Regulatory Capture

The NYT reports (NYT):

Two weeks ago, the French Energy Regulatory Commission, the C.R.E., decided that Voltalis, a company that installs electricity management devices in homes and businesses and then manages their use, would have to, in effect, pay power producers for the power that it saves.

Voltalis’s Bluepod boxes, free to consumers, plug into the home electrical panel and communicate back to the company’s computers by Internet. When, for example, summer demand on the electrical grid nears a peak, the system would automatically turn off air-conditioners for hundreds or thousands of consumers willing to give up the coolers for a short time to avoid the need for additional electrical production to come on line.

Naturally the ruling by the French authorities is being denounced as a case of too much coziness but it should serve as a warning for other "smart grid" companies. Google, for its part, already seems to be knee deep in talks with policymakers and other influential decisionmakers, both domestically and abroad (Google European Public Policy Blog).