This post concludes a symposium on Sandeep Vaheesan’s Democracy in Power: A History of Electrification in the United States. Read the rest of the posts here.
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Sandeep Vaheesan’s Democracy in Power presents a coherent vision for more effective public control of electricity, to be imposed largely by congressional mandate. In his response, William Boyd provides an excellent explanation of the consequences of financial ownership of renewable power assets, and suggests supplementing Vaheesan’s vision with more effective public regulation of Investor Owned Utilities. Both aspirations—public control and effective regulation—provide ideas likely to be helpful, if not essential, in organizing political movements to evolve an electric system responsive to 21st century needs and opportunities.
Yet both proposals ignore a fundamental issue: almost all federal, state, municipal, and coop utilities currently operate with the same centralized, top-down planning and system control as Investor Owned Utilities. Unless that changes, public control and ownership will do little to remove barriers that now largely block the evolution of decarbonized, resilient, and more equitable electric service. For that, we have to look to decentralized, bottom-up system planning and operation. Radically localizing the provision and use of electricity offers the most economic, ecologically effective—and democratic—path forward.
While we build political support for a clean energy future, Distributed Energy Resources (DERs)—such as rooftop solar panels, fuel-cells, and batteries—are already changing both flows on the grid and customer expectations. These resources enable electricity to be generated and stored close to where it is used, reducing bulk power delivery from the transmission system. Optimizing how and when that electricity is used to meet individual residential, commercial, and community demand reduces generation supply requirements, associated environmental impacts, and infrastructure costs. In this brief post, I explain what such decentralization requires, why it is necessary to meet our 21st century electricity needs, and whether we have reason to believe that publicly-owned utilities will be more likely to support such a move than shareholder-owned ones.
Low Carbon Grids
For more than a century, our energy system has operated by forecasting demand, the amount of power needed in the next day and hour, and then dispatching supply, mainly fossil-fuel generation, to meet that constantly changing demand. Yet grids with a large percentage of wind and solar power turn the operational dispatch paradigm on its head. Today, operators increasingly forecast supply—the amount of wind and solar output available in the next day, next hour, next five minutes—and then manage the demand for power to match that variable supply. In such a system, controllable load and stored power become essential resources. Electrifying buildings, transportation, and industrial processes, as decarbonization requires, greatly increases the amount of power demand that can be controlled to instantaneously match clean energy output, to keep system operation within reliable limits. Low-carbon grids increasingly require bottom-up planning for resource adequacy and supply-demand balance: it is impossibly complex to centralize grid management of the dispersed load of millions of buildings and vehicles and hundreds of industries.
This is not to discount the importance of bulk power. Bulk power delivered from the federally-regulated high-voltage transmission system will continue to be essential: rooftop PV and other local clean generation have the potential to meet only about one-third of total U.S. electricity need. Moreover, large-scale wind and solar resources are less expensive than rooftop PV, and decarbonizing electricity as we meet growing U.S. demand will require building much more large-scale renewables and transmission. But the vast potential of clean, cost-effective DER technologies increasingly makes distribution grids a priority focus for building more resilient, more affordable, more equitable low-carbon electric service—and more public participation in that work.
Decentralized service challenges utility monopolies, both public and private, to compete. DER costs—such as installing rooftop solar and batteries—are falling as grid power becomes both more expensive and more vulnerable to service disruptions. As a result, an increasing number of customers can afford DERs and no longer need the grid. In the short term, self-supply worsens energy inequities and reduces utility revenue, which is why some utilities suppress their adoption by, for instance, requiring lengthy and expensive interconnection agreements and limiting the number of DERs allowed to connect. But over the intermediate term the declining cost, increasing capabilities, and scalability of a wide range of DER technologies likely makes their accelerating deployment unstoppable.
DER technologies enable neighborhoods, office parks, commercial centers, hospitals, and universities to become energy self-sufficient and able to function disconnected from the grid during emergencies. It enables local governments, school districts, Native tribes, and other local entities to form locally owned and operated community electric organizations that are largely independent of traditional utility supply. Such community microgrids are being formed in cities and counties in countries around the world. U.S. examples include the Oakland, CA EcoBlock model for urban neighborhoods and the Bassett-Avocado Heights Advanced Energy Community Project in Los Angeles County.
Many utilities, both public and private, oppose all movement toward decentralizing service. Monopoly control of their distribution systems enables them to slow or block the deployment of DERs and formation of self-sufficient microgrids. Removing this barrier requires providing all resources with open, non-discriminatory access to distribution networks.
Open Access to Distribution Systems
Federal policy requires transmission owners to allow power resources to connect to their systems—which are used to deliver high-voltage electricity from power plants to substations—on a non-discriminatory basis. Before this policy was put in place in 1996, transmission owners often prevented lower-cost resources from connecting, mainly to protect their own, more expensive generation. Open Access to transmission has saved electric customers billions of dollars and has improved the planning and operational reliability of regional grids.
