unreasonable harm. nothing is more sacred than the safety of our families. i don't take that lightly and i would ask you to join me in helping to promote consumer safety i know that by working together we can be more effective and we can move that forward faster to keep those consumers safe. again my door is always open thank you to the consumer federation of america. this is a tremendous opportunity and i think rachel for her efforts to keep consumers a safe. thank you very much. [ applause ] >> this event was brought

together by industry and public policy leaders. this will continue with the electric grid it is one hour. morning everyone. i am ms. patterson. i am the general counsel at the american tower association. i will be moderate -- moderating this panel today. i see three major trends that are driving the landscape today. one is moving away from centralized, larger scale generation. the second is a electrification. moving towards electric vehicles

. and the third is a digitized administration --. today you cannot discuss designing the future of the power grid without discussing the revolution that this will present to us. there are advantages and disadvantages to digitizing the grid we have for panelists the are going to share their views on how this impacts consumers. first to speak will be jim spiers. the senior vice president of business technology strategies at the electric cooperative association. he leads the department that a prize is all there technology transfer.

we also have mark cooper director of research at the consumer federation of america. he is responsible for energy telecommunications and economic policy analysis. we also have john howe lick. he's been involved with energy issues since 1981. he manages projects related to low income, energy affordability and efficiency. and last but not least. we have lawrence ed daniels, he is the director of litigation for the washington, d.c. office of people counsel. he has a background in the telecommunications industry. since january 2000 lawrence has worked for the office as a regulatory attorney.

with that i will turn it over to jim to get it started. and will have time at the end for questions. >> thank you delia patterson. it's a pleasure to join you. to be here with mark, john, and lawrence. we spent our lives in this industry. i've had the opportunity to represent electric cooperative. let me give you a few statistics . and what the challenges and opportunities are. is steve still in the room ? he is retiring after 38 years as a great champion of consumer protection. we are all one of our colleagues, martin,

his executive vice president. is a been a long-standing champion and is also retiring after 30 years. his last day for me. i came to work with martin and establish this thing we call business technology strategies. it's about how the cooperatives participate in this new digitized environment. the three key pillars that we've been talking about. and the talk about cooperatives, fast-forward delia patterson's membership faced many the same challenges that we do. i want to give you a minute to answer, do you belie a -- belong to a cooperative ? you know the cooperative movement. there are two distinctive types of cooperatives.

some were founded to advance our market potential. at the same idea of a consumer cooperative came together. and we as distribution cooperatives for electricity are consumer cooperatives. they are aggressively labeling as a co-op. they're putting the consumer first. that's an important concept, and one that we the work as a cooperative work anywhere in the world. i've had clients worldwide that a been very fortunate. these cooperatives putting the consumer first is important. a couple of facts. 42 million consumers, we could mobilize consumers.

the grass roots is very aggressive. a couple weeks ago washington, d.c. we had a grass tops grew. the leaders, close to 80,000 strong. 2000 came to capitol hill to advance the consumer needs of our rural america. those are the things that trade associations normally do. we have been the new kid on the block. i'll talk about a few of those themes in just a second. you think about those 42 million consumers. 60% of the landmass of the united states. in rural america you have some places where there are one or two consumers. industrial utilities 35. rural america starts with a bit

of a handicap. by definition there can have higher prices. we understand that and we work with them. the thing about rural america, we comprise about 42% of the distribution infrastructure. the challenges are to get the high quality, affordable electricity. a couple of other things. manufactured housing, about 6% of housing stock in the united states is manufactured housing. and cooperative territories it is a double that. it's 14%. and now we have that challenge. if you think about the healthcare epidemic in rural america, the opioid issues, there are a lot of challenges

facing rural america. the question that i posed to you as consumers an urbanized area ., you live in a rural area ? a couple. most of us live in urban areas. why should we care about urban -- rural america ? national security. we are dependent on their -- them for water food, energy. the cooperative movement and putting consumers first is a very the centerpiece of what we are trying to do. let's talk a little bit about this new landscape of digitization. what are some of the threats ? data ? data security and data quality is a huge issue.

