An Electric Revolution: Reforming Monopolies, Reinventing the Grid, and Giving Power to the People

8/8/2019 An Electric Revolution: Reforming Monopolies, Reinventing the Grid, and Giving Power to the People

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Reorming Monopolies, Reinventing the Gridand Giving Power to the People



A Eer Re is sponsored by the non-prot Glvin Electricity Inititive.

The Inititive, lunched by former Motorol CEO Robert W. Glvin with former EPRI CEO

Kurt Yeger, hs brought together mny of the ntion’s leding electricity experts to reinvent

our electric power system into one tht is fundmentlly more ffordble, relible, clen nd

energy-efcient. The Inititive hs creted innovtive business nd technology blueprints for

the ultimte smrt grid — the Perfect Power System. Bsed on smrt microgrids, the system

meets the needs of 21st century consumers nd provides relible, secure electricity regrdless

of nture’s wrth or security threts.

To pve the wy for Perfect Power nd system trnsformtion s whole, the Inititive is

dvocting for new policies tht reect set of guiding principles — the electricity consumer’s

bill of rights. For more informtion on the Electricity

Consumer Principles, the policy frmework or the Perfect

Power System, visit www.galvinpower.org. Here you will

nd n rry of informtion on every dimension of the

intelligent grid trnsformtion nd the Inititive’s gol of

perfect electricity service for every consumer.

About the Author Jay Suller has writen 10 books and more han 1,000 aricles in publicaions ha include

Smithsonian , Audubon and Reader’s Digest . He concurrenly spen nearly 25 years a Chevron— wriing is annual repor, for is employee magazine and speeches for he Chairman of heBoard. Sul ler is a co-auhor wih Bob Galvin and Kur Yeager of Perfect Power: How the Microgrid

Revolution Will Unleash Cleaner, Greener, and More Abundant Energy.



Reforming Monopolies, Reinventing the Gridand Giving Power to the People

b y J ay S t u l l e r





A 1776 Energy ..................................................................................p. 5 With an aging, unreliable and inecient electricity system at a critical inectionpoint, America can rebuild what now exists, or with a revolution in regulations andtechnologies, reinvent it to meet 21st century needs.

A Natin in Peril .................................................................................p. 13 Afer a decade that shaered American condence, the transormation o the electricity

system is a long-overdue project that takes advantage o the nation’s historic and presentstrengths and creates the oundation or a truly sustainable uture.

Te Edisn Parad ............................................................................p. 19Even as it powered U.S. growth, the electricity system included seeds o stagnation.Ironically, the ideas o Tomas Edison — who ailed to win “the war o the currents” inthe late 1800s — provide a model or a new power grid.

Micrgrids: Were Tecnlgy and Cnsmers Cnnect ..................p. 25Intelligent microgrids — encompassing large buildings, oce parks and entirecommunities — can incorporate alternative power generation and provide lessexpensive electricity to consumers.

Giving Cnsmers Tre Pwer ...........................................................p. 29

rue reorm is driven by an electricity bill o rights that puts the needs o consumersrst, while ensuring that environmental, economic and social benets ollow.

A Primer n Rerm ............................................................................p. 35 Although electricity is a complicated industry, the steps needed to change the system

are clear and straightorward.

An Incnvenient Eperiment ..............................................................p. 39 An ill-conceived Caliornia scheme that only partial ly deregulated its electricity systemis ofen cited as an argument against change.

Grains Sand ....................................................................................p. 43 In several states, intelligent community microgrid demonstration projects, includingsmart meters, are proving their value.

A Call t Actin ...................................................................................p. 49Individuals, businesses and civic ocials can bring orth an electrical transormationthrough innovative leadership, civic discourse and inormed votes.

Wat Y Can D ................................................................................p. 52

Sggested Reading ........................................................ inside back cver

t a b l e o f C o n t e n t S





A 1776 of Energy

S

“. . . a long habit o not thinking a

thing wrong , gives it a superfcialappearance o being right . . .”

o wrote Philadelphia journalist Tomas Paine in

January o 1776, in the frst line o Common Sense , a

treatise that crystallized Colonial grievances against

Great Britain and its monarchy, reinorcing American

resolve or independence. Much o the propositionocused on the “absurdity” o hereditary succession.

Paine also noted that while England had been ruled

by a ew good monarchs, it “groaned beneath a much

larger number o bad ones.” Like most kings, George

III acted in the interests o the crown, not those o the

Colonial people.

Few Americans today give more than superfcial

thought to the nation’s electricity system dominated

by regulated utilities that unilaterally control the

production, distribution and sale o electricity — the

lieblood o our economy and quality o lie. Fewer still

5



the Galv in eleCtr iC i ty in i t iat ivean eleCtr iC revolut ion

6

ENERGY LoSS IN ThEELECTRICITY LIfE CYCLE

img h h c dd m

cdsc gh cs 100 s g wh s h pw p. o

w s h g v gh h. th mg 98 s s g

h w, pm s h.

envision the need or an alternative. Aer all, this monopoly system has served thenation well, powering actories, lighting homes and driving labor-saving appliances

during a century o economic growth. Electric utilities project the image o a

responsible and trustworthy public servant, and their linemen perorm clearly

heroic work during storms — restoring power to homes and businesses where the

lights don’t seem to go out all that oen.

