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Clean Power Luther College solar

Published on April 22nd, 2014 | by John Farrell

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The Opportunity To Overturn 3 Costly Values In Our Energy System

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April 22nd, 2014 by  

Earlier this year I worked as an election judge for the city of Minneapolis.  It was the city’s second experience with ranked choice voting, a system where instead of voting for a single candidate, you get to pick your top three choices.  If your first choice candidate is mathematically eliminated from winning, your vote is reallocated to your second (or even third) choice.

I tell this story because I feel a bit like a second choice when I’m here to talk to you about campus sustainability when my father literally wrote a book (if not the book) on the culture of campus sustainability, called the Nature of College.

ILSR’s Director of Democratic Energy, John Farrell, gave this presentation at the 5th Annual Conference of the Upper Midwest Association for Campus Sustainability on Nov. 8, 2013. Scroll to the bottom to flip through the accompanying slide presentation.

So I may be a second choice (frankly, I’m my own second choice) but I won’t spend any time second guessing the choice to be here.

I start this conversation about campus sustainability with some of my dad’s thoughts about the struggle between American culture and environmental sustainability.  There are several parallels between the broader cultural tension and the tensions between energy utilities and energy consumers.  In particular, there are three American Values he highlighted as impediments to sustainability that put an unfortunately small value on the environment:  Cheapness, Resourcism, and Silence.

Credit: RevolTee, FlickrValue 1: Cheapness

Cheapness is the notion that things should be inexpensive.  Cheap products tend to fill landfills.  In the utility world, cheapness is not just a value, it’s a business model.  Utility regulations require the use of  “least cost” planning and it therefore becomes the justification for almost every utility action, even when it’s for things that are remarkably expensive.  For example, Xcel Energy in Minnesota just spent over $600 million – twice as much as forecast – retrofitting one of their nuclear power plants.  This “least cost” retrofit will be quite costly to the utility’s ratepayers.

Least cost is also typically a utility’s the first defense against renewable energy, because utilities operate in a bizarre world where we do not account for the enormous health or environmental cost of acquiring and delivering energy.

The real problem with cheapness in our energy system is that utilities use it to cheapen the consideration of alternatives to their way of doing things.

Value 2: Resourcism

Resourcism is another concept that plays a big role in the utility world.  Utilities regularly file “Integrated Resource Plans,” that catalog how we will consume the finite elements of our natural world to generate energy (for the next 10-15 years or more).  These integrated plans dis-integrate environmental values from energy generation and can pretend to be least cost by conveniently ignoring the non-monetary value of our natural resources.

Like cheapness, resourcism is a value that reinforces a utility-dominated model of producing energy from dirty, finite sources.

Value 3: Silence

Silence is abundant in our utility system, which is structured to minimize the “noisy” influence of non-utility actors.  When we worked to enact a solar energy standard this past year in Minnesota, for example, our hardy band of activists was up against an army of paid lobbyists.  When we intervene in proceedings at the public utilities commission, it is a case of non-profit amateurs (like myself) against legions of utility lawyers trying to silence our voice.  And all of us as energy customers are only allowed to order our energy choices from the very limited buffet set by our utility.

In these three values, we reinforce an energy system that talks freely about cost and resources, and yet is eerily silent about the billowing pollution from rampant consumption of finite resources.

sign of hope

This is getting rather depressing.

So I will invoke what my dad called a “hoping mechanism” to deal with this despair.

Hope in a Changing System

The hope arises from the fact that our energy system is changing.  It’s a transformation that’s possible because wind and solar and biomass and other renewable energy doesn’t have to be built on a massive scale or owned by a utility.  Instead, these energy sources can power and be owned by a neighborhood hardware store. They can generate energy for dozens of farmers in a cooperative.  Or they can power a campus from the roof of a dormitory.

And when dozens or hundreds or thousands of us become producers of energy instead of just consumers, we starting thinking less about how much we pay for energy in kilowatt-hours or therms or btus.

We start thinking more about how our energy use aligns with our fundamental values around sustainability; about how the resources we use can be renewable instead of finite, clean instead of dirty, local instead of remote; and we think about how, as energy producers, we are entitled to a voice in the energy system.

Here’s a question that’s at the heart of this change in the energy system: how much do Minnesotans pay each year to import fossil fuels to power their energy system?

The answer is $20 billion

That’s almost 10 percent of the entire state economy.

In a utility-dominated world, that’s simply the cost of doing business.  They would even assert that it’s the “least cost.”  But Minnesota has enough wind, sun, and other renewable resources to supply the vast majority of its energy needs from within the state.  And if the money for that energy stays in the state, it circulates and multiplies within the economy several times over.

Keeping energy dollars in our state means a lot of monetary value, but also a chance to put our values back into our energy system.  And an increasing number of people in Minnesota (also represented by a number of state policies) – and in many other places – are starting to take advantage of the opportunities we have to harmonize our energy dollars and our energy values.

As you might guess, utilities are not very happy  (whoops, wrong slide)  when their customers stop quietly thinking about cost and start thinking how to own and generate power from local, renewable sources.