we are collecting mountains of data from u.s. consumers on a daily basis. how many of you have a thermostat that you can control with your phone ? a few of you. all of your consumption data is going to google. he probably signed off somewhere to give up your data. we as cooperatives on behalf of our member consumers take that data security very seriously. we put privacy first. your data is yours. it's not the cooperatives data. we want to figure out how to help you harvest that data for value. and the digitized world is given as a whole new way to think about that. also thinking about equal access for all. how are you be sure that low and moderate

income consumers are not left behind in the digital future ? we have a major initiative on access for all. there is a great way to use this platform to empower consumers to make an informed decision. how many of you love prepaid metering programs. if it is done correctly, not all are correct. if done correctly you're giving the consumer data and knowledge. and they're going save 8-12% of their consumption. data is critical to the quality of life . how do we empower consumers to use that ? we used to have

one other data point a month that we would collect out of a meter. now we collected data every 15 seconds. if you have advanced metering structure. think about that volume ? how do you that for consumer protection. talk about low and moderate income. also the other challenge. coming up high-speed broadband ? half of rural america does not. half of americans are underserved or non-served. if we don't know how to do that. does consumers are left behind. in this day and age you cannot function without high-speed communication. think about

going to that spot where you can no longer communicate. if you're on a vacation, that's a nice thing. if you talk about quality of life and economic prosperity that is not a good deal. if you go back to national security. broadband or high-speed medication is in the eye of the beholder. we think there is some opportunities and significant challenges. were working a lot with the administration and with congress to think about what is the appropriate role of federal support to expand high-speed medication. 80% of poverty counties are served by cooperatives. many of those do not have broadband. we think about lifting people

out of poverty. and taking on the healthcare epidemic, so that consumers have quality-of-life opportunities across america. we need to do infrastructure development. we work on that extensively. and i know that delia patterson and her partners are doing that. there is a phenomenal opportunity for all of us. and banding together to put the consumer first, and being able to bring the opportunities to the table helps us to mitigate those risks of the future. one other small point. how many of you gone through a small storm where you've lost power for a few days ? there is a new concept called reliability. we now apply a new filter and call it resiliency. the ability to maintain or return to state quickly.

the platform that we talk about is micro grids. you build a small system they can stand alone. and it can recoup far faster. cooperatives were the first micro grids. they didn't have a big grid that they were tied two. we are now back to that environment. and this whole digitization platform, and what it means for selling more electricity. i have probably taken too much time.'s ominous a down and turn the mic over.

just a blink of an eye when you think about how long the electric industry has been around, in the short 20 years we have seen a lot of change and it has been my fortune to watch the change. there were four principles for consumer advocates that the office of the people's counsel was focused on as we face great modernization, the dc public service commission the regulator of utilities, has the

proceeding for modernization and we have submitted as a man -- the -- obstetrical amount of information and attended conferences on grid monetization. i want to touch on four principles for consumer advocates, i really want to touch on these for for great modernization to start the discussion that i think has to be in place to have adequate summer protection as we go forward, first, the long- standing consumer protection imperatives must evolve with modernization, quality service is the foundation of consumer protection as it concerns utility service. as we usher in modernization, other principles must evolve with the foundation. one that is important to us at the office of people's counsel equal access to the benefits of the new technology. technology should not usher in

energy deserts or inequality. everyone needs to benefit from the technology, although they might not be able to afford a solar system on their home, community solar has offered many opportunities for those that live in apartments and do not own or cannot afford to have the benefits of solar technology, that is one policy and implementation that we have seen and would like to see as we continue to evolve. also, affordability, affordability has always been a foundational principle for consumer protection but will be even more so moving forward. as new technologies come along, we have to pay for them, nothing is free. we have to make sure that those that cannot participate in the new technology are not subsidizing those that can. there will be challenges there. and also, cyber security.

