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Good Energy Policy Begins With Asking Good Questions

2008-07-23T21:39:02Z

The Cities for Climate Protection Campaign, The 2030 Challenge, Build Green Santa Fe, The Apollo Alliance, Green Cities, Mayor’s Climate Protection Agreement, The Green Gauntlet, and Smart Growth America – all of these programs have great sounding names and, perhaps, they give us hope about the direction our country is headed in tackling our energy and climate problems.

Why then, with so many programs already underway, does Local Energy News continue to report discouraging news, and highlight the lack of progress toward our goals? I do it because I believe that the only thing more damaging than great sounding programs that don’t really address our problems is the widespread belief that we are actually dealing with our problems, when we aren’t.

The folly of false hope is that it allows us to continue down false paths, reducing our chances of getting to the right path soon enough to make a difference. I don’t see many of the programs that have been put forward as being “good enough for now” or “a great start”, I see them instead as attempts to placate the public while the powers that be continue with their business as usual.

We don’t need to be energy experts to differentiate between programs that sound green, and those that truly are. All we need to do is ask different questions. For example:

Did the decision to allow private ownership of critical infrastructures, such as the electric power grid, leave us vulnerable to investor-owned monopolies and their profit motives?

Do new energy policies we are considering promote local self-reliance, or do they reward interests outside our communities and put control of our water and food in someone else’s hands?

Do our policies reward a particular energy technology, which we may or may not know enough about, rather than simply rewarding projects that meet the goals of our community?

Let’s not settle for saying that we want to “increase renewables” or “reduce carbon”. Let’s try setting broader goals, like “diversity of supply”, increased local ownership, use of local fuels and labor, and retention of energy dollars in the local community.

If you want to build a housing complex for seniors living on a fixed income, as Santa Fe just did, we shouldn’t allow the developer to install electric heat—the most expensive kind of heat—after giving the electric company the right to raise rates whenever it wants to. It takes no special knowledge of energy issues to know that you can’t protect the seniors in your community under such conditions.

It’s getting pretty late in the game to claim that we still don’t understand the energy game. Let’s ditch the whole conversation about “renewables” and “carbon” and start talking about local, independent businesses providing energy from fuels that we harvest locally.

That, more than any great sounding program, will get us where we need to go.

The video newscast containing this story is posted here.

Nationalize the Grid, and Empower Local Companies to Build Solar

2008-07-09T21:11:05Z

Ten years ago, in 1998, New Mexico’s largest investor-owned utility, PNM, solicited bids to build a 5 megawatt solar electric power plant. Had the project gone forward, it would have been the world’s largest operating solar-electric power plant. But the project was stopped when 28 small solar companies in New Mexico, including my own, filed an objection.

As members of New Mexico’s Solar Energy Industries Association, each of us had mixed feelings about stopping a project that would surely bring attention to our state’s solar industry. But the more we learned about the project, the clearer it became that we needed to intervene.

The $50 million dollar price tag for the project was to be paid by ratepayers – financed over 20-years. But the cost of solar equipment at that time was falling every year, so we showed that by building smaller plants each year, we would end up with three times the installed solar capacity. Taking out a 20-year loan on equipment that falls in price every year makes no sense, but the project marched on anyway.

PNM was moving into the solar business – our business – with no risk, we argued, because they were allowed to bill all of their costs to ratepayers. This, while we were building solar power systems that needed PNM’s permission before they could be interconnected – permission that could be denied at any time, including after a system was built and ready to operate. Again, our objections were cast aside.

We filed a freedom of information request for the bids that had been submitted on the project, and found that the contract for the power plant had been awarded to the company that had received the lowest score on technology. It turned out that that company already had a contract with one of the members of the evaluation committee, but even this conflict of interest was not enough to stop the project.

So what finally put an end to PNM’s quest to build the world’s largest solar power plant?

We asked one, final, simple question about the project: What was PNM planning to do with the solar energy produced by the plant? It turned out that after collecting money from ratepayers to cover 100 percent of the costs for the plant, PNM was going to sell the solar energy to back to us. That did it – the project was mortally wounded when news of the double-billing hit the streets.

Now, ten years later, investor-owned utilities are contemplating another solar power plant – this one about 20-times the size of the last one. It’s too early to tell whether the same mischief will take place, but we can say with certainty that this project is based on the same, poor premise of putting investor-owned utilities in control of renewable energy.

This, while Denmark and other countries nationalize their power grids, modernize them to eliminate central control so that they can accept more renewable energy, and then promulgate feed-in tariffs to encourage small, independent companies to build renewable energy.

We can, and we must, do the same in the United States.

A video newscast containing this story is posted here.

