The rapid pace of change we are witnessing in the energy industry reminds me of Geoffrey Moore’s book Inside the Tornado. We seem to be in that period which Moore refers to as the “tornado”. Rapid adoption of distributed renewable resources using solar and wind technologies, Comcast offering me $1,200 to install solar panels on my house, CHP units being installed at hospitals and other large consumers of power, Green buyers taking matters into their own hands by establishing buyer alliances and establishing long term contracts for power (REBA), States passing legislation that encourages, and rewards, investment in renewable energy projects, wholesale markets under duress, fuel security concerns and the list goes on. All of these are indications that we are now in the tornado phase of the revolution, marked by the rapid changes coming from all directions. To quote Geoffrey Moore, “How could so much change be wrought in so little time”.
The tornado phase is a make or break time. The rapid changes in technology which Moore writes about are now manifesting in the Electricity Sector. Borrowing a line from “Inside the Tornado”, the Electric Industry, “like everything else on our planet are being shaped by the forces of evolution. Your mandate is unchanging: Innovate or Die”
But unlike the high-tech space that Moore writes about, where the next flashlight app goes viral or dies on the vine, the electric industry has life or death consequences. We must get this right to avoid unintended consequences from occurring, and that requires careful coordination among industry stakeholders.
Over the years, both Congress and FERC have provided sound guidance and leadership in how we can move forward during trying times, such as those we are currently experiencing in the Electric Industry. As a reminder for what is possible, I provide an excerpt from a FERC regulation that sums it up nicely:
https://www.govinfo.gov/content/pkg/FR-2018-12-03/pdf/2018-26158.pdf
“As the Commission found in Order No. 587, the adoption of consensus standards is appropriate, because the consensus process helps ensure the reasonableness of the standards by requiring that the standards draw support from a broad spectrum of industry participants representing all segments of the industry. Moreover, since the industry itself must conduct business under these standards, the Commission’s regulations should reflect those standards that have the widest possible support. In section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTT&AA),13 Congress affirmatively requires federal agencies to use technical standards developed by voluntary consensus standards organizations, like NAESB, as means to carry out policy objectives or activities determined by the agencies unless an agency determines that the use of such standards would be inconsistent with applicable law or otherwise impractical.
Let’s all take a moment to acknowledge that we are in the tornado phase of the electric industry revolution and recognize that our industry has life or death consequences across a broad population that relies on reliable electricity. As FERC indicated in the excerpt above “the adoption of consensus standards is appropriate, because the consensus process helps ensure the reasonableness of the standards by requiring that the standards draw support from a broad spectrum of industry participants representing all segments of the industry”. This will require the collective knowledge, intelligence and dedication of all stakeholders, using a consensus-based approach, to find our way to “Fair winds and following seas”.