Te truth, however, is that every day about a hal million Americans spend at least

two hours without electricity. Brownouts, power spikes and minor interruptions

shut down computers and bring high-tech production lines to a halt, costing the

economy an estimated $150 billion a year. Even more critical, more than a trillion

dollars a year is lost to the U.S. through businesses that move to nations with higher

quality electricity supplies. o consumers, who as a result pay among the world’s

highest electricity bills, the costs o unreliability and lost opportunities are invisible

but real, buried in the price o goods and services.

Such ailures are accompanied by astonishing ineciency. In most situations, more

than 90 percent o the thermal units that go into generating electricity never light

a room or run a motor. Te power is lost in the orm o heat and steam going into

the atmosphere at power plants, as heat bleeding o transmission lines and rom

Source: Reprinted with permission from What You Need to Know About Energy , 2008 by the National Academy of Sciences, courtesy of National Academies Press, Washington, D.C.



7

“instant-on” appliances, all o which adds another $100 billion a year to the cost.

Generating electricity also has a steep environmental cost, producing more

pollution than any other single industry and more carbon dioxide than the entire

transportation sector. In addition, nearly a quarter o the power generationinvestment is devoted to providing electricity or peak periods o demand. Tis

stand-by capacity includes hundreds o plants used only a ew hours each month,

yet built and maintained at a consumer expense o nearly $50 billion a year.

Operated with analog control technology dating to the 1950s and earlier, many

o the components that make up the electricity grid are on the verge o ailure. A

large number o the nation’s power plants are at least 50 years old and operating

on borrowed time, as are transmission lines, distribution substations andtransormers. According to the Federal Energy Inormation Agency, as a result

o decades o under-investment, renovating and expanding the grid to meet

demand alone will cost $1.5 trillion by 2030.

America is thereore at a critical inection point, a metaphorical 1776 o energy.

We can choose to maintain the grid as it now exists and is regulated, a course

avored by most incumbent monopoly stakeholders who are as fguratively entrenched in law and society as was the British monarchy o the 1700s. Or, with

a revolutionary, ree-market change in the rules o how the industry operates, we

can reinvent the system to best serve the needs o consumers.

Te nation, in act, has an unprecedented opportunity to create a 21st century

grid that operates ar more intelligently, reliably, eciently and cost-eectively.

It would stimulate the economy and expedite the development o clean energy

while reducing the need or new conventional power plants. Most important, it would give consumers ultimate control over their electricity use and cost. It is

a revolution that would compel utilities to evolve, to ocus more on consumer

needs and service quality.

Tis revolution is not a stuy issue o the past, but in act is remarkably relevant

to younger generations. Social media, networking and entertainment all eed on

electricity — and die when standby power ades. Also, with the emergence o practical electric cars, cleanly generated electricity is the most eective means o

addressing carbon emissions and climate change. How it’s managed is perhaps

the most critical issue acing our nation.

a 1776 of e nerGy




8

Te regulated monopolies enjoy the same

protection given to the telephone system prior to the 1970s, when rotary-dial

phones came only in black, were owned

by the monopoly and were rented to

consumers who had no other option.

EARNINGS ENTITLEMENTTe investor-owned electric utility companies in

the United States sell nearly three-quarters o the

nation’s electricity, and generally speaking, their executives and investors will

not easily loosen their grasp o the status quo. Tese regulated monopolies

enjoy the same protection given to the telephone system prior to the 1970s, when rotary-dial phones came only in black, were owned by the monopoly and

were rented to consumers who had no other option. Utilities hold a similar and

largely unchallenged control over electricity, and in most jurisdictions have the

exclusive right to electrically connect buildings across roads, which eectively

outlaws competition.

Trough regulations that ostensibly protect consumers, utilities are entitled toa fxed return on how much they invest in acilities to meet maximum demand,

while charging consumers or the average cost o providing power even though

the cost is much lower during many periods o a day. Since utilities earn

essentially nothing rom innovation and believe they will simply lose revenue on

such investments, they have no incentive to improve service reliability, eciency

and quality. While most highly admired companies are dedicated to serving

consumers, it can be argued that a utility primarily serves not those who buy power, but the regulatory agency that sets its rates.

Since utilities are regulated primarily at the state level, there are essentially 50

dierent sets o rules and regulatory bodies, in addition to ederal regulation o



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SMART GRID

a vs h – wk gd mcgds h c m d h s

companies that transmit electricity across state lines. Like utility executives,

regulators are skeptical about the benefts o reorm, and perhaps instinctively

resist. Proponents o reinventing the grid thus ace opponents who sincerely

believe that the existing system, however awed, still meets the needs o the

average consumer.