Imagine a Government Promoting Local Self-Reliance in Energy

2008-07-03T01:56:25Z

Rising energy costs are a big problem, creating a direct financial hardship for those who can least afford it. High energy costs hit hardest in rural communities, where many residents commute long distances to low-wage jobs, and rely on propane – one of the most expensive fuels available – for home heating. Together, these two factors are threatening to destroy the rural communities that are the heart of this great country.

Big problems deserve big solutions, but so far, the proposals to address the energy crisis coming out of Washington have failed to contemplate the magnitude and scope of the energy problem.Even the presidential candidates, given a national stage every day to present a new platform on energy, have not taken the opportunity to put forth ideas on the scale needed to address the energy crisis in this country.

Let’s assume for a moment that the reason our politicians have put forth no credible plans for solving the energy crisis is that they don’t have any idea how to do it. In that case, here’s a fresh perspective: rather than trying to create an energy supply that can sustain our economy, let’s instead create an economy that can be sustained by our energy supply. It goes something like this:

Every town in America should immediately conduct an economic leakage study to characterize the loss of dollars from the community, particularly for importing food and energy from outside the community. Next, identify the greatest opportunities to reduce the losses through local production of food, fuels, and electricity.

Federal, state, and local governments must enact policies and fund programs to build economic resilience and security by applying the principles of local self-reliance to food and energy. For food, that means providing funding and support for community gardens, small farms and farm cooperatives, and local farmers markets. For thermal energy, it means creating opportunities and incentives for local, independent companies to heat local schools and businesses with solar and biomass energy. For transportation fuels, it means setting up small-scale, regional fuel cooperatives to grow, process, and deliver fuel from a diverse array of regionally appropriate biofuel crops. And for electricity, it means transferring ownership of the entire wires infrastructure to the public sector – and operating it the way we run our national highway system – for the public good.

Imagine unleashing the awesome power of government on a set of policies and programs that promote community self-reliance in food and energy, putting an end to the perverse incentives and programs that have created the least efficient, most polluting, energy and food system the world has ever known.

Imagining a government like this – one that works in the public interest – is imagining a revolution that is long overdue.

A video newscast containing this story is posted here.

Invest Two Trillion a Year in Dirty Energy? That's Insane!

2008-06-25T19:53:33Z

Doing the same thing over and over again, and each time expecting to get a different result, has frequently been used to define the word “insanity”. If we accept this definition, then members of congress and utility regulators must be insane.

Holding forty hearings on oil prices, taking testimony from the same oil company spokespersons and their highly-paid shills, and expecting to gain new insight, is insane. This, while scores of real academics and nonprofit institutions perfect decades of research on oil decline and their proposals for an orderly phase-out of petroleum, and continue to go unheard.

It is every bit as insane to expect nuclear power utilities – the same ones that sold us the first round of the polluting, expensive, and dangerous generators under a slogan of “too cheap to meter” – to now doom their industry by developing renewable energy. They would rather spend money on advertisements telling us how green they are, and then use our money to pay for the ads.

This year, residents, businesses, and industries in the United States will spend $2 trillion buying energy derived from oil, gas, coal, and nuclear fuels. At the end of the year, the fuel will have been consumed, we will be poorer by $2 trillion dollars, and the companies we gave this money to will be richer and more powerful. Then, we will head into 2009 with another $2 trillion dollars in hand, give it to them again, and expect a different result.

That is also insane.

Who is telling us that renewable energy is expensive, unreliable, inefficient, impractical, and insufficient to meet our energy needs? Could that message be coming from the same companies that sell us energy from sources that need to be mined and pumped again and again, year after year?

Is it possible that if we instead took the $2 trillion dollars – just one year of energy expenditure, and gave it to small, independent businesses to build public infrastructures that capture and deliver renewable energy, that every American could then have their energy needs met by local, renewable resources? We need to stop saying that what we want is renewable energy, and start saying that we want our energy dollars to go to small, independent, community-based businesses.

Renewable energy is easy to build from the technical and economic perspectives. But between us and renewable energy stands a giant that feeds on $2 trillion dollars a year, and uses the money, above all else, to convince us and our government that we need to keep feeding it.

Until that stops, we will keep getting the same result. Unless, of course, I am insane.

The video newscast that includes this commentary is here.

The Energy Revolution: Retaking Control with Local Food and Fuel

2008-06-23T20:05:25Z

The “food versus fuel” debate points out the weaknesses of, and the linkages between, our industrialized food system and our industrialized energy system. The key word here is “industrialized” – our food and energy systems are highly industrialized, such that it takes only a few of us, along with some powerful fossil fuels, to provide food and energy for the rest of us.

The industrial revolution was, indeed, a revolution. The tools created to foment this revolution replaced widespread and distributed human labor – powered by food, with highly centralized machine labor, powered primarily by fossil fuels. Most of the textbook accounts of this transition cite the marvels of the increased economic activity that followed, but few accounts – if any, cite the hazards of moving from a food economy to a fuel economy.

