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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.

 

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.

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.

Here are some questions I recently received regarding feed-in tariffs. You can download a flyer of this post here.

QUESTION: Who measures the kWh produced and pays out the appropriate feed in tariff amounts earned to the multiplicity of green producers? Who collects the money from other utility customers which are redistributed via feed-in tariff payments? Finally, is there any regulatory oversight?

MS: I believe the prevailing practice in Europe is to task the utilities with reading the meters and making tariff payments. Utilities are, after all, the ones signing the 20-year power purchase agreements at the tariff rate. Utilities are also responsible for billing and collecting the monthly charges that fund the tariff payments. Paying generators for kilowatt-hours and adding surcharges to bills are things that utilities do in their normal course of business anyway, so the regulatory oversight of these activities under a feed-in law isn’t really an added burden.

I can think of several ways to improve on the European tariff model. First, the funding to cover tariff payments should not be collected using throughput-based surcharges on utility bills unless it can be done in a way that isn’t economically regressive. Given the widespread economic benefits that result from the tariff, there may be a good case for collecting the revenues for it via the tax base rather than the rate base.

Second, the tariff rate offered should be based on the locational strategic value of the generator to the grid. If it’s downstream of a bottleneck such that it frees up needed capacity and delays or obviates a line upgrade, it’s worth more. At the end of a long feeder that sags under load, or in a place that needs VAR support, it’s worth a lot more. The Electric Power Research Institute has software models and reports showing how to assess the value of strategically placed resources.

Finally, the tariff should be used to meet other objectives, rather than just being a tool to promote renewable energy. This can be done by setting qualifying standards for the tariff program. For instance, the tariff language could require that each generator be owned within the community where it is located, which would increase local retention of energy dollars. As another example, biomass generators could be required to have an independent certification showing that the wood was sustainably harvested. The possibilities are endless.

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Every day, an enormous amount of energy arrives at the earth from the sun. Energy from the sun builds balanced and resilient ecosystems, enabling millions of species to coexist and evolve.

Every day, a tiny amount of energy is pulled out of the earth. Energy from oil, gas, and coal is used to build systems so destructive that millions of species are now threatened.

Is there something in the nature of these energy sources that accounts for the different results? Can we identify any characteristics of the sun’s energy that contribute to its propensity to build robust living systems, or find characteristics of hydrocarbon fuels that tend to build imperiled ones?

This website examines the parallels between energy infrastructures and social structures, and looks at the ways energy policies shape society. Centrally controlled energy systems are essential for maintaining centrally controlled political power, and those with a hand on the switch control the power. Although this is often acknowledged, the reduction of it is rarely uttered: if we want power to reside with the people, we must literally put the people in charge of the power. Democratic energy policies are essential if we are to have democratic governance.

Throughout the world, communities are empowering themselves by building energy systems that are owned and managed by the local community. Entire regions are becoming more secure not through military or political means, but by building community-based energy systems fueled by locally available resources.

There are no fuzzy green solutions to the energy predicament we are in, and we need to get beyond the point of talking about minor course corrections. Instead, the energy discussion needs to be reframed around building communities that can once again live in harmony within the larger community of life on the planet. This is the challenge of our times.

I hope you enjoy the site, and I look forward to hearing from you!

   - Mark Sardella