The Growing Fight for Energy Markets

NEW YORK ( TheStreet) -- For most of my life, and yours, energy politics has been about a fight for energy supply.

Now, as I indicated yesterday it's becoming a fight for energy markets.

So long as that energy is in the form of oil and gas, of course, existing energy companies can control prices by manipulating supply. Are oil prices under pressure, as Marketwatch reports today? Does maintenance on a few refineries, as Reuters reports -- keep the price high. Natural gas prices too low to justify new investment? Export the stuff, as Business Week writes -- then keep flaring and bottling in supplies until the new demand is in place.

But renewable energy of all sorts, plus efficiency (the cheapest renewable of all) keep advancing.

Thus, a state-by-state war has broken out over renewable energy, with utilities and fossil fuel companies trying to maintain their control of the market.

More than half the states with renewable energy standards considered bills this year to repeal those standards, Business Week reports and the big surprise is those efforts went nowhere fast, not because environmentalists are smart but because new suppliers are adamant about maintaining market access.

North Carolina, with an all-Republican government, failed this last week to move a bill and the issue is dead for this session, writes SolarServer. The same thing happened in Missouri, notes the National Resources Defense Council.

Here is where this hits your investments. Utility stocks, especially electric utilities, are among the most stable investments in your average portfolio. But these companies now face an historic choice between fighting the new supply or seeking ways to control it.

One way to get ahead of this is by getting into the energy storage market, which should be a $19 billion opportunity in four years, according to PVMarketResearch. That's what AES ( AES), which owns electric utilities in Indiana and Ohio, is doing.

Another way to get ahead of it is by fighting to maintain your monopoly status, as PG&E ( PCG) is doing in San Francisco. Its battle against CleanPowerSF, a proposed municipal utility that would buy solar power and distribute it through the PG&E grid, may be just the first of many such battles to come. PG&E has even enlisted its unions in the fight to maintain its monopoly, writes the San Francisco Bay Guardian.

Where a utility's market control is not threatened, the companies are trying to squeeze out rate hikes for the back-up use of their facilities. Both sides are organized, with the Alliance for Solar Choice facing off against the American Legislative Exchange Council, whose model legislation seeks to repeal renewable standards in the name of "choice."

All these fights, and more, are about the same thing. They're about controlling access to shrinking markets. They're about dealing with a more diversified set of energy sources. They're the canary in the coal mine for the coming energy crash.

At the time of publication the author had no position in any of the stocks mentioned.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.