Because acts suggest otherwise, there’s a certain absurdity in leaving the system

unchallenged. We live in a digital era that requires near-perect power quality,

but which is served by slow and imperect analog technology. It’s like operating

a railroad with switches that take 10 days to open or close. In addition, orcing

consumers to pay or the system’s invisible ineciencies is akin to commercial

taxation without representation.

Tere is a very relevant and well-known precedent, however, or reorming a

monopoly that no longer serves the nation well. As Bob Galvin, the retired CEO

o Motorola and leader o the cell phone revolution, so wisely observed back

in 2005: “Electricity is where the telecommunications industry was 30 years ago: a

lot of pent-up innovation and a regulated monopoly business model which lacks the

incentive to innovate.”

a 1776 of e nerGy

Source: “Energy: Upgrading the Grid,” Nature , vol. 454, pp. 570-573, July 30, 2008.




10

Te deregulation o the archaic telecommunications system in the 1970s

triggered massive innovation, leading directly to cell phones, the Internet,

the iPhone and other technological advances now so necessary to our lives.

elecommunications became ar more intelligent through the computerizedcapability to instantly recognize and adapt to changing circumstances.

ThE INTELLIGENT GRIDTe same could be said or what’s oen called the smart grid, though the word

“intelligent” is a more precise descriptor. An intelligent electricity system

begins by providing consumers with meters that transmit the price and usageo power in real time, and with electronic controls that enable the user’s devices

to automatically adjust power consumption during peak periods o demand and

avoid higher prices — sometimes called “prices to devices.” Tese would replace

today’s iron curtain o utility-controlled meters over which consumers have

no control. Such a grid would enable a seamless and constant two-way ow o

electricity and inormation between power providers and consumers.

Te reormed grid also would allow homeowners and businesses with solar

panels, wind turbines or other orms o distributed generation to sell any

excess power produced back to the grid — at air market

rates that reect the ull value o the service. A truly

intelligent grid also would allow consumers in an

apartment building, oce park, campus or an

entire community to combine, or aggregate,

their power use in order to secure the most

competitive rates and share excess production.

Tese new aggregations — conceivably many

thousands o independent islands o power —

would eectively transorm oce and retail

buildings, homes and electric vehicles rom

power pigs into power plants that augment rather

than drain the nation’s electricity supply.

Tese smaller entities also would be tied together

in a network o intelligent microgrids. Each would

have two-way controls that are linked to still other



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microgrids and the bulk electricity grid, automatically routing power to where

it’s needed at the speed o light and incorporating a sel-healing unction that

isolates and corrects outages, providing uninterrupted service. What’s more,

the interconnectivity o these distribution microgrid networks could smoothout the spikes o peak demands, eliminating the need to build additional and

expensive standby power plants.

Many technologies or an intelligent grid are already commercially available.

Recognizing the proound benefts to the economy and environment, the

U.S. Department o Energy’s Smart Grid Investment Grant program awarded

$4.3 billion to 100 projects during 2009, most o which regreably emphasizeonly semi-intelligent electric meters. Alas, ewer than 20 o the projects are

designed to give consumers the real tools and inormation needed to make

inormed choices. More than 90 percent o the money is simply going to

shovel-ready projects, using meters with limited eatures that retain a utility’s

control o electricity use and price data. Te unortunate result is that these

less-sophisticated devices — which in some cases are leading to mysterious

overcharges — are not only giving smart meters a bad reputation amongconsumers, but also raising suspicions about utility motives and predatory

practices.

Te barriers to reorm are the product o an industry that understandably

guards its vested interests and a public that, lacking clearly articulated

alternatives, does not yet realize anything is wrong. A Harris Interactive poll

conducted in January 2010 ound that roughly two-thirds o Americans had

never even heard o a “smart grid” or “smart meters.” While the same number

agreed that they would cut their energy use i they were capable o tracking it, 42

percent were simply unable to either agree or disagree with the statement: “Te

electricity system is fne the way it is and a smart grid is not necessary.”

However, as citizens, businesses, media and civic leaders increasingly recognize

and express rustration with the system’s aults and the huge price it is extracting

rom every citizen, ocials at both the state and ederal levels cannot turn a dea ear. Tey must either encourage or orce utilities to adapt. Voters’ demands or

reorm can thus produce a reinvented electricity system that properly serves the

country and its people.

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a 1776 of e nerGy





s much as any decade in U.S. history, the onemost recently concluded certainly tested national

resiliency. In his book, e Age of the Unthinkable:

Why e New World Disorder Constantly Surprises Us

and What We Can Do About It , author Joshua Cooper

Ramo describes how ideas and institutions that we

once relied upon or our saety are ailing. How is

it that a global war on terror could produce moredangerous terrorists? How could a struggle to end

o a fnancial crisis accelerate its downward progress?

