• 63°

ROGER WATSON COLUMN: Who will have the power?

The Albemarle City Council spent some time looking at electrical rates and talking about how to make them more equitable this week.

A more relevant discussion may have been whether the city wants to stay in the electric utility business.

Roger Watson

ElectriCities presented a cost study that suggested Albemarle join utility companies across the country who are transferring more of the costs of electrical service to monthly fixed charges. They didn’t talk about why electric companies are making those changes.

A new product called a Tesla Powerwall, using solar to battery technology, threatens to make the electrical line running to your home as irrelevant as the telephone landlines and cable lines are now.

The idea from innovator and entrepreneur Elon Musk is that if you can power a sports car with a big battery, you can power a house with a bigger battery. The cool thing about a battery for a house is it can be much bigger and heavier than the battery for a car and it can be recharged using solar energy.

The problem is the price.

Currently a Powerwall including installation costs between $10,000 and $20,000. The battery lasts for 10 years so if your electric bill is around $170 per month, the technology will just pay for itself.

But battery technology is getting more efficient and the price of these devices will likely drop over the next decade making them more and more economical until it is a no brainer not to have one.

Tesla Powerwall and Powerpack installations grew by 81 percent in the second quarter of this year. Powerwalls are now installed in 50,000 sites. That’s not a lot of places, but it’s growing and more companies will likely begin making similar home energy independent products soon.

If this technology takes off as some experts expect, the traditional electric utility service would be there as a backup to the home battery system, only used occasionally. Demand for kilowatts will drop dramatically and the country could have far more power generating capacity than needed.

That is why we are seeing this wave of utility companies basically converting as much of the electrical fee as they can to what amounts to a monthly subscription fee. That way they guarantee themselves a monthly charge unless families decide to completely cut the electrical cord and go off the grid entirely.
Within the next decade, some electrical systems may take this fixed charge idea even further, eliminating metered power charges entirely and base the monthly charge on square footage of the home, number of people in the family, etc.

It then becomes a cable TV model where the utility charges $150 or so per month and you can use as much or as little power as you want for that price.

No matter what happens, the economics of electrical systems are going to be disrupted in the next decade. It’s going to get messy.

Is this a business the City of Albemarle wants to continue to be involved in or is it time for them to begin finding a way to quietly and profitably find an exit?

That’s the discussion I would like to hear the city council begin. This rate discussion of moving money from one rate category to another to get the same amount of revenue may later be seen as akin to rearranging deck chairs on the Titanic.

Roger Watson is publisher of The Stanly News & Press.