Google's Quest for Clean Energy Impeded by Small-but-Dominant Utilities in Some US States

Meta, Microsoft and Apple, and Google all want carbon-free power. But Google "says its goals for carbon-free power are impeded by state-regulated utilities," reports the New York Times, especially those in America's Southeastern states which aren't facing a competitive market. Google's battle in the region, where it has a major concentration of data centers, raises a question that applies to the energy transition everywhere: Is what's good for a few companies good for all? At the heart of their campaign, Google and its tech giant allies want to dismantle a decades-old regulatory system in the Southeast that allows a handful of utilities to generate and sell the region's electricity — and replace it with a market in which many companies can compete to do so. Such markets exist in some form in much of the country, but the Southeastern utilities are staunchly defending the status quo. Senior utility executives contend that their system better insulates consumers from spikes in prices of commodities like natural gas, promotes reliability and supports the long-term investments needed to develop clean-power technologies.... Most electricity in the United States was long generated and distributed by heavily regulated monopoly utilities in each state. But just before the start of this century, lawmakers and regulators, arguing that competition would bring efficiencies, made it possible to set up power markets and end the dominance of the utilities — a revolution that bypassed the Southeast. Google and others contend that the markets have brought cost savings, innovation and the capital needed to increase clean power generation from wind and solar. The most recent move toward a form of power market, in a group of Western states, has saved nearly $3 billion since 2014, according to the market operator. Self-interest also plays a role: In power markets, large companies can strike deals with independent producers that give them more leeway to bargain on price and secure more clean energy. Google entered a landmark deal last year to provide clean power to its data centers in Virginia, which is in a sprawling market called PJM.... The big utilities in the Southeast are now building more solar projects, but those pushing for a market in the region say it's not enough. In the region, the proposed solar projects' generating capacity is equivalent to just over a fourth of total capacity, which is far below the 80 percent for PJM, according to an analysis by Tyler Norris, a senior executive at Cypress Creek Renewables, a solar company, and a special adviser in the Energy Department during the Obama administration. "Project developers are attracted to open wholesale electricity markets with price transparency, independent oversight and the ability to trade with multiple potential customers," Mr. Norris said.

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