Just a ew years into the new century, he suggests,

“we’ve arrived at a moment o peril that not long ago

would have seemed unimaginable.”

Fear o how eectively the government would

manage a pandemic u virus is colored by how

well it dealt with Hurricane Katrina. en years

aer the World rade Center towers ell, an empty

excavation site remains in their place. Te busted

a

A Nationin Peril

13




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real estate bubble and deated stock market

have dashed millions o Baby Boomer plans

or a comortable retirement. Indeed, today’s

children are the frst-ever U.S. generation whose economic and quality o lie prospects

are projected to be ewer than those o their

parents. Most recently, the Gul o Mexico

oil disaster has threatened yet another major

energy resource. And in the wake o the

Great Recession, the entire nation wonders i

another shoe is about to drop.

In e Age of the Unthinkable , Ramo looked at the physics o a sand pile as a

metaphor or that shoe. When sand is piled grain by grain, it orms a perect

pyramid-shaped cone. Eventually, one or more grains will inevitably cause a side

to slough o in an avalanche; the problem lies in predicting when. Te cone o

sand looked stable, but could give way at the drop o a single grain. One physicist

calls the phenomenon “organized instability,” likening it to a undamental orce

o nature that aects clouds and civilizations alike.

While no decade has ever been without its disasters, there are prophets who

believe that or the U.S., things today can only get worse. In America for Sale:

Fighting the New World Order, Surviving a Global Depression, and Preserving

USA Sovereignty , author Jerome Corsi contends that there are orces outside

the country that intend to purchase the nation’s assets, while insiders pursue

policies that outsource the most valuable jobs and would erase all borders. Inleaning toward the apocalyptic, Corsi is tapping into a popular gestalt. Several

doomsday flms have rumbled through theaters in the past year eaturing similar

themes. A tiny grain o sand suddenly ends everything.

ThE SuPERPRojECT PRoToCoLS

Global catastrophe aside, troubling trends do exist. When Boston’s Big Digended in December o 2007, it was the last big public works project on the

national drawing board. As Louis Uchitelle wrote in a New York Times eature

on America’s “Superproject Void,” major inrastructure projects such as the

KATRINA dwd pws.



15

Erie Canal, the ranscontinental Railroad and the Interstate Highway System

long characterized the nation’s ambition. Te eats also shared a common trait:

Each in some way integrated distant markets, which in turn led to real economic

growth and the creation o shared wealth. Major projects, including the Hoover

Dam and electricity grids, have paid or themselves many times over.

With public inrastructure investments on hold, the private manuacturing

o hard goods is also in decline. “In the 19 th and 20th centuries we made stu,”

wrote political analyst David Brooks in the New York Times. oday, the U.S.produces protocols, or sets o instructions. “A soware program is a protocol

or organizing inormation,” Brooks explains. “A new drug is a protocol or

organizing chemicals. Wal-Mart produces protocols or moving and marketing

consumer goods.”

Protocols are extremely valuable.

While a piece o steel can be put toone use at any given time, an idea

can be used by many simultaneously.

Continued economic success, Brooks

argues, depends upon inventing

and embracing the new protocols.

o make them work, he writes

that “a nation has to have a goodoperating system: laws, regulations

and property rights.” Tis is what

economists call “adaptive eciency.”

We need a revolution in our way o thinking and in

the institutions we use to manage the world i we aregoing to keep up with such a dynamic system.

— Js C rm

a nation in per i l

BoSToN’S BIG DIG




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American business has repeatedly shown that when given even the most meager

o incentives, entrepreneurs adapt quickly and eciently to bring orward ideas,

products and services. Upstart companies rise up and compete with each other

— think Yahoo! and Google — while still newer complementary enterprisesintegrate with the established, such as wier and Facebook. Tis is called “sel-

organization” and it’s yet another undamental o nature.

“When you spread power instead o hoarding it,” Ramo writes, “you discover

benefts that you couldn’t have imagined in advance.” Decentralized groups

bend and adjust ar beer than an organization ollowing orders rom central

command. It is an arrangement that “exists in the most resilient systems in our

world.”

oday’s electricity grid is a product o sel-organization that started in the 1880s.

Despite its imperections, the system is more than inrastructure made o steel

boilers, concrete and wires. Utilities use protocols in serving their customers.

In North America, eight Independent System Operators (ISOs) centrally

coordinate, control and monitor the transmission o power, some within a single

state and others across borders. In many ways, these operators are the brainsin today’s grid — the protocols between utility generation plants — making

the decisions to move bulk power to where it’s needed. In a new intelligent

grid, these operators would remain as an essential piece o its electronic


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Te democratization o energy gives rise to a new

distributed social vision in the 21st century that

will change our economic, cultural and politicalinstitutions as dramatically as the Enlightenment

vision that accompanied the frst industrial

revolution two centuries ago.

