Public Power and the Energy of Hope

Take a moment to imagine where your electricity comes from.

Disconnect the switch, grab onto the wire, follow the current of fizzing electrons out of the house and into the transformer. Shoot like lightning up the high voltage transmission lines that cut wide swaths through forests and fields, crackling and humming, smelling like ozone. In an instant, hundreds or thousands of miles have passed, and the heart of the system lies ahead -- a power plant with acres of furnaces and boilers, turbines and generators.

That power plant, churning at deafening decibel levels and at thousands of degrees Fahrenheit, exemplifies why our electricity system has become one of the dirtiest, most environmentally destructive industries on the planet.

Today, virtually all electricity comes from a process that hasn't changed much in over a hundred years. Fifty percent of power plants burn coal, 20 percent burn natural gas, and another 20 percent split uranium atoms, all to create heat to boil water. This yields high-pressure steam, which pushes a turbine that turns a generator to create the electricity that flows out over miles of transmission lines into the power grid.

Visiting a power plant in Pittsburg, California, one cannot help but be overwhelmed by the forces at work. The heat and the noise feel like some subterranean volcanic world. A steam explosion has blown out a chunk of one tower, scattering twisted metal everywhere and leaving one generator off-line for over a year. Not much grows here between the cooling towers, the fields of concrete and fuel tanks, and the miles of pipes and wires.

According to the US Environmental Protection Agency, electricity generation is the largest single source of greenhouse gas emissions in the US, accounting for 30 percent of all such emissions in the 1990s, compared with 26 percent from vehicle emissions. And burning coal also produces toxic particles of cadmium, aluminum, lead, nickel, and sulfur, much of it falling on working-class communities like Pittsburg.

But environmental degradation is not the only problem with centralized fossil fuel and nuclear generation: the system is also just plain inefficient. Back in 1976, Amory Lovins was already documenting the waste. As public power activist Daniel Berman explained in his and John O'Connor's 1996 book, Who Owns the Sun?, Lovins calculated that burning fossil fuel and then shipping power over high-tension wires squanders about two-thirds of the fuel's energy -- to heat loss in generation and power loss as the electricity travels over miles of cables.

Local Power

There is a viable alternative to such a system, with its stretched capacity and threat of brownouts. As early as 1970, solar power was advanced enough to inspire an entirely different model: independent homeowners and communities generating the power they need, right on top of their homes and businesses. Like the Internet, with its tens of thousands of independent nodes that couldn't all be destroyed at once, a network of small solar, wind, and other power sources would provide not only cleaner energy, but regional power self-sufficiency and a much more stable power system overall.

So-called distributed generation could be based on an array of renewable power sources, like wind and small-scale water turbines, and photovoltaic (PV) cells. PV panels, the source of most solar electricity, generate power when light strikes them and knocks loose electrons from silicon in the panel. They are not without their own environmental consequences: the silicon is treated with toxic compounds like arsenic, gallium, or cadmium, but 70 to 90 percent of these expensive substances are recaptured during manufacturing.

In the solar distributed generating scenario, the fuel source is free for the taking, an enterprising institution can sell its surplus power to whoever needs it, and a network of small-scale, widely dispersed power generators makes for a much more secure power grid than one that's dependent on a few big plants.

And yet we still depend on a few big plants. Where is the distributed network of small-scale solar power?

To some extent we're getting there. Worldwide production of photovoltaic cells jumped 20 percent per year between 1995 and 1999, much of the growth in developing countries, which often lack the infrastructure for central plants and where household power needs are very low. Most informed observers expect the 20 percent annual growth to continue for some time. Despite the growth, however, photovoltaics and other solar and wind sources remain stuck at just 1 percent of world power production. With our already massive electricity consumption increasing at about 2 percent annually worldwide, even if solar grows by 20 percent a year, it will take 45 years just to meet new demand, let alone cut into existing fossil fuel consumption.

With consumer-level solar installations running up to $20,000, solar power in the US seems to be the province of wealthy homeowners or off-the-grid homesteaders who have no alternative if they want electricity.