Their business model keeps churning out new large-scale power plants and transmission lines, many of which have been built on a foundation of erroneous assumptions about growing demand and continued silence about the environmental consequences of a centralized power system. And unfortunately, our regulatory system rewards them for this behavior, frequently granting them a generous rate of return on these ill-fated investments.  A new power plant or power line, for example, often rewards utility shareholders with a 10-11% return on investment.

Raise your hand if you see that kind of return on your investments.  (No utility shareholders in the audience today…)

But the utility’s investment also relies on one other thing: continued growth in revenues to cover the financing and operating costs of these big new power plants and power lines. And right now utilities are facing a devastating one-two punch to this assumption.

umacs talk.011Audience note: we are now getting to the juicy chart section.

The first is that the Great Recession largely killed the growth in energy sales.  Normally as the economy picks back up, so does energy consumption, but that’s not happening this time, probably because many states have now enacted energy efficiency standards requiring utilities to make use of their lowest cost resource.   (Funny how it takes a state law to make sure that utilities ostensibly focused on “least cost” actually invest in their least cost resource.)

The second punch is from the rise of local renewable energy, competing for that remaining pool of energy use.    The solar energy I get from my roof, for example, is energy I don’t buy from the utility.    If enough customers produce their own power, utilities won’t have enough revenue to cover the costs of operating power plants or power lines built with the assumption of everlasting growth in energy use.  The utility’s only recourse is to raise rates, to make more money off their existing energy sales.    That, in turn, makes alternatives to utility-delivered power (like my rooftop solar array) that much more attractive.  umacs talk.016As you can see, by 2020, Minnesota utilities have a major economic problem on their hands as the cost of solar electricity (in yellow and orange) slides below the cost of electricity from the utility (the dotted lines).

In other words, the utility business model is under serious threat from communities  (e.g. colleges like St. Olaf or Oberlin or U of M Morris or Luther) that are focused on taking control of their energy future. One article from GreenTech Media this summer bluntly suggested that utilities must “Adapt or Die,” in a world where their former customers are becoming energy producers.

The problem for utilities is only getting worse.  The cost of on-site energy like solar is falling so fast that within the next decade,  solar could provide lower cost power (without subsidies) to over 38 million people and to consumers in nearly every state.  In 16 states, solar could provide more than 10% of the electricity at prices lower than the utility offers.

And therein lies the opportunity.  Utilities are increasingly recognizing that they cannot continue to rely on selling energy, which homes, businesses, or colleges can provide for themselves.

Communities That Can Take Advantage

And colleges, as communities, are uniquely suited to take advantage.

umacs talk.020First, they are educational communities.   Wendell Berry suggested that, when working most effectively, a  “teacher ceases to function merely as a preceptor and becomes an example–an example of something, good or bad, that his [or her] life has proved to be possible.”  By their energy choices, colleges will model how sustainable living is or isn’t achieved.  Students, staff and faculty will learn something about the opportunity for energy sustainability from their college, whether or not it’s intended.

Colleges are also mission-driven communities, which means they can challenge the American values of Cheapness, Resourcism, and Silence with values like Renewable, Local, and Democratic. It also means that colleges can be held accountable if the example they provide is not in harmony with their values or their their mission.

But at their best, colleges can also be energy communities.  They can fulfill their educational mission by being examples of sustainable living and generating their own power.  Colleges can also generate power by helping organize to change the rules and regulations of the energy system to make it easier to transition from dirty energy to clean, and to let more people transition from being energy consumers to producers.

And it starts with those three alternate values I just mentioned.

Alternate Values: Renewable, Local, Democratic

Renewable we all understand, but the other two values are just as important in developing an energy system that resonates with our concept of sustainability.

A local energy system is a value.  It is one that does not extract resources from a distant place, but rather taps the resources within our community – natural, human, or financial – and builds them up to allow the community to be more environmentally and economically sustainable.  It also does not require the centralization of capital or ownership because the scale of the energy system is commensurate with the scale of the community, and within the economic potential of the community to construct and own.

A democratic energy system is also essential.   It means that anyone has the potential to generate their own power, whether individually or collectively.  It means that an energy system built on widely dispersed and community-scaled power plants should be governed by widely dispersed and community-scaled institutions like cooperatives or cities, not corporations.

Building an energy system on these values may seem idealistic, but it may be the only way to respond quickly enough to our most pressing sustainability challenge: climate change.  That’s because climate change itself has become a hotly contested political issue, causing gridlock when we need the pedal to the floor.

But local and democratic renewable energy can cut across politics.

In Georgia, when the public utilities commission was debating a new solar program by the state’s largest utility, the resulting program exceeded all expectations because of a collaboration called the Green Tea Coalition. It brought together environmentalists with the Tea Party to insist that residents of Georgia had a right to produce their own energy from solar and that the utility needed to allow them that energy freedom.

germany-people-powered-2012.003And as these Tea Partiers put solar on their roofs and garages and churches, they will transform from climate deniers to clean energy voters, but only so long as the rules we write give them the chance to be their own energy producers.

