An Illustration of the Problem Discussed in an Earlier Post

Michael Giberson

In a previous post I was complaining that the entrenched regulated utility industry makes the electric power business resistant to entrepreneurial efforts to shake things up, even when those entrepreneurs want to do things that regulators, utilities, and consumers say they want. (Like environmentally-friendly cogeneration projects, as The New Republic story mentioned.)

A story posted Tuesday at the New York Times‘ Green Inc. blog provides another example: “Discord Over Regulation of Car Charging.” The story reports that the three major regulated electric utilities in California each advocate different models for the regulation (or not) of electric car charging stations by the California Public Utilities Commission. Entrepreneurial companies like Better Place, trying desperately to provide the electric vehicles that many consumers, environmentalists, and policymakers say the country desperately needs, find themselves caught in a regulatory battle.

Not surprisingly, Better Place, based in Palo Alt, Calif., echoed that view, arguing that a heavy regulatory hand could stifle innovation and scare off investors. “At the early stages of this industry, we encourage the commission to set rules that do not foreclose new business models,” Jason Wolf, a Better Place executive, wrote in a filing with the commission.

It might be worse in areas regulated by municipalities rather than the state. In Sacramento, with a city-owned monopoly utility rather than a state-regulated private monopoly:

[Sacramento Municipal Utility District] has asserted that it has “exclusive jurisdiction over third-party electric vehicle service providers within its service territory” and that there is no “commercial space” for companies like Better Place to sell electricity at retail rates.

(HT to the Public Utility Law Project of New York, which seems to inadvertently help make my point by insisting, “History and experience with unlicensed ESCOs and submeterers teaches that consumers will need to be protected, for example, with proper certification and oversight of safety, non-utility metering of sales, and other consumer protection issues, such as regulation of rates, terms and conditions, and adequate price disclosure.”)