as it has been mentioned, data and protecting our data will be critically important as we move forward. we have to have some focus, regulatory focus on making sure that cyber security is maintained. secondly, control of a modernized distribution system must be made clear. for well over a century, investor own -- owned utilities have been gate keepers of what happens in the network. with the introduction of distributing resources, that can be generated by the actual residence or vendors that are not regulated utilities. we must ensure that the utilities are not serving as gatekeepers but as chokepoints to prevent these entities from actually introducing these new tech knowledge he is and are not blocking progress. we are starting to see where some regulators are coming up with policies that can actually introduce these tech allergies to a network without disrupt the

reliability, first and foremost, but also, that we can actually have benefits of these new technologies, electric vehicles is one and battery storage would be another. third, a clear set of rules to govern access to system information must be established early, big data, that is an issue we will all grapple with, not only in this industry, but several. i grew up in the telecommunications industry coming out of college, after loss cool i was in the energy industry and the same issues that tell of palm -- telecom grapples with ruth data management, energy is starting to understand and in some instances, bumping its head dealing with data. in the energy industry, when i started in 2000 there was only one data point. that was the bill you got at the end of 30 days, now we

collect data that is available on almost a by second basis. all of this information tells a pretty intimate story about how you actually use your energy. that information has to be protected. it is critical, not only to the integrity of the network, but also critical to the confidence that consumers have is in the network, if they do not feel confident that their data will be protected, they will not engage in the modernization and that could lead to some pit falls or shortfalls in meeting certain environmental goals and also other goals that different jurisdictions may have, that they rely on for consumers to engage. >> lastly, mechanisms to measure the effectiveness of modernization must be in place to guide future policy decisions. there is an old adage that you cannot manage what you do not measure. benchmarks have to be established early to see

whether or not we are actually being successful as we march forward with this modernization. it is especially important when dealing with the energy industry because the electrification of america really was the technology that allowed the country to be as great as it is right now. if we do not make sure the great modernization is done in a responsible and -- grid modernization is done in a responsible and ethical way, we have to have mechanisms in place to say , are we meeting our goals? how do we adjust? that is something we have not done in a while, adjust, benchmarks will be critical to ensuring that we understand where we are and where we are going. finding out how new pockets of consumers, some people want any options with pricey and in-home technology and others do not. how do we start to develop policies to make sure that everyone's needs are being met,

but also making sure that the network runs safely and reliably as. with that i will step down and allow the other panelist to come forward and then answer questions at the end. thank you. good morning, steve, thank you for the invitation to be here and congratulations to you on an amazing career, cfa is such a great partner of national consumer law center's and we certainly wish you all the best. john haul it, i am with national consumer law center. we are a low income law and policy advocacy group based here in washington and in boston

. i would like to give a special hello to my colleague, olivia, who is here, and also to will ogburn, who ran in clc for many years -- nclc for many years and grew an organization that is unique and wonderful, we have been at the national consumer law center for 19 years, will request every minute of it -- will, regrets every minute of it. >> [ laughter ] okay, sorry, i would like to talk a little bit about grid modernization as it relates particularly to lower income consumers, data privacy issues that we have heard about are extraordinarily important, i will sidestep those a little

bit because some of the general consumer advocates here have got that under control. i will focus on a couple of specific low income issues. i start with the assumption in my work on tech allergy issues at nclc that clean energy is an imperative, there is not a trade-off between clean and affordable, they are imperative, equity is important, but climate change is real and low income individuals and families are the first to be in -- affected by the ramifications of climate change. one of the opportunities that we face in this technological and economic revolution that is ongoing right now, is reduced carbon intensity of the grid.