So it’s not enough to pass a renewable energy standard that leaves the work (and profits) in the hands of utilities, when we examples of energy programs like Germany (they call it a feed-in tariff) that has put half of the country’s wind and solar energy in the hands of ordinary people.  It’s not enough to offer tax incentives for renewable energy that work well for corporations, but leave cooperatives and nonprofits and colleges without the same opportunity to own renewable energy systems.

That means that as we advance the notion of campus sustainability, it’s not just about generating power for a campus (or composting, or other inward-facing initiatives). It must also be about generating power from campuses to create a sustainable energy system.  A system that embodies the core values of sustainability, that creates policies that maximize local and democratic energy, and that gives us a fighting chance against climate change.

Are we up to the challenge?  I’ll leave you with this thought from Jim Farrell:

If God had wanted us to live sustainably, she’d have given us brains.

Thank you

——————————

Campus Power: Tapping Local Energy Toward a Sustainable Future from John Farrell

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About the Author

directs the Democratic Energy program at ILSR and he focuses on energy policy developments that best expand the benefits of local ownership and dispersed generation of renewable energy. His seminal paper, Democratizing the Electricity System, describes how to blast the roadblocks to distributed renewable energy generation, and how such small-scale renewable energy projects are the key to the biggest strides in renewable energy development.   Farrell also authored the landmark report Energy Self-Reliant States, which serves as the definitive energy atlas for the United States, detailing the state-by-state renewable electricity generation potential. Farrell regularly provides discussion and analysis of distributed renewable energy policy on his blog, Energy Self-Reliant States (energyselfreliantstates.org), and articles are regularly syndicated on Grist and Renewable Energy World.   John Farrell can also be found on Twitter @johnffarrell, or at jfarrell@ilsr.org.



  • Rick Kargaard

    Coining words like “resourcism” doesn’t help my understanding of your position. Using “cheapness” as a descriptive also leaves me wondering if you mean lowest cost or affordability. And what the heck is a “climate denier?”

    That said, I think you are beating a dead horse. No, I didn’t coin that, but the phrase is a little archaic.

    I am pretty certain that many forms of renewable energy, and particularily on site generation, is already more affordable than than fossil fuel derived electricity. Wider use only awaits available investment.

    The cost, basic and external, of producing and burning fossil fuel, continues to rise, while the capital cost of wind and solar continues to decline.

    The major hurdle for wind and solar is finding sufficient capital investment, and expecting a 10% return on that investment is not unreasonable. Many home improvements to efficiency can return that or more. An off grid solar installation can, in many instances, also give these returns. The calculations are complicated and different for every case.
    In my own case, efficiencies in my home are enough that payback times for going of grid are too long, at least at current electricity costs and current system costs. More attention to efficient homes and transportation could reduce greenhouse gas emissions much faster than any mega project. They are also very cost effecftive.
    More time and effort should be spent on educating the public and encouraging less energy use, rather than berating the current energy providers. Most of them will see the writing on the wall and switch as quickly as their budgets allow. I don’t think you will see many coal fired plants being built in the future.

  • Will E

    How much do Minnesotans pay each year to import fossil fuels?
    the answer. 20 BILLION DOLLARS EACH YEAR to burn. in 10 year 200 BILLION
    and this money is burned. to burn 20 billion dollars a year in Minnesota is crisis.
    Solar Power and Wind Power produce for 30 years, no burns.
    and save 20 billion a year.

  • Banned by Bob

    A friendly suggestion.

    Just because someone doesn’t buy into AGW doesnt mean that they won’t be supportive of Renewables. There are plenty of examples to disprove that line of thinking. Try to emphasize the positives with someone from Tea Party or whatever affiliation. Independence. Reduced dependency on foreign/hostile producers. Just sticking the “denier” label on someone may feel good but it is not a very productive technique in winning people over to your way of thinking. Think like a marketer.

    • Omega Centauri

      A good suggestion indeed. We need a broad spectrum of people to become part of the solution rather than be part of the problem. Appealing to AGW may be a strong motivator for some, but a turnoff for others.

      Now to be fair to teh author, he did mention a sort of local economic boosterism (a state based version of economic nationalism), keep the money within the state.

      • Mark Jamison

        In Georgia a group called the Green Tea Party has formed in order to encourage distributed power(generally renewables) over current dependence on concentrated power(generally non-renewables). I agree with Banned by Bob. Think like a marketer. Know your audience. Talk about your cause in terms of your audience’s morality not your morality. Recently on the Commonwealth Club Climate One podcast an activist recited a great quote: “Morality both binds and blinds us.” Therefore, in order to change an audience’s behavior you have to work with the morality of the audience your trying to persuade. Name calling feels good and may solidify social bonds among your inner circle, but those who are being bullied by name-calling just hold on to their behavior in defiance of the bullying. Moreover, perhaps your inner-circle has friends in the opposition. Demonizing them doesn’t help your standing with those in your inner-circle. A big tent welcomes all.

    • Doug Cutler

      I believe there’s a story right here at Cleantechnia about Glenn Beck’s ranch house covered in solar panels.

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