As we now work to bring about the next revolution – the one that returns us to an economy based on renewable energy, we should ask each other, “which characteristics of the fossil energy economy should we take with us, and which should we leave behind?” Were there aspects of the carbohydrate economy, which was itself a renewable energy economy, that we should be looking to resurrect for this next revolution?

Without over-romanticizing the old days of exhausting farm labor, we can still admit that there were characteristics of that time that were healthier from a social and an economic perspective. The most notable quality of that time that we should be trying to resurrect was resilience: with millions of family farms dotted across the country, a hardship in one area – a drought or a flood, could be made up by a more fortunate region. But we’ve lost four million farms in the United States over the last 50 years, as family farms are replaced by industrial farms. Add to that our single-minded dependence on petroleum, now controlled by a few industrial giants, and the greatest mistake of industrialism is clear: we have placed our fate in the hands of a few corporations.

Many believe that the renewable energy revolution will automatically restore the resilience we seek, but it’s not true that it happens automatically. The giants of industrial food have moved into organics and into biofuels, creating a confused call for sustainability on an industrial scale.

A revolution is a time to re-take power and control from the few, and return it to the many. We can accept that the industrial models for food and for fuel served a purpose, in their own place and time, and we can also accept their time has come and gone, and move forward to a new time of local food, and local fuels.

That's Why They Call it Power

2008-06-05T13:19:11Z

Higher energy prices, drilling for oil in pristine natural areas, and attempting to revive nuclear power are all outgrowths of the same phenomenon: oil and gas decline. It had to happen sometime – we’ve been hooked on powerful but finite energy resources for more than a hundred years now.

It’s not difficult to kick the habit of oil and gas from a technical perspective – if you add up all the energy we get from coal, oil, and gas every day, it doesn’t hold a candle to the energy the sun provides – the sun gives us 14,000 times more energy on a daily basis. There isn’t even an economic problem associated with getting off oil and gas. In fact, the transition to renewable energy would put an end to the practice of shipping more than a billion dollars a day out of the country to buy foreign energy.

Renewables are price-stable, because once installed, there are no fuel costs. And studies of renewable energy systems all show higher job creation and better local retention of energy dollars. So if switching to renewables is technically feasible and economically beneficial, why instead are we drilling in pristine areas and reviving nuclear power?

The answer of course is buried in that last word – power. The Greeks word for power is “kratos” – but for the Greeks this word also meant “rule”. To them, it was clear that the one with the power was the ruler. They added the word “demos”, meaning “people” to form “demokratia”, or “democracy” meaning “rule by the people”.

We still say we have a democracy, but as long as our energy supply is controlled by the few – the powerful, there is no denying that they are the rulers.

A Call for an Energy Democracy

2008-05-29T17:03:44Z

As we enter a time of increasing energy scarcity and mounting pressure on our overheated environment, it’s a good time to take a deep breath and ask the question: What do we hope to see in our energy future?

Most of us will cite renewable energies as the key, or reduced emissions of carbon dioxide, or perhaps we want greater independence from foreign oil. But these visions have recently given rise to some questionable efforts, such as the push to build giant transmission corridors to access distant wind resources. Recently we have even seen an increased willingness to take a fresh look at nuclear power.

But there’s another vision for our energy future that doesn’t lead to such bizarre results. Instead, it leads to stronger, more self-reliant communities. It reaffirms local sovereignty over energy resources, allowing communities to decide for themselves how they will meet their energy challenges.

The vision I’m speaking of is an energy democracy. In an energy democracy, the focus shifts away from technology, and towards people. Decisions about energy are made based on how they empower communities, and provide opportunities for civic participation. If this sounds too theoretical, consider all the ways that our current energy system has disempowered us. We say that we live in a democracy, yet we depend almost entirely on corporations located outside our communities to provide our energy needs. Can the people have power in such a system?

Democracy begins in our communities, so it is within them that we must re-empower ourselves by re-creating the ability to provide our energy needs. And there are practical ways to begin that process. Taking local ownership of the electric power system opens up the potential to use feed-in tariffs to favor local, independent generators of energy. District heating systems can similarly empower local thermal energy providers. And small-scale biofuel production can be done locally without putting the stress on food production that we have seen when biofuel experiments are attempted on an industrial scale.In a democracy, by definition, the power is held by the people. Until this is literally the case, I don't see how we can claim to have one.

Creating An Electric Power Internet

2008-05-22T02:57:29Z

Regulating electric utility companies to ensure that they act in the public interest is a messy proposition at best. At worst, it’s a tangled web of corruption and political maneuvering, aimed more at calming a hungry beast than ensuring fair rates and reliable service.