and, as jim talked about, we have access the two way information flows. we need to modernize the grid in order to accommodate two way power flows as well. if we want to have renewable energy that is available during certain periods of the day or night and does not run like a regular baseload generation plan, we need a modernized bridge -- grid to accommodate that. really, i think it's imperative for decarbonization turns the need for grid modernization into more of an opportunity. >> i would say that one of the aspects of low income energy advocacy that has changed a little bit over the last 5-10 years, is the extent to which there has been effect of

collaboration between consumer and clean energy advocates. this is another opportunity. some of the green energy friends are pushing for green energy programs at the state level. we as low income advocates are strong energy efficient proponent and finding a lot of common ground i would put this opportunity to collaborate in the plus column in terms of opportunities and challenges. >> in terms of concerns, i think with a lot of the investments in the new and modernized grid, there are upfront costs and anticipation of benefits, economic benefits that are often somewhat

speculative and certainly at best, somewhat removed from the present. there is kind of a timing gap here. this is a concern for people who are looking at cash flow challenges every day. how will we allocate these first costs? that is a major challenge, we have an equal home energy burdens, if the energy burden is a function of the households income and their energy expenditures, for lower income households, that burden is just by arithmetic, much higher. that is another challenge that we face with these upfront first costs. household cash flow is paramount for clients here at nclc. day-to-day cash flow really matters, some upfront costs

associated with grid modernization create particular problems for our clients. a report that olivia sent around a little while ago demonstrated that payday loans, which i think a lot of people in the room are familiar with, the number one reason that people take out these sometimes devastating loans, is to pay utility bills. cash flow. i do not know how will you can see this, but there was a 2015 survey of all residential consumers in the united states. the results showed that among household below $20,000 in income, 40% at some point during the previous year had given up a basic necessity to pay an energy bill, a basic necessity like food or medicine.

so, we have cash flow issues that are critical and we need to deal with. advanced metering, when a lot of people and about marc grid, smart meters are the first thing that they think about. so, i want to say a few things about advanced metering, concerns for low income fall into three basic categories, the cost of the systems, they are not cheap. there is remote disconnection that can occur with advanced meters that did not occur with the analog, where a person with a wrench would have to come and turn it off. then, there are potential penalties from the time varying rates that the smart meters and able. i would like to deal with these one by one very quickly. system costs, the first problem, we have a toolkit full of

effective low income energy assistance programs, both bill payment assistance and energy efficiency. as we deploy the new technology, not only smart meters, but other digital technologies, the importance of the programs really increases. in terms of remote disconnection, we have a toolkit full of regulatory consumer protection. the thing is, these consumer protections need to outpace and sorted the enhancement of the consumer protections needs to outpace the deployment of these new technologies. but, we have great models to work with. with respect to prepaid service, i have got to say, for low income households, this is really problematic. prepay is concentrated among low

income households where ever it is offered, in the u.s. and abroad. the disconnections for prepay far outpace that of post- paying customers. in terms of providing the informational benefits through prepay, i say, give it to everyone, not just people but are at risk of disconnection for nonpayment, but everyone should have access to real-time consumption and expenditure information. i want to finish up quickly, but in terms of penalties from time varying rates, we can hold harmless those that moved to a time varying rate if they say they are income qualified for the payment assistance, let's hold harmless provisions so that any penalties incurred through critical peak price or other time varying rate, these folks are held harmless through

rebates. you can opt in to these programs, particularly from the beginning, that is a great protection. you can also have what is called shadow billing where you provide consumers with what they would've paid with the various rate options available. we need a planning and regulatory process that explicitly takes into account both clean energy object is, and equity and affordability object to. none of these are impossible, these are not really rocket science, this is a matter of politics, some of it cost money and that has to be dealt with. it is not impossible to move forward in an equitable and just way. i will leave it at that and hope i did not go over to. >> there we go, i always look

at these opportunities to speak at the assembly as an opportunity to give a call to arms. this is not something i get much time to do, especially when testifying, but my call to arms today is bull, the technological revolution has already occurred. it is time for consumer advocates to get on the right side of history, embrace the revolution and then interest of consumers going forward into a progressive future, you cannot go back. you can be left behind, or you can improve the state of your constituents. now, my approach to slides is somewhat different from most people. i always do a big slide, hopefully i have a simple point

and my objective is to convince you to read 500 pages that i have written in the back of it. i call it analytics in service of progressive advocacy, i have a lecture i can give on that as well, but not today. >> i will get around to grid modernization, it is the six slide, it is there. this slide shows the last 50 years of economics of electricity generation and what has happened is we have had a revolution. the alternative is wind and solar, deficient he was always cheap and these are the least cost options. the social cost of carbon is irrelevant. it does not matter. the least cost resources are low carbon resources. using the cost of carbon will determine not the direction, but the speed at which we go. the administration is spending

