Hate Your Utility? Don’t Try to Cut the Power Cord Just Yet

The biggest players in energy have gathered in Houston for IHS CERAWeek amid the worst price rout in six years. Here are five takeaways from Thursday:

* Do you hate your utility? Don’t think about cutting the cord just yet, even if you have those rooftop solar panels. “To completely secede from the grid is more complicated than people think,” said John Woolard, vice president of energy for Google. The power grid system is changing from 19th to 21st Century technology in the space of a decade, the CEO of C3 Energy said. Utilities in the future will re-characterize themselves as providers of reliability, not just power, First Solar CEO Jim Hughes said. “Customers don’t understand when they have solar PV that they are not off the grid, they still need us when their air conditioning kicks on,” said Pat Vincent-Collawn, CEO of New Mexico utility owner PNM Resources.

* The EPA’s clean power plan rules, which would limit carbon dioxide emissions, were a topic of frequent discussion on this day devoted to electricity. Greg Boyce, CEO of coal company Peabody Energy, called the rules “ludicrous.” Power plant owners said they want more flexibility on the 2020 compliance deadline. EPA Administrator Gina McCarthy said they’ve heard they were “too aggressive” with the initial timelines. The agency has received 3.9 million comments (the longest one is 2,000 pages) in response to the proposal and it’s paying attention. “There’s no way short term we’re going to do anything that challenges reliability,” McCarthy said. At the same time, she highlighted the industry’s ability to respond to the challenge -- “This sector knows how to innovate when they face pollution problems.”

* Power plant CO2 reductions were part of the U.S. plan announced with China last year to curb emissions in both countries. Todd Stern, the U.S. special envoy for climate change, said that agreement has already helped international talks. Having the “two 800-pound gorillas” who were “historic antagonists” agree on a way forward not only provided a jolt to the rest of the world, it also helped break the deadlock on Lima talks and should be useful in Paris meetings scheduled for December, he said.

* The complaints about low oil and natural gas prices that peppered the first few days of the conference were muted Thursday as the focus turned to power. The price collapse isn’t all bad news -- power suppliers said they still see growth in Texas electricity consumption as industrial use kicks in. “Despite the lower oil price, load growth in Texas has continued apace,” Calpine CEO Thad Hill said. The head of PNM Resources agreed, saying she saw a 3 percent jump in power use in the state, compared with about a 2 percent decline in neighboring New Mexico, which doesn’t have the industrial customer base.

* Finally, while the week began with much talk about the effort to overturn prohibitions on exporting U.S. oil, gas exports are quickly becoming a reality. Cheniere is set to begin receiving supplies this year for shipping liquefied natural gas from a facility in Louisiana. While U.S. Energy Secretary Ernest Moniz said talk about oil exports should be “tempered,” he was more effusive about gas. The department has approved almost 6 billion cubic feet a day of exports to nations without free-trade agreements. “Certainly in this decade... there’s a good chance that we will be LNG exporters on the scale of, say, Qatar, which is today’s largest LNG exporter,” Moniz told reporters.

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