— Jm rk, Leading the Way to the Third Industrial Revolution

and a New Distributed Social Vision for the World in the 21st Century



17

nervous system, with consumers serving as the decentralized and added-value

capillaries.

Despite the nation’s proven resiliency, public confdence appears shaky.

Baered by lingering wars, deindustrialization and diculty in creatinguni ying legislation instead o partisan conict, the U.S. seems to be waiting or

that grain o sand that will collapse the pile — an event or development we can’t

prevent or stop.

Tere is one thing within our control: We must declare independence rom the

past and not allow the electricity enterprise to continue to dri into senility at

the intolerable, growing expense to our nation and all its citizens.

Te transormation o the electrical system would in essence be a collective

super-project — unconventional and driven by many thousands o

decentralized and yet sel-organizing public and private interests — an

enterprise that runs on sophisticated protocols, bringing together the best

aspects o America’s past, present and uture. It is an endeavor that would

produce new U.S. jobs that can’t be shipped to other countries, and in turn

would create wealth, reliability and security. How the nation can aain this is

well-inormed by what was done in the past.

a nation in per i l





uring the last decades o the 19th

century, America’semerging electrical inrastructure was up or

grabs. Tomas Alva Edison put his inventions and

investments behind direct current (DC) technology,

a orm o electricity that at the time required the

generation source to be near the consumers, a model

o distributed power. Te other competitor was

alternating current, or AC, which used centralizedpower plants and with high voltages pushed

electricity through wires over much longer distances.

Te choice between the two was called “the War o

the Currents.”

Te nation’s greatest inventor held an amazing 1,093

patents, including the invention o the phonograph,

a motion picture camera and, o course, the electric

light bulb. Many o Edison’s ideas revolved around

connections between seemingly unrelated materials

and purposes. Even as he worked on many versions

o the incandescent lamp, he also was considering

The EdisonParadoxD

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20

an entire system that would

illuminate the room and more.

“Te same wire that brings the

light will also bring power andheat,” he stated. “With the power

you can run an elevator, a sewing

machine, or any mechanical

contrivance, and with the heat you

may cook your ood.” His business

model was based on providing

innovative consumer servicesin addition to producing and

delivering electricity.

In September o 1882, Edison

opened the frst American

electricity generation station in

the heart o Manhaan’s fnancial

and news district. Six coal-fred

dynamos supplied direct current

to 85 customers, with enough

energy to illuminate 400 light bulbs. Each bulb burned whiter, steadier and

more cleanly than any gas lamp, giving a ortunate ew the frst glimpse into the

20 th century.

But the station was also a dirty, loud and ungainly cluster o machines. Edison’schoice o direct current meant that generating plants had to be within a mile

o the end-users. It was a concept suited or the available technology and the

United States in the 1880s, especially heavily populated urban centers. By 1886,

Edison’s frm had installed 58 power stations and some 500 isolated lighting

plants in actories, department stores, hotels and apartment buildings. Had his

original vision been ollowed to its logical conclusion, we might well have spent

the past 100 years generating electricity much as we do heat, with a urnace in acloset or basement.

While Edison’s consumer service-based vision was ahead o its time, the

technologies at his disposal were not. America began to spread out rom cities.

ThE VISIoNARY thms av eds



21

A ormer Edison protégé, Nikola esla, developed a practical generator that

produced alternating current, with voltages that were easily transmied over long

distances and regulated with transormers. Ever-larger centralized generation

plants became a compelling option at a time when electricity demand wasdoubling every decade.

esla ound a backer in George Westinghouse, who saw the economic advantages

o large central generation plants near the source or delivery point or coal, and

o shipping the power long distances over wires. One generator could supplant

hundreds o the smaller Edison-style units. In theory, a centralized system

confned pollution rom burning coal to a more limited area, remote rom

population. For al l o Edison’s brilliance, esla and Westinghouse won the technical and economic bale

o the currents in a nation starving or electricity.

By 1908, the proound importance o electricity

was already timelessly highlighted in stone over the

entrance o the then-new Union Station near Capitol

Hill in Washington, D.C.: “Electricity — Carrier of Light and Power, Devourer of Time and Space,

Bearer of Human Speech over Land and Sea, Greatest

Servant of Man — Itself Unknown.” A century later,

more insightul words have never been wrien.

SEEDS of MoNoPoLYTe edgling electricity business entered its

second stage o development — a period that has

echoes today — around the turn o the century. At

its center was yet another Edison disciple, Samuel

Insull, who eventually headed Chicago Edison.

Insull understood that i his frm was to prosper,

it must reduce the number o small and aggressivefrms oering competing supplies o electricity.

He began to stimulate demand, oering discounts

to armers and other new consumers while buying

almost two dozen utilities. Leading a company

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the eDiSon paraDox




22

uNIoN STATIoN Wshg, D.C. – scp v h c

now called Commonwealth Edison, Insull argued that electricity was a natural

monopoly, so vital to homes and actories that it should come at a cheap price or

everyone and rom a guaranteed source.

