek, and many legislators who understand the importance of safeguarding water supplies are supportive of desal.

In the SWP 2017, about 2.7 percent of the proposed supply strategies are for desalination. That’s a relatively small percentage, but it translates to a giant energy footprint. When it comes to desal, Texas leaders need to understand that using low-water energy sources like solar and wind is important, energy efficiency is critical, and having smart energy policy that supports a more flexible grid – like Israel’s variable pricing – rounds it out.

As Texas embarks on another round of figuring out how to solve our water woes, we could take a lesson from Israel. The country has figured out how to maximize desalination’s potential, while minimizing its energy footprint. As Uri Ginott of EcoPeace Middle East said, “Desalination is turning the water issue from a zero-sum game to a win-win. Every drop doesn’t have to come at the expense of another.” When we live in a typically dry place that’s only expected to get drier, being comprehensive about our water solutions sets us all up to win.

Editor’s note: Kate was a guest of Vibe Israel, a non-profit organization leading a tour called Vibe Eco Impact in December 2016, which explores sustainability initiatives in Israel.

By Tomas Carbonell

(EDF Attorney Ben Levitan co-authored this post)

It’s barely a week since Scott Pruitt was confirmed as EPA Administrator, and he has already provided yet another indication of why he has no business leading the agency.

In an interview with The Wall Street Journal, Pruitt says he wants to undertake a “careful review” as to whether EPA has the “tools” to address climate change under the Clean Air Act. Pruitt further states that EPA should withdraw the Clean Power Plan – a vital climate and public health measure to reduce carbon pollution from the nation’s power plants – and instead wait for Congress to act on the issue of climate change.

Those statements are contrary to the law and disconnected from reality. As Pruitt surely knows, the federal courts – including three separate decisions of the Supreme Court – have made it abundantly clear that the Clean Air Act requires EPA to protect the public from dangerous pollutants that are disrupting our climate. The courts have repeatedly rejected Pruitt’s theory that climate pollution is an issue that only Congress can address through new legislation.

Over the last eight years, EPA has demonstrated that the Clean Air Act is an effective tool for addressing the threat of climate change — by putting in place common sense, highly cost-effective measures to reduce climate pollution from cars and trucks, power plants, oil and gas facilities, and other sources. These actions under the Clean Air Act are saving lives, strengthening the American economy, and yielding healthier air and a safer climate for our children.

Pruitt’s casual willingness to abandon that progress based on a discredited legal theory demonstrates deep contempt for the laws he is charged with administering and the mission of the agency he now leads.

EPA Is Legally Obligated to Address Climate Pollution

The Supreme Court has repeatedly held that EPA clearly has the authority and responsibility to address climate pollution under the Clean Air Act:

• In Massachusetts v. EPA (549 U.S. 497, 2007), the Supreme Court held that climate pollutants plainly fall within the broad definition of “air pollutants” covered by the Clean Air Act. The Court ordered EPA to make a science-based determination as to whether those pollutants endanger public health and welfare (a determination that EPA ultimately made in 2009, and that has been upheld by the federal courts).
• In American Electric Power v. Connecticut (564 U.S. 410, 2011), the Supreme Court held that the Clean Air Act “speaks directly” to the problem of climate pollution from power plants.
• In Utility Air Regulatory Group v. EPA (134 S. Ct. 2427, 2014), the Supreme Court held that the Clean Air Act obligated EPA to address climate pollution from new and modified industrial facilities.

In Massachusetts v. EPA, the Bush Administration’s EPA made — and the Supreme Court rejected —Pruitt’s same argument that EPA lacks the authority and tools to address climate pollution.