an immense amount of time trying to get rid of the cost of carbon. in every proceeding that i have been in, the consumer pocketbook savings of efficiency and renewables justify them without a cost of carbon. they are fighting the last war, i am fighting the next war. there you go, i screwed that up, it happens from time to time. technology, with the slide is supposed to show is that there are certain range of countries and states appear at the top that have actually driven the penetration to very high levels . if this slide did not have all of those silly range things, it would show you the almost all of america, with the exception of half a dozen states is already behind all of europe. so, we are falling behind. we ought to be concerned about that . why are we falling behind?

we are falling behind because the digitization of the electric grid system is another iteration of the digital revolution. does anyone in this room not have a cellular phone? does anyone in this room not have a laptop or tablet? if you are in the room 15 years ago i would've asked the opposite, no one in this room raised their hand, the digital revolution has occurred. forget this business about the internet being broken, it is not. everything that you do is more efficient because of the revolution. on average, people spend 20 hours per week on the internet, that is a lot of time, i started studying this in the mid-80s and where would the time come from people said, everyone said the internet will eat the tv. people will stop looking at the tv and start looking at the

internet. interns -- it turns out, they watch exactly as much tv as they used to. where did those things come from? >> they came from the work of daily life. they eliminated all of the crap that you used to have to do to get things done. now you call ford, you look something up, you do not wait 30 minutes to go somewhere. you do that 40, 50, 60 times a week. tremendous efficient, that is what's happening in the electricity system, it enables us to use resources, distributed resources, much more efficiently to balance supply and demand and every character is take of the digital revolution is expressing it self in the electricity system and in the way that we shop for groceries. amazon has disturbed the world

and they will deliver groceries. everyone has tried, they did not understand how the revolution works, the guy at amazon actually does. it changes everything and electricity is no different. i'm going to skip the silver. okay, to remind you, i will pull a couple of headlines. the picture of that famous duck diagram were solar take the wedge out and raises the question of what will you do with the other time? the picture is not california, not arizona, that is new england. new england is not a very sunny place if you have lived there, i lived there for a while. i've been dug out 18 times from the snow. that was a day in april in new england, a hallmark day, transformation. it has only begun, look, there are in fact significant inefficiencies in the system because we would be better off saving solar and living it to fill in the back belly.

that will happen. it already has happened. solar is happening in arizona. fascinating second headline that i did not have time, it was in the newspaper this morning. california said every new home will be solar. of course, the headline said, oh my god, all of those solar panels on roofs, that is expensive. i could show you that that is not the future of solar in my original graph. if you look at the order they said the builder must build a rooftop or a community. i bet that they will count solar. almost all houses are built in tracks or development and people that live there can afford to have people on their roofs, every builder that is looking at competing in the marketplace will put up x number of units and will do

several things, he will build -- they will build in low-cost solar and everyone will have a battery for six hours of backup or there will be a deal with utility to build sufficient capacity to match every home. the member of the bec who is responsible and someone that i know very well says the benefit cost ratio of solar is 2-1, i think he was talking about roof tops. when you do community scale it is 4-1. this is a done deal. the rest of the world will get there as well, we should as well. now i go back to this other one. let us be clear, technological revolutions that have already occurred are very disruptive. the technological revolution is over, but we still have to have a social institutional revolution. we have to build the physical

and institutional infrastructure to support the system. this is a contrast between the 20th century, which was a simple, dumb system. build capacity to follow load. the future is, managed load. put it together, use the information, it is very important, but i will suggest how to handle it. and we have to build that institution. that is where the struggle really comes from. this is grid modernization, on the sixth slide, i told you i would get there. >> we are at a turning point or critical juncture, a quarter life crisis, almost a quarter life into the 100 year history of the revolution in which we decide which way to go. there is always a battle. there is always a huge battle at that moment when people lash out and say, oh my god, there is the future, i see it. many people say, it scares me.