As capital-intensive as railroads, the evolving electricity business developedhigh barriers to entry by new competitors. Insull argued that duplicate power

plants and wires would be “economically wrong,” and that states should regulate

the industry. Having worked the back rooms o Chicago politics, he also knew

that campaign contributions would encourage regulators to supervise utilities

with a light hand. Emerging state regulations killed o power systems owned

by towns and cities. Te monopoly lowered prices urther, which increased

electricity consumption and helped America modernize at a rapid rate evenduring the 1930s. It also curried political avor.

States passed laws that allowed regulators to set rates that earned utilities air

returns on their investments. Te way to earn even more guaranteed money

was to make ever-larger investments in generation plants and transmission lines

in order to sell more electricity. Insull eventually ell rom grace in a political

Photo Credit: t bs, pJM icc



23

Te same wire that brings the light will also bring

power and heat. With the power you can run an

elevator, a sewing machine, or any mechanical

contrivance, and with the heat you may cook your food.

— tms a eds

corruption scandal, but electric power became a necessity that ed the country’sappetite or rerigerators, washers, hair dryers and radios. From the 1940s

until the early 1960s, power consumption grew twice as ast as the rest o the

economy. Economies o scale meant that every new centralized power plant was

cheaper and bigger than its predecessors. And as long as the economic benefts

continued to accrue to everyone, the monopoly system remained intact.

Progress, however, came to a halt in the mid-1960s when both electricity

demand growth and the economies o scale slowed dramatically, but Insull’s

natural monopoly still continued to dominate. Guaranteed rate structures and a

lack o competition bred several generations o change-averse utility executives,

who saw lile merit in keeping pace with technological breakthroughs. op

university graduates no longer viewed electricity as glamorous and promising.

Te combination o rising costs and artifcially constrained prices created an

economic shutdown on investments or service improvement. In act, since themid-1990s, the electric utility industry’s annual depreciation expenses have

exceeded new construction costs.

Te paradox o all o this is that Edison had much o it right, especially with

his notion o distributed electrical generation or businesses and communities

alike. Emerging technologies have now virtually eliminated the natural

monopoly argument supporting the wholesale production and retail delivery

o electricity. Sti regulation and guaranteed profts were eective in growingthe system, but they now limit a mature industry in dire need o renewal. While

public electric utilities played a huge role in making America great, technologies

and circumstances have made it the time to give power directly to the people.

the eDiSon paraDox





einventing the national electricity grid wouldnot only be a jobs-producing super-project —

easily exceeding the magnitude o the interstate

reeways — but also a protocol or innovation,

organizing the creation and distribution o power into

something akin to an energy Internet. At the heart

o this proposition are literally thousands o smart

microgrids, encompassing large buildings, oceparks, resorts, universities and entire communities.

Augmenting and working in concert with the bulk

grid, microgrids will incorporate alternative and

renewable power generation, which in turn will

expedite investments in such resources and reduce

the reliance on conventional power sources.

While the present electromechanically controlled

bulk power grid is analogous to a one-way radio

broadcast, a network o microgrids would unction

more like the Internet, providing an instantly

accurate, real-time, two-way ow o energy and

r

Microgrids: Where Technology andConsumers Connect

25




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inormation. Moreover, as alternative power generation systems are installed on

homes and large buildings, microgrids can eciently route any excess electricity

produced to where there’s a shortage, reducing the need or expensive new and

environmentally detrimental conventional power plants. Intelligent controlsproviding electricity rates in real time will enable consumers to make inormed

choices on consumption — using in-house computerized automated capabilities.

Tis interwoven and strengthened power system will provide the unailing

electrical service reliability required in the digital era.

While a holistic, robust and all-encompassing system o community microgrids

will clearly take a decade or more to implement, the end result is a consumer-

controlled virtual utility. Te technical areas o innovation needed to enable anintelligent distribution grid already have been identifed and are within reach.

Tey include:

Merging electricity and telecommunications to enable electronic

appliances and devices to automatically exchange electricity and

inormation with the bulk power distribution grid so that consumers can

choose the most cost-ecient and convenient times or using power. Electronically controlling and monitoring the distribution system

in order to direct the ow o power with pinpoint precision, anticipate

disturbances and correct them beore they occur, saving the high costs o

outages.

Transforming today’s one-way electric meter into a two-way consumer

portal that enables electricity, price signals and demand decisions to ow back and orth at the direction o the consumer.

Seamlessly integrating local power resources , including solar power and

plug-in hybrid electric vehicles, allowing consumers to purchase and sell

excess power while helping states meet clean energy standards.

In this highly easible uture, utilities will operate under dierent rules, with

incentives that emphasize reliability, eciency and a lighter environmentalootprint. Full deployment o these innovations could produce a 30 to 50

percent reduction in carbon emissions and a similar improvement in energy

conservation. And it would represent a true paradigm shi in how power

providers interact with consumers.