Regulation of electric utilities began in recognition of the economic power utilities wield as providers of a service that is so central to our lives. In theory, regulation prevents them from exploiting that power for selfish purposes, but one-hundred years after utility regulation began, we still struggle and often fail, to maintain the upper hand.

Part of that struggle is the sheer enormity of the task at hand. U.S. investor-owned utilities hold more than a trillion dollars in assets on their books, and the real value of those assets to our economy is many times larger.

The real failure of electricity regulation in the United States is a failure of perspective. We still view our electric power system in one dimension, as if power can only flow from central power plants to the rest of society. The few, small allowances we’ve made for customers to install solar panels on their homes only hint at the potential the grid holds for interactivity.

It is time to begin transforming our electric power grid into a fully interactive system of two-way power flows – an energy internet, of sorts. Imagine a system in which tens or hundreds of thousands of small energy devices stood ready to provide whatever the grid asked for, whenever it asked for it.

Some early musings on this topic have given rise to buzzwords like “smart grid” or “grid wise” in the United States, but such efforts have amounted to thinly veiled attempts by utilities to increase their control over the grid.

The real promise of an internet-style power grid is in removing central control, just as the internet did, empowering all participants to contribute to the system when they have more than they need, and take from the system when they don’t.
This internet-style architecture for electric power is under development around the world, particularly in Denmark and the Netherlands, where they have deployed what they are calling “active” power grids. Their systems have enabled faster growth of small power systems, and with it, vast improvements in the efficiency of their electrical generation. More importantly, their system invites thousands of new participants into the field of electric power provision, ensuring a more democratic energy system than could ever be possible with central control.

If you are a tech-head like me, there's a good paper on active distribution grids here.

Breakers are Popping For Investor-Owned Utilities

2008-04-30T17:52:23Z

Higher utility bills are tickling the limits of people’s ability to pay, and some investor-owned utilities (IOU’s) find themselves in poor cash positions as they struggle to collect on overdue accounts. Xcel Energy of Colorado now disconnects 600-650 customers daily, and reports that nearly one in five of its customers – or about a quarter million accounts – are in arrears. Xcel’s delinquent receivables are now a record $40 million. (Story – USA Today)

Public Service Company of New Mexico is having its own share of troubles as it tries to raise cash in the wake of a plunging stock price. PNM’s stock has recovered a bit from a low below $9 in March, but shares are still worth less than half the $35 they sold for a year ago. PNM shed its gas business in Santa Fe to raise cash, and is looking to sell other assets as well. They hope to fix their troubles by investing another $1.7 billion over the next 5 years, and concern about the rate impact of that investment has prompted Santa Fe to look into creating a public power authority.

Much of the trouble for IOU’s began with deregulation, when utilities confessed that the assets they were holding would be much less valuable in a competitive environment. Nobody could be expected to compete with 1960’s technology running at sub-thirty percent efficiency, could they? Now as these same utilities seek another big round of investment, investors and regulators are wary. Will we get competitive investments this time around?

There are good reasons to believe the answer is “no”. If anything, the regulatory landscape has tipped even further in favor of utilities. Most notable is the new trend toward revenue guarantees that ensure utility investments can be recovered in rates even as throughput drops on the system. But investors must be wondering why they should buy assets that can be so easily bypassed with distributed generation.

Besides, investors have better opportunities in the emerging “clean tech” sector, where distributed generation and load management technologies have made bi-directional, internet-style grids a reality. The Nordic countries still lead with their “active grid” technology, wherein connected resources actively participate in the health of the network, and soon enough these companies and their investors will pry open the U.S. market.

If active grids do get built here in the U.S., where would it leave our utilities? Waving their revenue guarantees in front of legislators and demanding a bailout, is my guess. It’ll have to be the taxpayers, because ratepayers will have left the system en masse to create active grids that can operate in parallel or stand-alone at will , delivering much higher efficiency.

The local economic benefits of creating an active grid that supports local, independent energy producers are too great to ignore any longer.

Santa Fe Considers Local Power Authority

2008-04-18T17:31:14Z

At the Green Business Networking meeting this morning, Bill Althouse gave a presentation on the reasons Santa Fe should consider creating a local electric utility. A lively discussion followed, and many members of the group expressed an interest in following the effort.

Santa Fe County Commissioner Paul Campos and City Councilor Chris Calvert have drafted a resolution to study the issue, which is posted here. (13kB PDF file)

The nonprofit Local Energy, which I chair, has created a new website to serve as the central communication point for this effort, and to follow similar energy localization efforts throughout the world. The new site is intended to be a clearinghouse for information on best practices for creating local energy systems that provide economic, environmental, and social benefits to communities. It is called Local Energy News, and it's already posted at www.localenergynews.org.

Until I get the email sign-up and subscription featues of the new site working, please sign up to my email list for this site, and I will add your names to the new site shortly.

Thanks for your interest and support of community-based energy!