the people that scream the loudest at the greenback party at the second industrial revolution and the party of trump which may or may not be the republican party, the coal miners, they look at the future and say, the future is coming, it is terrible. they did not do well in the past, let us be clear. the 20th century was not kind to coal miners at any point. now they look at a future where there are no coal miners and that obviously looks scarier than the shady existence as a coalminer in the 20th century. even west virginia had the sense to reject someone that said that is the right way to do things. at this critical juncture, you could take a leading nation like america, tell it to turn back, and then you'll watch the rest of the world pass you by. that happened to the british, they were the leader for the worst and early second industrial revolution and they got confused about what to do

and were passed by. we are at that point here, you can make the mistake, i encourage you not. in order to encourage you not to as consumer advocate, you all like progress and whatnot, but now we need to have principles for progressive policy. every one of the suggestions that you hear, i have heard before, i believe you can just defy rigorous analytic terms, i have given you the economics, here are the principles about energy justice , availability, affordability, intergenerational equity and so forth. articulate them, explain to policymakers exactly how they will be achieved in real-world policy. >> this is my favorite graph, an economic graph that no one understands. that is okay, there are two

problems, supply-side and the current rate structures being riddled with inefficiency, excessive monopoly profits, all kinds of things. we need to get rid of those and that shift occurs a little bit or a significant amount, then we have the demand-side and a simple proposition, the value of electricity to a low income household is higher than the value of electricity to an upper income household. keeping the lights in refrigerator on more valuable than heating the pool. to put up lightly it is easy to argue that making the kinds of concessions that john asked for in terms of keeping low income people on the grid and enabling them to have electricity, even if you have to underpriced them against your correct cost, increases social wealth because the value of a kilowatt to a low income household is greater than the value of a kilowatt to

a middle or upper income household i don't have to say resolve the efficiency equity trade-off that way, but if i do economics right, it is on my side, these are economic. the simple fact of the matter is, if we restructure like we do on the right side, they gain in consumer surplus on the left- hand box is larger than the loss of consumer surplus for middle and upper income people. i am perfectly happy to be cross examined and i am trying to retire. at the end of the day, we are at a turning point, a critical moment and john is one of the people, there are people on the list serve to give me heartburn, we argue about that, they just do not want to see the future. they do not think they have been well treated in the past. the weavers were not well

treated either, breaking machines did not get them anywhere. the coal miners were not treated well anyplace and not telling their kids that they had to go to college was a big mistake, they kept saying, you will get my job, they never should've wanted that job anyway, but they did not send them to college, that is a big thing about that on the news yesterday about how training and education is the key to breaking the cycle of poverty. that is my call to arms, now is the moment for us to really support this stuff, we will have plenty of chances, especially within an administration that wants to go in the wrong direction. they need to hear unequivocally from everyone in this room, on every other issue you would not have to take one second to oppose the party of trump. do not blink on electricity and energy issues. thank you. >> [ applause ] okay, we have

some time for a couple of questions of our panelists, i would throw it out to the audience to see if there are questions, if not, i have a couple of my own. any questions? okay. we do have a question. >> hello, i have been engaged in these issues in illinois for several years, we have a grid monetization program in illinois right now and it is unfortunately dominated by the engineers. i am curious on what advice you have for consumer advocate that are not steeped in the details of the highly technical nature of some of this policy and how to engage in some of these policies to ensure that consumer protection values are preserved through the processes ? >> i would like to answer that

by pointing to the popes discussion on climate change, no one in this room has read it but i encourage you to. it is a remarkably progressive document. the pope is a jesuit and was a chemist, he believes in science unlike others in washington. he made a simple observation, i believe in science. science that is not in service of social values is useless and harmful. the answers that engineers can give you answers to questions, but they are the wrong questions. the question for the engineer is how to maximize social value . if they do not recognize, as i said, that low income people have a bigger claim to a smaller number of kilowatt hours, then they should leave the room, they are not part of the debate. the charge should be, how do