Open Access to distribution grids—which are used to deliver low-voltage electricity from substations to end users—would operate similarly, with the compelling additional benefit of supporting the development of decentralized and much more resilient electric service. Open Access transforms utilities, both public and private, from monopoly service providers into Distribution System Operators (DSO) that provide non-discriminatory access to their distribution networks for non-utility owned resources. Utilities, both public and private, would continue to charge customers for owning and maintaining their distribution network assets, and for serving as Provider of Last Resort to ensure reliable service for all customers. They would also serve to optimize the interaction of DERs, local microgrids, their own generation, and bulk power deliveries to ensure safe and reliable operation, minimize costs and emissions, and maximize resilience. One study, commissioned by the Governor of Maine’s Energy Office, found that a DSO could be designed to achieve cost savings for customers, improved system reliability and performance, and accelerated achievement of the State’s climate goals and growth of distributed energy resources (section 5.5 of the study describes the accompanying bottom-up planning).
Imperatives for reducing emissions add to the case for localizing the management of electric service. A significant share of emissions is under local control—in building standards, land use planning and zoning, transportation patterns, and mobility alternatives. Over the intermediate term, success in meeting city, county, and state emissions reductions targets likely requires energy planning to merge with city planning.
Doing so increases the need for broad public discussion of the issues involved. As Vaheesan notes, this is a crucial dynamic. Success in reducing emissions depends on much more widespread public understanding and support for changing behaviors than exists today. The formation of community, campus, or commercial microgrids brings practical benefits that help more people connect electricity to eco-climate issues, while also opening new avenues for participating in the development of low-carbon electric service.
Twenty-First Century Electricity and Public Ownership
The goals of eliminating emissions, creating capabilities for resilient operation, and equitably transitioning to ecologically sustainable power were not even considered as the grid evolved over the 20th century. To meet these new needs, bottom-up system planning, DERs and decentralized operation appear to be effective and perhaps essential.
Local clean generation and storage reduce both peak demand, facilitating retirement of fossil peaking generation, and the import of bulk power, reducing infrastructure costs. As demand grows with widespread electrification, DERs help minimize system costs by managing loads to optimize energy use. Customer financing keeps DER costs out of utility bills and reduces utility capital spending. As DER costs fall, their integrated generation, storage, and energy management becomes less expensive than utility-procured supply.
Climate disruption and political instability have also made resilience a critical need. Local microgrids provide the ability to withstand, quickly recover from, or operate through fires, floods, and physical and cyber attack, disconnected from the main grid during emergency events. Microgrids can provide all these capabilities in neighborhoods, communities, and school districts, including ones now burdened with pollution from nearby fossil generation.
Are publicly-owned utilities more likely than shareholder-owned ones to replace fossil generation with clean resources and move to bottom-up planning and decentralized, locally-controlled service?
Democracy in Power argues that, with more democratic control, government-owned systems can be made more responsive to public concerns and transformed into a force for decarbonizing electricity. The public power sector is certainly not that today, as the book makes clear—even without mentioning the strenuous, decades-long opposition to energy efficiency and renewable energy mounted by the American Public Power Association, the National Rural Electric Cooperative Association and most of their member utilities. A glance at the NRECA website, for example, with its applause for repeal of EPA power sector rules, shows an undiminished defense of coal power even as coal has become uneconomic.
Other publicly-owned utilities across the country are, however, meeting their customers’ preferences for adding renewables and reducing emissions. But almost all of them continue to operate as monopoly service providers, focused on top-down planning and centralized system control. One might think that public ownership—which should be less driven than shareholder-owned utilities to block DERs that undermine their customer base—would be more welcoming of customer preferences for more resilient and locally-responsive service. The record to date, however, shows that public ownership appears to provide no advantage for the development of distributed resources and decentralized, more resilient operation.
The attraction of taking public or municipal control of utilities is likely to increase, regardless, as customer frustration mounts with affordability, service interruptions, and slow progress in reducing emissions. However, as a thoughtful new paper by Ruthie Lazenby, Sylvie Ashford and Mohit Chhabra shows, the path to public control is often long, expensive, and rarely successful; it instead identifies a range of policy interventions to improve utility performance regardless of asset ownership.
In the current political environment, progress toward clean energy may be best encouraged along two complementary paths: local energy advocates and stakeholders can begin developing bottom-up planning methods (as in the Maine study), educating municipal planners and school districts on the benefits of local energy, and intervening in utility planning processes to advance such planning over business-as-usual methods. That work doesn’t need any permission to start. It can simultaneously help build support for campaigns to win regulatory and legislative approval for requiring utilities, public and private, to provide open access to their distribution grids. Re-directing electricity policy this way offers a practical and politically possible response to public and customer concerns for affordability, equity, emissions reduction, and resilience in the face of rapidly increasing system vulnerabilities.