In California, as elsewhere, this cost is an obstacle. The wholesale price for natural-gas generated electricity, sold by a generator to a utility or independent power seller, generally runs between 4 and 8 cents per kilowatt-hour, although it has recently risen to as high as 11 cents per kilowatt-hour. Consumers buy their power from the utilities for 10 to 13 cents per kilowatt-hour. But photovoltaic power runs about 25 cents per kilowatt-hour, according to Dan Kammen of the Energy and Resources Group at the University of California, Berkeley. That price is coming down, and there are incentives to go solar, but the price remains high.

Why is solar so expensive and natural gas so cheap?

Not surprisingly, the answer is not only about technology. It is about politics and profits. In the past, utilities both generated and distributed power, and the last thing they wanted was a movement of small-scale solar and wind generators cutting into their monopolies. In Who Owns the Sun?, Berman recounts that when solar first became viable, "If you wanted to put a PV on your roof, they used to say you needed a special meter to measure (your output). It cost about $15,000. It was a disincentive."

Now, as a result of deregulation, power plants are increasingly run by independent generating companies, while utilities are paid fees to maintain the grid, and purportedly will neither sell nor generate power. But little has changed. "It's a shell game," says solar installer and Home Power magazine columnist Don Loweburg. "Every utility holding company has an unregulated subsidiary that handles generation." Utilities simply sell off their holdings in one region where they are heavily regulated, and buy up plants in another where they aren't. They remain in the business of controlling supply and selling power. And the harnessing of sunlight remains a threat for obvious business reasons: "Utilities and generators, like PG&E or Enron, don't want solar, because they want people hooked on the natural gas they sell," says Berman.

Because it is not in the utilities' interest to help renewables compete with large centralized power plants, they rarely provide significant incentives. As long as only a few people can afford them, few solar panels are constructed and so the price remains high, especially when compared to natural gas rates. Unlike solar energy, fossil fuels benefit from taxpayer subsidies and externalized costs of $1.5 trillion to $3.3 trillion annually, according to public interest researcher George Draffan, who compiled figures for Climate Solutions in 1997.

The federal government could help -- by mandating PV for new buildings and major renovations, for example. "Ralph Nader has argued for decades that if the federal government applied the same policies they adopt for other emerging technologies like computer chips they could play a critical role in new energy models," Berman told Terrain. "If the military said, 'Okay, we are going to buy a lot of these things,' then the price per unit would come down because there would be a guaranteed market and they will be able to build big factories."

Manufacturing solar panels is capital-intensive. It requires a massive up-front investment, an infusion of resources to mass-produce cheaper panels.

Nuclear power was made possible by billions of dollars in government tax breaks, financial bailouts, waste cleanup assistance, and promises of limited liability. "If everyone was doing solar, we'd be producing PV panels assembly-line fashion just like cars," Berman says. "But it needs to be mandated." Few people, Berman points out, would pay $5,000 to voluntarily install a catalytic converter on their car. "(But) now that they're mandatory, they cost only $500 apiece, everybody uses them, and they have cut air pollution." In Israel, Berman says, the national building code requires solar water heaters, and 90 percent of the buildings have them.

In this country, such reform would break an energy grip first held by the Standard Oil monopoly; defensively tightened when Ronald Reagan gutted Carter-era federal solar research and tax credits; and maintained as Reagan-Bush policies kept oil prices just low enough for high consumption - and just high enough for corporations to get rich selling the fuel.

Lowering the price on solar energy would have major consequences for the utilities' plants: they could become obsolete.

To understand this, we need to see the journey from the outlet to the power plant divided into two parts -- distribution and transmission. Distribution, the network of wires from your outlet to towers outside of town, covers the small scale of a city's local power lines and remains in the hands of either private utilities like PG&E or public power agencies like those in Sacramento and Los Angeles. The second level is transmission, where large amounts of power move over high tension wires on 100- to 150-foot towers, from city to city and region to region.

To make money off the enormous and expensive grid, an energy supplier needs to sell large quantities of power. "The value of power diminishes as you move farther from the point of use," Loweburg says. If your markup is small on each bit of power you sell, then you must sell a lot of power to profit. Also, power is lost as heat off the wires and in transfers from the plant to the transmission system, and then to distribution. "On the other hand," says Loweburg, "if you're at the local level of distribution, the scenario changes." No go-betweens mark it up for profit, and you lose less power, since it doesn't travel so far. Solar power generated at the point of use leaves no need for expensive transmission lines and massive utilities. "That's why utilities don't like this," Loweburg says. "There's nothing in it for them. We would still need a power grid, but it would be mostly local."