you serve john's people in the most efficient manner that you can. it turns out, science is less constraining than you thought. the digital revolution is about innovation at the end, not utilities and centralized planners. there's all kinds of crazy people and crazy things and some of them have. that is the answer, science needs to serve society and when they try hard, it turns out you will not oppose much pain on that, but they do not think about that. >> let me add to that, these typically are not regulated the same as utilities, the local board really is there to represent the consumers and the consumer welfare. setting that aside as an old regulator of the colorado commission years ago, the best advocacy that you can bring to the table when you have all of the data pieces and all of this in front of you, bring consumers that can talk about

what they need. quality of life, economic prosperity, improving the environment, those issues at the end of the day will start to dampen what we always had in the regulatory world, getting buried with data. get out of the data world and get to real live stories about the incredible value of the new paradigm that we have all been talking about, bring people to the table, regulators will listen to people. average regulators have less than 4.5 years by some counts, the regulators often times do not know what is going on either, they do not have steep backgrounds in this space. it is not a criticism, it is a reality, bring people to the table and you will make a different. >> i think that was a great question and the challenge at the state regulatory level it seems is for advocacy and

advocates to get together before the proceedings are well underway and to insist on a planning process that incorporates the object does and values that we think are important. a lot of the utility regulators now, they are not used to looking at what they call non- economic values, marc correctly points out economics associated with inequity, but the utility regulators for the most part, they are just not used looking at these sorts of values. i think if we have a planning process that is applicable to really any sort of new proposition that comes forward with respect to grid modernization, rate design, or the regulatory paradigm, all of these big questions that we face

and the state utility regulators as well as the co-ops and municipalities are facing, if we have a process it looks specifically at what would be the ramifications with respect to relative energy burdens, what would be the impact on secure access to service? take some of these basic metrics and incorporate them into the planning process and the evaluation process. then i think we have a chance and the engineers will have to take a deep breath and relax for a few minutes. >> [ laughter ] >> briefly, i would say that i would tell the regulators, as we are, that public interest is a balance of many factors, you need the technical aspects, that is obvious, economics are there, the environmental, but really, whether or not this will work is whether or not consumers will use it and

engage with it. their interest are, as consumer advocates, the priority. and they really will be the drivers. their interest will be the drivers. you just have to make sure that consumer voices are heard. i agree, you have to bring real life stories, antidotal -- an total stories to the table. >> we have time for one more question. >> i am becky bowman with howard county consumer protection in howard county, maryland. in the old days, there was the utility and then the regulator of the utility. now we have moved to a system where we have electricity generation and the utility that is controlling distribution and you still have the regulator of the utility that now has some power over the sellers of generations.

what is the regulatory structure going forward, what should that look like it does seem like we are trying to fit a square peg into a round hole, i am not sure how we go about shaving off the corners? >> the interesting thing to me is that the role of the utility and the regulator in the 21st century are in some respect, much larger and more important than they were in the 20th century. the 20th century was about utilities like concrete and boiling water. that was all there was to it. generally, they will get angry when i say that but it was relatively simple. it was easy to figure out how much to pay them because you could do the rate of return on concrete and boiling water. in the future, they have to manage a complex grid. it is a lot harder, but it does not, it is cheaper, precisely because it does not require a lot of capital, it requires

intellectual property and management. that is the challenge, we have to find a way, consumer advocates like to know the rate of return and argue for percent less and calculate how much they could save consumers with 1% less. now we have to figure out how to pay these guys from managing a complex grid. that will be a lot harder, but the total cost ought to be a lot less. if that is the future, then the regulator is going to have to be less of an accountant, and more of a manager, he will have to be a referee between an understanding and making sure consumers get the value that they want and giving the end edges as much power as they possibly can, which is a big deal in the digital revolution. also, it is a nice handed -- a