The Supreme Court said in no uncertain terms that:

The statutory text forecloses EPA’s reading … Because greenhouse gases fit well within the Clean Air Act’s capacious definition of ‘air pollutant,’ we hold that EPA has the statutory authority to regulate the emission of such gases from new motor vehicles. (emphasis added)

The Supreme Court went on to explain that – contrary to what Pruitt is now saying – Congress intended to provide EPA with the tools it needed to address new air pollution challenges, including climate change:

While the Congresses that drafted [the Clean Air Act] might not have appreciated the possibility that burning fossil fuels could lead to global warming, they did understand that without regulatory flexibility, changing circumstances and scientific developments would soon render the Clean Air Act obsolete. The broad language [of the Act] reflects an intentional effort to confer the flexibility necessary to forestall such obsolescence. (emphasis added)

The Court also found that nothing about climate pollution distinguishes it from other forms of air pollution long regulated under the Clean Air Act. It rejected the Bush Administration’s attempt to argue that climate pollution is somehow “different,” saying that theory was a “plainly unreasonable” reading of the Clean Air Act and “finds no support in the text of the statute.”

That was the law under the Bush Administration – and it remains the law today. It is a binding, rock-solid precedent regardless of who is running EPA at any given time.

Pruitt ought to know all this, because he was one of the Attorneys General who joined polluters and their allies in challenging EPA’s determination that climate pollution endangers public health and welfare.

That 2009 determination was in response to Massachusetts v. EPA, and it was based on an immense body of authoritative scientific literature as well as consideration of more than 380,000 public comments. Yet in their legal challenge to the determination, Pruitt and his allies again argued that EPA should have declined to make an endangerment finding based on the supposed difficulty of regulating climate pollution under the Clean Air Act.

A unanimous panel of the D.C. Circuit rejected those claims, finding that:

These contentions are foreclosed by the language of the statute and the Supreme Court’s decision in Massachusetts v. EPA … the additional exercises [state and industry challengers] would have EPA undertake … do not inform the ‘scientific judgment’ that [the Clean Air Act] requires of EPA … the Supreme Court has already held that EPA indeed wields the authority to regulate greenhouse gases under the CAA. (Coalition for Responsible Regulation v. EPA, 684 F.3d 102, D.C. Cir. 2012, emphasis added)

The Supreme Court did not even regard further challenges to the endangerment finding as worthy of its review. (See Order Denying Certiorari, Sub Nom Virginia v. EPA, 134 S.Ct. 418, 2013)

Pruitt’s suggestion that EPA should stop applying the Clean Air Act’s protections to an important category of pollutants – greenhouse gases – amounts to a repeal of Congress’s core judgment that all air pollutants that cause hazards to human health and the environment need to be addressed under the Clean Air Act. It is an audacious and aggressive effort to alter the Clean Air Act in a way that Congress has never done (and has specifically declined to do when such weakening amendments have been proposed).

EPA Has Established a Strong Record of Successful Climate Protections

Pruitt’s statements also ignore the pragmatic way in which EPA has carried out its legal obligations to address climate pollution. Since Massachusetts v. EPA was decided, EPA has issued common sense, cost-effective measures for major sources of climate pollution – including power plants; cars and trucks; the oil and gas sector; and municipal solid waste landfills.

These actions demonstrate that Pruitt is flatly wrong to suggest that EPA lacks the “tools” to address climate change under the Clean Air Act. They include:

• The Clean Power Plan will reduce carbon pollution from the nation’s power plants to 32 percent below 2005 levels by 2030, while providing states and power companies with the flexibility to meet their targets through highly cost-effective measures – including shifting to cleaner sources of generation and using consumer-friendly energy efficiency programs that would reduce average household electricity bills by $85 per year. The Clean Power Plan will protect public health too, resulting in 90,000 fewer childhood asthma attacks, 300,000 fewer missed school and work days, and 3,600 fewer premature deaths every year by 2030. The value of these health benefits alone exceeds the costs by a factor of four, and the climate benefits are roughly as large.
• EPA’s standards for cars and other light-duty vehicles, will save the average American family $8,000 over the lifetime of a new vehicle through reduced fuel costs – while saving 12 billion barrels of oil and avoiding 6 billion metric tons of carbon pollution. A recent analysis by EPA and the U.S. Department of Transportation found that manufacturers are reaching these standards ahead of schedule and at a lower cost than originally anticipated.
• The most recent Clean Truck Standards, which were finalized in August 2016, will save truck owners a total of $170 billion in lower fuel costs, ultimately resulting in $400 in annual household savings by 2035 – while also reducing carbon pollution by 1.1 billion tons over the life of the program. These benefits are one reason why the Clean Truck Standards have broad support from manufacturers, truck operators, fleet owners and shippers.
• EPA’s methane emission standards for new and modified oil and gas facilities, finalized in June 2016, will generate climate benefits equivalent to taking 8.5 million vehicles off the nation’s roads – while having minimal impact on industry.

When Scott Pruitt suggests that the Clean Air Act is a poor fit for regulating climate pollution, he overlooks the clear command of the statute, as confirmed repeatedly by the Supreme Court. He also ignores EPA’s successful history of issuing regulations that protect the environment while promoting significant health and economic benefits.

Pruitt might try to distort the truth in an effort to wipe climate protections off the books — subjecting our children and grandchildren to the dire health, security and economic effects of unlimited climate pollution in the process. But the law and the facts are not on his side.

EPA must address climate pollution under the Clean Air Act, and it has the tools to do so effectively.

By Jim Marston

A big part of President Trump’s agenda involves rolling back critical environmental protections. And yet, the issue that most people think won him the 2016 election is the economy.

From coast to coast – and especially places in between – jobs were the most pressing concern for American voters. So Trump has promised he will create 25 million new ones over the next decade by, among other things, reviving America’s declining coal industry.

“We’re gonna put the miners back to work,” he told a roaring crowd in West Virginia last year.

But for all the bluster about bringing coal production back to life, Trump is not just ignoring market realities – he’s also overlooking the biggest economic opportunity since the computer revolution.

Here are the good energy jobs

In total, 2.7 million people [PDF] now work in clean energy nationwide, manufacturing and installing solar panels, auditing energy efficiency, developing smart energy apps, building windmills and on and on.

The remarkable growth of the solar and wind industries is already well-documented: Today, nearly 102,000 Americans work in wind and more than 260,000 in solar. Together, that’s more than three times the number of people who work in coal.

Trump promises a renaissance for coal – but these clean energy numbers tell a different story
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Less known, but equally important, is the rapidly emerging energy efficiency sector – now employing 2.2 million – as well as the advanced vehicle industry, which today employs 174,000 people. All this points to a changing energy economy.

And yet, on the campaign trail and since he was sworn in, Trump has consistently favored coal over clean energy, claiming that excessive regulation is what’s been holding back coal.

The real story behind coal’s trouble

Boosting coal jobs by eliminating the most basic pollution protections may be a popular talking point in some places, but that plan is not supported by reality.

The truth is, coal has had a hard time competing on price for many years now. The American natural gas boom with its lower prices, along with a constant price drop for renewable energy sources such as wind and solar, have put significant pressure on coal.

Result: American coal has been in decline for decades, and nothing the Trump administration can say or do will reverse that long-term trend. The president is hitching his economic wagon to a dying star – and ironically, he’s likely to encourage even more natural gas production, which will add price pressure on coal.

His promises about “clean coal” are equally hollow.

Maybe, someday, we will be able to burn coal without spewing poison into local communities and millions of pounds of carbon dioxide into the atmosphere. We encourage scientists to keep trying; perhaps they’ll figure out an affordable solution.

But today, there’s no such thing as clean coal – at least as it relates to carbon pollution – no matter what the Trump administration says. It’s a marketing ploy and a distant pipe dream, like low-calorie ice cream or fat-free cheeseburgers.

So what does all this mean?

