By Kate Gibson
From the perspective of other countries, the way the United States approaches energy regulation can seem like a patchwork. This is a feature, not a bug, according to Colette Honorable, partner at the law firm Reed Smith, LLP and former commissioner of the Federal Energy Regulatory Commission.
The United States’ decentralized electricity landscape has helped it to foster diverse energy solutions, said Honorable, who discussed her time as a regulator at both the state and federal level on July 21 as part of Stanford University’s Global Energy Dialogues series. Energy efficiency and a variety of energy innovations will be key to deep decarbonization, she said, while energy affordability, access and resilience will remain essential to modern life. Honorable also addressed racial justice and urged her audience to do their part to make energy and other spaces more inclusive.
“I go into so many rooms where I’m still the only Black person and still the only person of color,” said Honorable. “Diversity of thought is critically important. Diversity of experience is what drives the richness of our ability to reach innovative and creative solutions and strategies.”
The complex grid
A decentralized electricity system and regulatory structure has been an advantage for the United States, said Honorable, who was also a commissioner at the Arkansas Public Service Commission and president of the National Association of Regulatory Utility Commissioners.
“We’ve been able to allow what works well in states and regions to dominate,” she explained.
Wholesale electricity markets, in which utilities, generating companies and traders buy and sell power for the next year or next hour, are a crucial part of this regulatory mélange, ensuring that low-cost, clean energy is available to consumers wherever they are, said Honorable. “That’s really the beauty of this complex grid.”
Nevertheless, Honorable would like to see more alignment between state and federal objectives. For example, many states have renewable energy mandates. The wholesale market, which is regulated by the federal government, should “not merely accommodate those goals, but really integrate them,” she said.
The Stanford Global Energy Dialogues series is organized by Stanford’s Precourt Institute for Energy. Honorable was interviewed by Precourt Institute co-directors Sally Benson and Arun Majumdar. Benson asked Honorable if electricity markets are sufficient to encourage the integration of energy resources such as energy efficiency and nuclear energy.
“That’s almost a stumper of a question, Sally,” Honorable joked, before answering that she would like to see market reforms that better integrate policy objectives around energy efficiency, nuclear energy and energy storage. Energy efficiency is best addressed at the state level, she added, recalling efforts she spearheaded in Arkansas.
Energy efficiency is the most promising short-term pathway for quickly and deeply cutting carbon emissions, according to Honorable. “It’s the cheapest kilowatt of energy, because it’s the one never used,” she explained.
Promising energy pathways
In the long run, “we need it all” in terms of energy innovation. “We have to be very nimble and flexible and not be so quick to judge one (technology) or the other. Let’s see how we can get them all moving” toward greenhouse gas emission reductions, Honorable said. She is excited about the potential of hydrogen, energy storage, and carbon capture and sequestration.
As the world moves to limit global warming, energy must be affordable, Honorable said. The costs of decarbonization are often passed on to consumers. We need to make sure consumers can afford these changes, particularly low-income people struggling disproportionately with the economic fallout of the COVID-19 pandemic.
“The economic pandemic is real,” said Honorable, referring to the idea that we are in a “triple pandemic” — a global health crisis, an economic crisis and racial injustice.
We also cannot lose sight of energy access in emerging economies. In “places around the world that lack access to energy, their economies aren’t able to develop as robustly as they should. Schools and hospitals and homes can’t be supported as they should,” said Honorable. “We can’t leave anyone behind.”
Consumers need to be able to count on electricity when they need it, said Honorable. Grid resilience is especially important as we face unprecedented threats to the grid of all kinds, from cyber and national security threats to severe weather events brought on by climate change. Summers are hotter and longer, and wildfires are burning longer and destroying more, she noted. “We need to focus on every one of these elements.”
Energy and racial justice
Everybody in energy has a role to play in increasing diversity in the sector and making sure it’s an inclusive space, Honorable said.
“What are we all doing to make sure that our workspaces, that the entities that serve the people, look like the people?” she asked.
Nobody has the luxury of ignoring racial injustice, Honorable said. She urged non-Black people to not think “this doesn’t concern you.” Instead, we all need to recognize that we are dealing with “systemic inequities and inequalities that span hundreds of years” and have impacted us all. Speaking to the students in the audience, Honorable said: “You have a unique opportunity to impact our globe in ways that we could never envision.” She added that she is hopeful about this generation of young people because they are active, strong, bright and creative.
COVID and energy
The COVID-19 pandemic is an opportunity for all of us to rethink our relationship to energy, according to Honorable. Many of us are at home more often and can be mindful about our personal energy use, from washing our clothes and setting our thermostats to cooking and showering.
“Where I work at home, I can look out to the street and I see probably six Amazon trucks a day roll through” in addition to FedEx, UPS and post office trucks, she said. “Do I order things from Amazon one at a time, or do I order them all together?”
“These are steps we can individually take to cut down on the fuels being used to transport goods.”
The next Global Energy Dialogues session will take place on Aug. 4, and will feature a conversation with Frank Calabria, CEO of Origin Energy, and Paula Gold-Williams, president and CEO of CPS Energy. Global Energy Dialogues are free and open to all. Registration is required.
The Global Energy Dialogues are funded by the Stanford Global Energy Forum.