Written by William F. Pickard   

On Wednesday, 14 October the Supreme Court of the USA heard arguments in the case Federal Energy Regulatory Commission vs. Electric Power Supply Association. At issue is whether the Commission (FERC) can require regional electricity wholesalers to pay large customers to cut back on their power draws at times when demand upon the wholesaler is peaking. Please note that the terms “pay” and “large customers” are fuzzy and susceptible to interpretation.

The electrical power system works like this. A utility normally has a fleet of generating facilities with which to meet demand. Some of these are output agile; but some are output sluggish and take many hours to effect significant changes in their outputs. Some are modern and energy efficient; but some are not. Per kilowatt-hour of output, some spew a great deal of carbon dioxide; whereas some emit significantly less. Additionally, the utility can buy power from someone else and have it shipped more or less instantaneously by way of the power grid; but this tends to be a pricey option. Each utility endeavors to minimize the cost of generation, thereby tending to maximize profit. However, at times of large consumer demand, the utility may be forced into the wholesale power market to fulfill its needs. And at such times, the price of a kilowatt-hour pulled from the grid may be several fold higher than the price at a time of low demand. In a radically laissez faire market the local utility could choose to meet high demand using inefficient older generators or expensive spot purchases from the grid, thereby increasing the total generation cost, a portion of whose legitimate charges it might skim for profit. OR, it might choose to engage in some variety “energy management”. One form of management is “peak shaving”, in which large customers are coaxed to shift certain of their electrical usages from periods of high area-wide power demand to periods of lower area-wide power demand. Another is “electricity storage” in which surplus electricity is, at a time of plenty, somehow “parked” in a “granary” for electricity and left there until needed.

In short, the Supreme Court is being asked to adjudicate a particular instance of the Intermittency Challenge. In this instance, the providers and consumers of electricity (a commodity that is notoriously difficult to store in bulk) are asked to modify their behaviors to match episodic supply to diurnal demand. This problem has been recognized (and largely ignored) for well over a century. Only in recent years has it come to the fore, because only now have fossil fuel reserves diminished markedly, only now have environmental concerns burgeoned, and only now have episodic generators of electricity (e.g., sun and wind) assumed importance. A tidal wave of intermittent electricity generation is in the offing as the generating capacities from sun and wind grow. Previously unimportant technical issues may well assume paramount importance as the electrical utilities strive to match supply to demand. And the fine points of any decision made by the Supreme Court could have Unintended Consequences as supply and demand each strive to match one another whilst striving simultaneously to maximize profit. Infelicitously worded, the Court’s decision could cripple America’s efforts to attain energy sustainability and zero greenhouse gas emission by 2050.

To give legislators, the judiciary, and the public an idea of just how tough matching electricity supply to electricity demand could be, reflect that (i) America’s generating capacity is around a trillion watts and (ii) that its average output is maybe half of that, 500 million kilowatts. If you want a day’s backup, multiply by 24 hours and see that around ten billion kilowatt-hours of electricity storage will be needed. The Department of Energy’s cost goal for electricity storage is $100 per kilowatt-hour. So a minimal backup such as this is going to cost at least a trillion dollars. And this is just a fraction of the energy storage going green will require. Remember too that energy storage today is many-fold more expensive than the DOE’s goal. What I mean to tell you is that an infelicitously worded decision by the Supremes could really gum up the works of our burgeoning energy storage industry.

Of course, it’s anybody’s guess as to just what trajectory America will follow as it switches from polluting depleting fossil fuel resources to green sustainable sources of energy. But, along any trajectory, we are apt to encounter legal questions not previously adjudicated. Moreover, “energy storage” (as employed on the street today) connotes the assurance of power quality whereas (as expected to be used on the streets of tomorrow) it will connote the assurance of power quantity. These are quite different animals!

The Supremes would be well advised to produce a consciously straitened decision that addresses only the narrowest of interpretations of the present case. Today’s desire to provide a few megawatts of generation for a periods of at most a few hours should not be permitted to straitjacket tomorrow’s imperative to provide a few gigawatts for many hours (or even a few days).

There is no royal road to energy storage. But cautious jurisprudence may at least keep what road there is free of delays, diversions, and disasters.






William F. Pickard, older ‘n’ dirt, is a retiree (from Washington University in Saint Louis) who specializes in energy matters. He’s pretty much clueless as to how to how the crises confronting America might be surmounted. But at least he has had the good grace not to stand for public office.