Time for Trump to come clean

Eventually, the president is going to have to explain to unemployed coal miners in West Virginia, Kentucky and Pennsylvania – who are suffering real economic pain – why he didn’t put them back to work. Or why he didn’t help them get retrained for jobs that will carry them through the next 30 years.

Community colleges, chambers of commerce and small businesses nationwide are chomping at the bit to retrain workers to make, install and maintain our 21^st century energy system. Federal support for that approach would deliver far more jobs than empty rhetoric about reviving coal.

In other words, if he truly wants to get struggling coal workers back in business, Trump should look to the industry of the future, rather than the past. His voters will reward him if he does.

The post originally appeared on our EDF Voices blog.

By Diane Munns

Utilities and regulators are not typically known for innovation. Instead, they tend to focus their efforts and attention on reliability and cost effectiveness. So, when Rob Powelson, new president of the National Association of Regulatory Utility Commissioners (NARUC) kicked off his first national meeting under the theme “Infrastructure, Innovation and Investment,” I was intrigued.

The opening general session focused on how to upgrade aging utility infrastructure in ways that optimize new technology, and introduced a new Presidential Task Force on Innovation to promote modernization. This task force will discover how NARUC members can embrace emerging innovation – like integrated energy networks and battery storage.

This utility-industry focus on innovation marks a new direction. To prepare for the venture, we can learn from the most recent rapid disruption in a related industry, telecommunications: a mere 20-year transition from POTS (plain old telephone service) to PANS (pretty amazing new stuff). This cautionary tale reveals that the winners are grid operators who welcome new ideas and offer customers new services.

A cautionary tale            

In 1996, Congress opened up the local telecommunications market to competition, to spur lower prices and innovation. At the time, the market was dominated by the monopoly Bell System, affectionately known as Ma Bell, and its regional operating companies (also known as “the Bells”). There had been little innovation in local service offerings beyond the color and shape of the princess phone and some services, like call forwarding and call waiting. In fact, the Bells had argued to regulators for a long time that it would compromise the reliability of the system to allow others to connect.

What the US Electricity Sector Can Learn from the Telecom Revolution
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The opening of the market coincided with dramatic technological advancementss in communications, wireless, and internet. The Bell companies were extremely resistant to new market entrants and played regulatory games with everything from interconnection to customer service. State commissions were flooded with complaints of anti-competitive behavior, and the Bells used the regulatory process to block competition and customer access. While those wars waged, customers migrated from the telephone company to mobile wireless and the internet.

The once dominant Bell System is gone, and the existing wireline network struggles as it continues to lose market share. In contrast, the new networks, mobile and broadband, have thrived as they offer customers choice and evolving new services. We know that wireline phones were simply supplanted by seemingly superior, more desirable technologies. What we don’t know is how much the Bells’ emphasis on fighting change in regulatory battles, rather than putting resources into innovating within their networks and working with new entrants, contributed to their demise.

A new era 

The accelerating transition of the electricity system has been compared to the journey taken in the telecommunications industry. While the experience is not completely analogous, there are lessons to be learned. For example, customers flocked to wireless cell phones that offered them new services and mobility. The internet, designed to allow innovation at the edges, made it easy for innovators to interconnect their applications to the internet and reach customers. The more people that connect and use the networks, the more valuable the service. These technologies converged, giving customers the ubiquitous communications and internet devices we carry today, and increasingly more people have cut the cord to the telephone company.

Broadband internet, along with wireless technology, have transformed how we think about communications. The tale of the powerful Bell operating companies, in light of these new alternative networks, deserves study. Some thought alternative platforms couldn’t be developed to compete with the telephone company, and were proven wrong.

The American telecommunications story of grid defection and bypass can enlighten today’s utility system operators and regulators as they stand at the crossroads of choosing between using regulatory processes to cling to the past, or innovating in tandem with new technologies and new companies to deliver value to customers. In addition to delivering new value and markets, the new ways are cheaper and cleaner, too.