Not only can photovoltaics be installed at the point of use, but they can be built at any scale. Unlike a coal-fired power plant, a large PV installation is simply a collection of small ones. So, while you wouldn't put a fraction of a coal plant in your basement, you lose nothing by shrinking a PV installation to fit on your roof -- and you don't have to buy new real estate or install and maintain high-voltage wires, as you would for any centralized plant.

In the 1980s and early '90s, well aware of the competition, utility companies tried to take control of the solar market with large-scale photovoltaic installations like the 6-megawatt PV installation on the Carrizo Plain near San Luis Obispo. But these solar power plants, along with other slightly smaller ones, are being sold for scrap or left to rot. The power wasn't cheap enough to sell on the wholesale transmission market.

The very notion of a giant, centralized power plant may simply be made obsolete by solar power. To build a centralized solar plant, you need real estate, high-tension transmission wires, a whole dedicated maintenance staff -- things that you need for any big plant. But for small-scale solar in buildings, on existing rooftops, and otherwise scattered across the landscape, you need none of these. We could have distributed generation, with thousands of small-scale power sources knit into locally self-sufficient networks. A house, a neighborhood, or even a whole city equipped with photovoltaics and wind power could escape the utility and power cartels altogether.

Money to Burn

According to World Bank reports, worldwide electricity consumption has grown by 57 percent since 1980, driven by both higher population and higher per capita use. Since 1990 in California, electricity generation increased by almost 9 percent, with wind and solar making up just 1.5 percent of the state's total.

But this year, the state's supply has been too low to keep up with racing consumption, and power prices have ballooned. The front-page news has reported rate shocks, proposals for makeshift power plants, and consumer protests brought on by a wave of profiteering among deregulated fossil fuel-centered utilities and independent generators. Even industry insiders agree that power generators have been driving up prices in ways that are barely legal. As Loretta Lynch, president of the state Public Utilities Commission, told the San Francisco Chronicle in August, "All the market participants are taking advantage of very lax rules. The market is not competitive."

When California lawmakers approved deregulation in 1996, they claimed it would lower prices and even spur innovations in power generation, including a new market for "green" energy providers like Green Mountain. Residential power use accounts for only 30 percent of state consumption, and four years after deregulation, only 1.2 percent of residents have switched to green energy providers.

Deregulation was supposed to create a vibrant free market with many power providers competing for customers, but that has yet to appear. Instead, about six generators supply 75 percent of the state's power, according to an August 10 San Francisco Chronicle article. In San Diego, the first area to buy its power in a fully unregulated market, rates have more than doubled. "Billions of dollars have been spent on a social theory that privatization will make electricity cheaper," says Berman. "As if no one had ever heard of cartels."

In every region of the country, big power companies are merging in unprecedented numbers. Records from the Federal Energy Regulatory Commission show that the commission has approved 47 of 54 merger applications since 1995. "No one ever discusses the fact that the electricity cartel is reconstituting itself in a way bolder than it was in the 1920s," says Berman. "You're going to have five utility companies by 2010. And they're investing all over the world."

And under deregulation, prices have not gone down: Since 1997, according to The Wall Street Journal, wholesale electricity prices have skyrocketed in states where they have been deregulated, up 162 percent in California, 89 percent in Florida, and an astonishing 293 percent in Texas.

The utility companies will tell you that the problem is supply. They may be partly right. The Chronicle reported in August that electricity use in California hovered closer to full capacity than at any time in the past decade, leaving the power system especially vulnerable to a single plant failure or damage to transmission lines.

The utilities' answer is to build more plants. According to the California Energy Commission, responsible for approving fossil fuel plants, 25 big new power plants are slated to be built in the state, all of them over 500 megawatts -- all of them powered by natural gas. Governor Gray Davis has tightened the timeline for state agencies to respond to applications for new plant construction, a process that had been open-ended.

Between 1983 and 1998, according to PG&E's own figures, the utility increased electricity prices for industrial users by only 3 percent, while raising small-commercial rates 53 percent and residential prices 80 percent. The utilities are afraid that their biggest customers, just a few of which can justify a new power plant, will abandon the utilities and move toward cogeneration, making their own power with efficient gas turbines or with waste heat from their own manufacturing activities. So PG&E wrings profits out of regular people while cutting deals for industry. "The only serious alternative to the monopolies is public power," says Dan Berman.