26



27

Look at what distributed computing did or the I industry. We wouldn’t have

millions o soware engineers i we stil l relied entirely on mainrame computershooked up to dumb terminals. Why? It’s too expensive, with access limited to the

privileged. Distributed power is real democracy.

oday’s electricity users are not engaged with the industry beyond ipping

switches and paying bills. One Google executive likened electricity use to being

orced to shop in a grocery store where the prices are hidden, and paying a lump

sum at the end o the month. Electricity consumers don’t know about and can’tshop in other stores that might oer money-saving options. Tis concept is

oreign to almost any other industry — on its own a reason or reorm.

MiCroGriDS : Where teChn oloGy anD ConSuMerS ConneCt

CAPABILITIES of A SMART MICRoGRID

ths v ssm dsg ms u.S. g

chgs d mxmzs csm d sss v.





ur nation was ounded on the principle o decentralized opportunity, not centralized control.

Change comes when leaders step orth, backed by

growing and inormed public support, to advocate

what is right. Te proposal must be accompanied by

a candid acknowledgment o the defciencies o the

existing structure and its governance.

Te change also has a noble purpose. Articulating

the problems o the current system is neither anti-

business nor subversive, but a product o rational

and objective thinking. Indeed, i we look at today’s

electricity industry with what Tomas Paine called

“simple acts, plain arguments and common sense,”

the need or reormation is sel-evident.

An Electric Revolution must start with the notion

that electricity consumers deserve the same rights as

they have in every other industry. Only then will the

current rules begin to change.

o

Giving ConsumersTrue Power

29




30

Te ollowing principles or that transormation serve as a bill of rights for

electricity consumers:

All electricity consumers have the right to receive inormation on the ever-

changing, real-time price o electricity — called dynamic pricing — and the

means and incentives to use this inormation to their best advantage.

All electricity consumers have the right to system reliability and servicequality that protects lie and saety under all conditions, and meets the

needs o today’s digital society.

All electricity consumers have the right to hold their utilities accountable to

a publicly open set o perormance standards.

All electricity consumers have the right to buy their electricity services rom

any source they choose in open, competitive markets.

All electricity consumers have the right to sell the excess power they

produce or store back to the grid at a air market price.

All communities have the right to improve their electricity distribution

system, with the ull cooperation o their utility, to best serve citizen needs.

For a typical U.S. household, the costs and benefts o comprehensive

grid modernization are signifcant. For communities and their citizens, arevolutionary adoption o microgrids woven into a modernized and intelligent

bulk power grid — a undamentally smarter version o what exists today — could

yield benefts that typically repay its development costs at least our times over



31

within fve years o installation. Beyond that, the potential or value and growth

is limited only by the nation’s need or energy and control o carbon emissions.

Qualitative benefts include more equitable electricity rates; improved customer

satisaction; continued innovation; robust, ree-market competition; expanded

and higher-quality retail oerings; and perhaps most important, greatly reduced

vulnerability to natural disasters or aacks, including computer assaults rom

terrorists.

In addition, an intelligent grid promises still other benefts or consumers.

Consider the cost o power outages and wasted energy. While that $300 billion

annually is a remote number, it breaks down to more than $2,000 per year orevery household in the country. An intelligent grid can easily reduce these

costs to consumers by at least 75 percent. For example, an intelligent grid that

automatically provides real-time price signals to household appliances can,

GivinG ConSuMerS true poWer

DYNAMIC PRICING D d dg -pk hs w .





33

and green grid systems. Communities with intelligent and reliable grids

would aract modern digital-based industries, which also generate high-value

employment and tax revenue. Moreover, on the national scale this is essential to

successully competing in today’s global economy.

Te right to sell all o a consumer’s distributed power production is an

exceptionally important development, enabled by what’s known as retail net

metering and a “eed-in tari.” While a growing number o utilities allow

customers to eed electricity back into the grid, fnancial credit typically stops

when production equals consumption. W hen the meter is “zeroed out,” the

extra power goes to the utility or ree. Tis policy impedes the adoption o alternative generation sources. In much o Europe, eed-in taris are standard

or homes and businesses that produce their own and surplus electricity and

have helped make Germany a world leader in solar energy.

33

GivinG ConSuMerS true poWer

According to U.S. Secretary o Commerce Gary Locke,

once the smart grid is more ully deployed nationwide,it will help reduce power demand by more than 20

percent and bring nearly a hal-million jobs online.

— rmks 21s a eg ecc fmJ 16, 2010

Wsg, D.C.

