Solution to Energy Woes? Try Localization

Who says history doesn't repeat itself?

On November 9, 1965 at little past 5 p.m., some 30 million people in eight Northeastern states and two Canadian provinces were plunged into darkness. Hundreds of thousands of people found themselves trapped on immobilized New York City subways or stuck in elevators. Automobiles slowed to a crawl when traffic lights stopped working. Millions of people remained without electricity for as long as 15 hours.

Initially, the possibility of sabotage was considered. Eventually it was determined the disturbance began because of a faulty setting of a relay and the resulting tripping of a heavily loaded transmission line feeding power into Toronto. The resulting surge of power from Canada into the United States overwhelmed transmission lines in western New York and resulted in the unprecedented widespread blackout.

The nation responded to the 1965 blackout by establishing the North American Electric Reliability Council (NERC) and investing significant resources to improve the oversight and control of our grid systems. The effectiveness of these investments was undermined when, in the 1980s and 1990s, the federal government enacted rules that encouraged more and more electricity to travel further and further, stressing already stressed and complex grid systems.

But that didn't stop regional outages. In August 1996, another multi-state blackout occurred in the Pacific Northwest. Then, a handful of electrical lines in southern Oregon sagged in the summer heat, initiating a chain reaction that cut power to more than four million people in nine states.

Today, as in 1965, federal officials are echoing the prescriptions of their predecessors: fortify a system that's likely to fail again.

President Bush, traveling in California, told the Associated Press, he "suspects the nation's electrical grid will have to be modernized." Meanwhile, the NERC, The Washington Post reported, wants up to $20 billion to build more high voltage transmission lines to strengthen the current system.

But electrical engineers will tell you that increasing the electrical interdependence of different parts of the country only increases the potential for large-scale power system failures.

Utility executive Gregory S. Vassell wrote in 1990, "The natural limitations in the spread of the 1965 disturbance, brought about by the tripping of the then weak transmission links between the Northeast and other areas, may or may not be operative in today's circumstances. Thus, a major cascading power failure -- once triggered in one part of the country -- could spread to a much larger geographical area today than it did in 1965." The extent of this week's blackout proves him right.
Instead of pursuing strategies that have failed in the past, government at every level should embrace an alternative: local power generation. Rather than spending tens of billions of dollars to allow electricity to travel in ever-greater volumes over ever-longer distances, we should install millions of power plants in office buildings, apartment houses, factories and households across America.

We already have an industry that builds on-site power plants. Hospitals, for example, are required by law to have emergency backup systems. This week, they were oases of light and coolness in New York City. Hundreds of thousands of backup systems could be upgraded to become functioning parts of the local electricity grid.

Moreover, because of the increasing unreliability of the existing grid system, growing numbers of high-tech, information intensive businesses are installing their own power systems. These generators produce higher-priced electricity, but when the economic losses from a regional blackout can run into the millions of dollars, these businesses have come to view such safeguards as a worthwhile and even essential investment.
Fuel cells, rooftop solar devices, micro-generators are all available in growing quantities. Installing these devices not only makes the electricity grid more reliable, because it will reduce the stress on transmission lines. It can also make power systems more efficient. Today giant power plants waste two-thirds of the fuel they burn. It is given off as waste heat. But on-site power plants can use that waste heat, thereby doubling or even tripling the amount of useful work we generate per unit of energy consumed.

The technology is here. But the political will and regulatory structure is not. Today the rules encourage long-distance transmission of electricity and the construction of large power plants. The varying energy bills recently passed in the Senate and House look to further pre-empt the authority of local and state governments to involve themselves in electricity planning. The result will be an even more centralized and long-loop system.

We need to adopt a bottom-up approach. We need to establish rules that will channel entrepreneurial energy, investment capital and scientific genius toward building a two-way electricity system, one in which millions of households and businesses become producers as well as consumers. We need to develop the rules that will enable and encourage a distributed, decentralized, democratic electricity system.