Nowhere is that clearer than in Sacramento. Twenty miles south of the city, the Rancho Seco nuclear plant sits neglected, towering over a field of 20,000 shiny blue panels. The PV panels sit quietly converting sunlight into electricity as they have for the past decade.

The citizens of Sacramento voted to shut down the nuclear plant in 1989; it hasn't generated a spark since. A costly boondoggle from the start, it nearly destroyed the Sacramento Municipal Utility District (SMUD). As Berman points out in Who Owns the Sun?, Rancho Seco became the only plant in the world to be shut down by popular vote, and it left a big hole in the district's energy supply. Part of that hole was filled by the solar cells that now surround the plant.

SMUD has been a leader in urban solar use ever since. In 1993, SMUD started its PV Pioneers program, which encouraged homeowners to pay a monthly fee to have the utility district install and maintain solar panels at their homes. Now district residents can buy photovoltaic packages at highly subsidized rates, and all participants get a full energy audit to help identify ways to reduce home energy use.

In the wake of deregulation, the state has also started a solar subsidy program using surcharges to customers of private utilities like PG&E, but this program provides smaller incentives than those in public power cities like Sacramento, Palo Alto, and Los Angeles. In Palo Alto, the PV Partners program pays residents $4 per watt for new solar capacity, 25 percent more than the state pays. Lindsay Joye, the PV Partners director, says the state program is simply too large and too slow: "It's been three years that they've been talking about a publicity campaign for the state program, and I have yet to see or hear any ads." Joye's program is already reaching local people. "We are responsive to local interests; we do local education and tours," she says.

Robert McKinney, director of the solar program for the Los Angeles Department of Water and Power, tells a similar story. "We really aren't profit-motivated," he says. "We're basically here for the benefit of the people of the city of Los Angeles, and where there's more activity going on, you're going to get more innovation."

Innovation in Los Angeles has meant a new program, started on September 1, that aims to put in 100,000 rooftop systems by 2010, with incentives that can pay for over half a system's cost. "There's several hundred thousand homeowners out there," McKinney says. "We could make quite a dent in power consumption if 300,000 homes supplied 10 percent of their power through solar."

According to Los Angeles Water and Power, a typical two-kilowatt home system will avoid the need to burn 3.7 tons of coal each year, keeping 10,000 pounds of carbon dioxide and other greenhouse gases out of the atmosphere.

But McKinney concedes that he'd be happy to help pay for even 500 to 600 new systems a year for the next five years, a long way from the lofty 100,000-home goal.

Any increase in demand will help bring prices down. UC Berkeley's Kammen predicts that solar will participate in the same kind of price drops seen in other high-tech sectors: "Photovoltaic electricity could easily go to 3 to 4 cents per kilowatt-hour in the next 20 years. And at those prices, it won't make sense to install anything but photovoltaics," he says.

But with add-on solar panels still a luxury item even in public-power cities like Los Angeles, Berman and others see the future in building-integrated solar technology, where shingles, siding, and glass are all engineered to generate power. A new skyscraper going up on the corner of Broadway and 42nd Street in midtown Manhattan is covered, not in the typical marble or jet glass used in high rises today, but in glass embedded with thousands of photovoltaic cells. Since this glass costs less than the materials it displaces, the electricity generated from sunlight is free.

Standardized solar building materials are part of the crusade of George Ingham, owner of a Canadian solar and electrical company. Ingham is working to convince the International Brotherhood of Electrical Workers to make solar panel installation a mandatory part of its apprenticeship program. "In America we have some 340,000 trained electricians that are available for this work," says Ingham. "What we have to do is make sure that they are trained for it."

Ingham is working with the electricians' union, and with national groups of architects, contractors, and engineers, to make sure that the construction industry is ready to install the newest solar technology, and that solar manufacturers make products that work on the widest scale. "We're trying to work in a collective way to enhance building in America," he says.

"You've got to change building codes, like they did in Israel, where solar water heaters are required," Berman says. "That's how you reach regular people as housing stock is rebuilt. And it's like any other political struggle; you've got to fight for it."

Joe Fortier contributed research and writing to this article.


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