question of letting the people manage and innovate. we are having a great debate about network neutrality, that is what the debate will look like over grid management. it is ugly but important. and it is a debate that we can win. as we have shown over the last 20 years. it is a different kind of role, i think that california is much in that mold, mcallister is an economist and understands the complexity. there needs to be political economist. adam smith was a political economist, karl marx was a political economist, they do not study economics for the purpose of economics but for implementing policy and making society better. they had differences about how to get there, that is the kind of thing, a different regulator, not an accountant. he needs to be flexible and sensitive and has to have a

process that gives consumers their voice and gives utilities their voice. then you have the surge of generators that are in most states, still inside, in some states, they are out right. again, generator that does not have a market is out of business. that generator has to figure out how they will live within the confines of energy history. >> let me give you another add on to what marc said, i always find aggravating when i have to agree so fully with all that marc has, all of that aside, even though we are not rate regulators, our lord sits as the regulator for these purposes, managing and regulating this new thing is a daunting challenge. i think to the point that cooperatives are seen as being leading innovators in the whole grid modernization. we have that reputation with doe, one of the reasons is, it is a far

faster cycle for us to make decisions and put new test into the ground and is for an investor of utilities that has to go through a long and drawn out regulatory process that has to have all of these different interests accommodated. at the cooperative level you can move quick. right there, you have very tangible examples of investor own words -- utility regulatory model that is out of sync with where this is going. and that side for the investor utility and the consumer counsel role will be extremely significant in how it moves forward. >> i absolutely agree that sort of the traditional regulatory paradigm that is based on cost of service regulation, is no longer as relevant as it used to be. performance metrics are going

to have to come into the equation, what is really critical in that transition, in my view, and by the way, i would not think that we will completely replace cost of service regulation, but rather, enhance it with performance metrics. we need to get those metrics right. if we do not pick the right metrics, then we will not get the right out. right now, the people that are talking about performance-based regulation focused very little on issues of equity and i think we have a lot of work to do to change that. the other piece, quickly, is that during the transition, we have already talked about the extent to which access to new tech knowledge he is an evenly distributed. low income people do not have the newest energy management equipment, they do not have the new energy efficiency tech knowledge he, they certainly are not putting solar panels on

their roofs, even if they own one. so, i think, during the transitional period, having access to a utility service that is part of a franchise monopoly, whether it is an iou or cooperatively or municipally owned, it is less relevant than having a provider of last resort that will ensure access to reliable sources for everyone. >> one final point and some of this conversation has stimulated the, in a new lucy and guzy world where we are not doing accounting and pouring concrete and boiling water, what are the principles? in that kind of world, two principles, or two questions come to the front, one, who has the right to ask? in the old days, the utility had the right to act on everything, then the puc would decide whether they would

recover the cost for that. in the future, the right to act has to be distributed more evenly, consumers have a right to act, suppliers have a right to act. the second question is, who bears the burden of proof? that gets extremely different. if a consumer has a right to act , to put a solar panel on his roof, the consumer does not have to prove that they have done the right thing. the utility has to prove that they have done the wrong thing. if you go back to the digital revolution, the second most important decision where the fcc said that anyone can plug anything into the wall as long as it does not hurt the system. that gave us the cable modem, it turns out. of course, at&t said, it is foreign-exchange equipment, it will blow it up. the fcc said, bowl, put a jack in there that an ordinary consumer can plug into the wall.

if you think that that phone is going to blow up your system, you have to prove it is hurting it, he does not have to prove it is beneficial. that was part of the revolution. that happened here, shift the burden of proof, shift the right to act and that is where the regulator gets to see, we get good behavior that way, it turns out. people do not want to blow up the system, they want to figure out if that makes it work better and the regulator steps back and at&t tried for a while and then gave up. they said, you will not stop these phones from getting plugged in, they went on to find another fight, just as evil, but it was a different fight and we were plugging stuff in. >> okay folks, we have to leave it there, please join me in thanking our panelists. >> [ applause ]

>> this form held by the consumer federation of america continues now with remarks from technology x words looking at the recent data challenges with equifax and facebook. they spoke about how the corporations are dealing with the fallout from security breaches, and what can be done to better protect consumers private information, this is an hour. good morning, if you will have a seat we will commence with the last session of the