Any energy-related bill that originates in Washington will constitute a major step backward. By its nature, federal energy policies encourage national, read, "centralizing" strategies. Both parties support a federal energy policy that accelerates the construction of large power plants and high voltage transmission lines and the creation of un elected regional and national bodies whose job it will be to advocate for such construction.

A federal energy policy invariably preempts state and local authority. It lengthens the distance between the energy user and the energy producer and separates by ever-longer distances those who make the decisions from those who feel the impact of those decisions.

Opposing a federal energy policy from the top down does not mean opposing a national energy policy from the ground up. On the contrary. A key characteristic of renewable energy and one of the reasons it is so popular, is that it is a decentralized and decentralizing fuel source. Rooftop solar cells, farmer-owned ethanol plants and wind turbines - these are the technologies that will inhabit a renewable future.

Happily, state and local initiatives in this regard are occurring. Indeed, in the last five years states have begun to design a much more appealing and powerful energy policy than anything contained in either the Democratic or the Republican energy bills.
Many environmental groups consider a federal renewable portfolio standard a centerpiece of the Senate energy bill. Such a law would require all utilities to generate an increasing proportion of their electricity from renewable energy. Let's ignore for the moment that this provision is almost certainly going to be excised in the Conference Committee. More to the point, a national renewable electricity standard is already emerging from the bottom up. Thirteen states with almost half the nation's population have enacted such mandates. Many more may soon do so.

A federal renewable electricity standard might be welcome but it is not necessary. Moreover, it has its drawbacks. The Senate version, which requires a 10 percent renewable percentage, preempts state standards. That would overrule Nevada's 15 percent standard.

The centerpiece for Senator Daschle and many midwestern legislators is the renewable fuel standard. This provision, contained in both the House and the Senate bills, require the oil companies to sell five billion gallons of ethanol by 2012.

Again, this is a worthy initiative. But actions at the state level have already moved us more than half way there as of mid-2003. Fourteen states have begun phasing out MTBE, a widely used gasoline additive that contaminates local water supplies. As this occurs, ethanol use will rise, probably exceeding 3.5 billion gallons by 2005.

Two years ago California's vehicles were using nary a drop of ethanol. Today they are consuming more than 600 million gallons a year. New York and New England may soon begin to match those numbers as they phase out MTBE.

Even when it comes to research and development, states are viable alternatives to federal agencies. In the wake of deregulation 23 states assess electricity users a small sum to fund energy efficiency and renewable energy initiatives. This year these funds will spend more than $2 billion, a sum that rivals what the federal government is offering (outside of the federal weatherization program).

The only aspect of the federal energy bill that is not and cannot better be accomplished at the state level is a national tax incentive like the wind energy production tax credit. Yet here such bipartisan support exists that an extension could easily be attached to a far less controversial and damaging piece of legislation.

One shouldn't be pollyannish about state actions. Progress in expanding renewable electricity and renewable fuels has come slowly, at much sacrifice, and only in fits and starts. State budget deficits have led some states to rob from their renewable and energy efficiency funds.

Yet it is at the state and local level that the scale of the problem and the scale of the solution are commensurate. It is at the local and state level that the energy sources available - sunlight, wind power, geothermal, biomass - are also the most popular energy sources. It is at the local and state level that factors such as job creation and economic development can be taken into account, as well as the more qualitative psychic rewards that come from being independent not only of OPEC but of one's increasingly remote electric company.

Federal energy policy rarely values regional or local benefits; state energy policies often do. For example, state ethanol incentives often are designed to encourage small scale, farmer and locally owned biorefineries. The federal ethanol tax incentive, on the other hand, tends to favor larger absentee owned ethanol facilities.

During the August recess, the Democratic Party would do well to reconsider its fixation on a national energy policy. When the vandals got the handles at the federal level is not the time to give them access to the energy pump.

David Morris is vice-president of the Minneapolis and Washington, D.C., based Institute for Local Self-Reliance and author of Seeing the Light: Regaining Control of Our Electricity System. See NewRules.org for more related information.

© 2003 Institute for Local Self Reliance