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Steps too Far- Don’t Forget the Customer!

I haven’t taken any marketing courses like I haven’t taken political science courses – but this does not mean I, or anyone else, can’t learn some things about these two, or any other, subjects. The one thing I learned about marketing, and have repeated a thousand times within our organization is: it doesn’t matter what we think or what our opinions are for certain matters. We must view things from the other side. What does the buyer think? What are their “pain points”, concerns, anxieties, problems and bottlenecks?

I think it is safe to assume that the vast majority of people reading this blog, and the vast majority of the under-informed in our industry who don’t read this blog, are in favor of the recent carbon emission targets deployed by the EPA. This will be a bonanza for energy efficiency, renewable energy, smart grid, demand response, and the whole ball of wax.

I say, hold on. Pardon the term, but we are the fringe. A vast majority of the other 99% of business people, entrepreneurs, and corporate executives I am sure are not on board. Of that 99%, a minority likely believe they stand to gain from the regulation because they provide goods or services that will be in increased demand. Certainly, there are millions who think it’s a good idea but don’t understand the downside. It reminds me of a recent exchange I had regarding the gutting of Ohio’s programs.

Marty Kushler, senior fellow with ACEEE recently posted a sizzling commentary on the Ohio case. He clarifies how the bill signed into law by Governor Kasich is not a “freeze” as advertised, but closer to an annihilation. I was first to comment and thank him for clarification and sound arguments. There are a couple points on this I would like to make.

First, I’ll repeat it again, it doesn’t matter what our industry thinks, but climate change will forever be a Hatfields and McCoys brawl. As a side note, sure, the polls may show the American people are overwhelmingly behind reductions in greenhouse gas emissions; they are in favor of renewable energy; and in favor of energy efficiency.

But wait. These are public benefits. People don’t stop and think about the cost of public benefits because it’s way too complicated – and they think somebody like Monsanto will pay for it. Conversely, the response to this benefit question: “How would you like a new Mercedes?” would solicit a response of, “Get lost, creep”. Everyone knows darn well that’s not going to be free. So, these polls our industry promoters produce are meaningless if you ask me.

In case you haven’t noticed, in recent years, politics has become a blood sport of retribution, retaliation, and revenge. It is entirely naïve to think what has happened in Indiana and Ohio has nothing to do with policy and regulation spewing out of Washington. Uh, for instance consider Indiana Governor Pence’s response to the EPA dictate: “Indiana will oppose these regulations using every means possible.”

I repeat. It doesn’t matter what we think. As noted in Mr. Kushler’s blog post, Republicans had strong majorities in both chambers back in 2008 when the Ohio energy efficiency laws were enacted. They all flip flopped. Why? I’m saying these states are fighting back – i.e., retaliating. In fact, notice the parallel of Indiana and the federal government. In Indiana, programs were hatched by regulators and killed by the legislature. In Washington, regulators hatched the carbon reduction targets. I project these limits won’t stand for long, but that’s a story for another day.

Second, Thomas Stacy replying to Mr. Kushler’s post effectively states that developing redundant power sources in the form of renewable energy makes us less competitive. It translates to higher energy prices due to redundant generating assets. He talks about maximizing utilization rates of current assets. This is what demand response is for, but as described in my post about the California duck chart, the DR only applies to the conventional sources. So, I agree, the parallel generation is costly. To say that isn’t going to cost California is simply wrong.

I stated in the duck post these standards and mandates are going to hit the poor the hardest – and not so much the same for Tesla-driving millionaires. Just this week, The Wall Street Journal reports precisely that. Sixteen Democratic assembly persons wrote a letter to the Air Resources Board begging for a delay or overhaul of the cap and trade law, AB 32. People use the term “unintended consequences” for these sorts of boondoggles. Not me. There are only intended consequences and careless or thoughtless consequences. Anyone thinking could see this coming. On the other hand, maybe it was “intended”. I.e., support the law when it was voted in, and take backslaps from those supporters. Now that it’s in, fight against it to take credit from the other constituents – the best of both worlds!

Our industry needs to stay within the bounds of being cost effective. We need to help customers of all stripes and add to GDP and not diminish it or chase customers away, a la Toyota fleeing California.

Jeff Ihnen

Author Jeff Ihnen

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