Electricity Consumer Principles: The Issue

The imperfect quality of electricity service today robs thousands of dollars a year from each American household, wastes immense quantities of energy in the process and is the largest contributor to man-made carbon emissions. These unnecessary costs are largely buried in the prices of all purchased goods and services; in lost jobs and competitiveness, where they go unrecognized by most consumers and voters; and in environmental impacts. Today’s policy structure severely limits improvement, innovation, consumer participation and choice, and private investment in the electric power system, thereby increasing modernization costs and limiting consumer value. To sustain and maximize the benefits of the smart grid projects provided for in the American Reinvestment and Recovery Act, a new policy structure is called for that fosters innovation, leverages local capital and resources, and will allow consumers to work in concert with utilities to transform today’s grid in a cost-effective manner. If done right, a new policy structure could guide grid modernization in a way that would produce consumer savings that exceed costs by four to five times. It will also enable states to compete in today’s digital economy by attracting the best people and businesses. If new policies are not implemented, smart grid costs will far exceed the consumer benefits.