Advocates or the disadvantaged express concerns that an Electric Revolution

would leave the poor behind, that clean energy would burden budgets already

stretched perilously thin. While the less auent in the nation probably can’t

invest in solar panels and sell excess power now, they would beneft rom

intelligent, consumer-empowering meters and home automation, supplied at no

cost by entrepreneurial microgrid operators. Lower energy prices and new job

opportunities would be a disproportionate advantage to the less ortunate —

the hallmark o insightul social policy.





hroughout most o the past century the mainplayers in utility regulation have been the utilities’

own aorneys and lobbyists, state public utility

commissions and state elected ocials. Te Federal

Energy Regulatory Commission regulates the

transmission and wholesale sale o electricity across

state lines and monitors and investigates energy

markets. One o the nation’s largest industries,electric utilities have immense political and economic

leverage. As a result, electricity issues are oen

shrouded in detail, rhetoric and complications that

bae the general public.

Te plain act is that the electricity business

is terrifcally complex. By its nature, it is an

extraordinarily capital- and technology-intensive,

politically constrained enterprise where even the

best-intended proposition can get picked apart

with caveats, exceptions and reminders o previous

plans gone wrong. For example, the ederal Energy

A Primer onReformt

35




36

Independence and Security Act o 2007 oered a number o excellent policy

choices. But while it encouraged states to make changes, it didn’t hold them

accountable. As a result, relatively lile progress has been made in the absence o

coherent leadership.

Indeed, prior to the 2008 election both major political parties stated that

transorming the electricity system was essential to the nation’s uture. Alas,

with the exception o the marginal Smart Grid Investment Grant Program,

Washington has ound itsel engaged in other more partisan maers.

With support rom consumer advocacy groups, several progressive state

legislatures have been pushing or change, but oen meet ferce utility andregulatory resistance. Even so, a quiet side o the revolution is under way in the

states that have implemented reorms. Based on their experience, the ollowing

are protocols or comprehensive electricity system reorm:

reforMS that eMpoWer ConSuMerS anD buSineSSeS

Consumer access to data and improved meters: Give consumers accessto data about their electricity use so that they are beer equipped to save

energy and money. Also, allow intelligent meters and automation systems

to be installed by consumers or third parties. Establish national standards

or those meters and eliminate the one-way utility inormation control

systems now in use.

Aggregation: Establish rules that allow communities, campuses, multi-

tenant buildings and acility owners to eciently combine or aggregatemeter loads, both to streamline billing and so they can purchase electricity

that costs less or is more environmentally riendly, or both.

Retail competition: Allow communities, businesses and consumers to buy

electricity services rom whomever they choose, enabling them to obtain

power rom low-carbon and renewable sources directly. Free markets

provide the proven incentive or innovation.

reforMS that value ConSuMer aCtion

Price transparency : Intelligent meters connected via the Internet or other

communication devices must provide consumers and their appliances with


36



37

electricity pricing inormation that reects how prices vary throughout

the day. Tis is at the heart o a consumer-centric smart grid.

Net metering: Establish rules that allow customers and aggregated

communities to sell local distributed generation back to the gridat appropriate rates. An enabling policy is the eed-in tari, which

encourages investments in distributed power generation.

Ancillary service payments: Compensate customers when they provide

services such as conserving energy during peak periods and investing

in renewable energy, especially in response to state and ederal carbon-

reduction legislation.

reforMS to eliMinate MonopoliStiC reGulatory barrierS

Streamline interconnection rules and

processes: Interconnection standards

are the technical requirements and

legal procedures that would allow a

utility customer to make two-way connections, a prerequisite or net

metering. States should adopt a

consistent, transparent set o provisions

that acilitates these connections in the

most consumer-riendly ways.

Enable the post-meter device market:

Eliminate utility company control over

selling and installing in-home devices

that help consumers manage electricity

use. Allow entrepreneurs to oer

consumers the most innovative choices

at the most reasonable prices.

Microgrids: Eliminate laws that prohibit local governments and thirdparties rom aggregating demand and owning electricity systems that

cross public rights o way. Establish rules that allow privately owned

microgrids and district energy systems that are designed to provide the

highest quality service at the lowest cost.

a pr iMer on reforM




38

reforMS that iMprove utility aCCountability

Reliability targets: Establish much more stringent reliability standards,

with incentives and penalties that require utilities to provide electricity

quality that meets the needs o 21st

century consumers.Intelligent grid program oversight: Establish detailed grid perormance

goals — including metrics, reporting and program requirements — to

ensure that aggregated power areas and utilities are held accountable or

providing reliable power and spending repair and upgrade dollars most

eectively.

Performance-based rates: Compensate utilities based on their overallperormance, taking into account energy eciency, innovations and

customer service, instead o simply the amount o electricity they sell.



istorically, the central problem in developingcompetitive electricity markets is the need or a

system operator to manage complex, short-term

power grid interactions and maintain system

reliability. Te key is to continuously maintain the

balance o power supply and consumption under all

conditions. In the past only util ities could master

the task. But complex consumer digital demandscombined with aging analog controls have seriously

eroded utility companies’ ability to maintain

operational control, leading to increased unreliability

and insecurity. An intelligent deregulated system

using digital controls is essential to meeting 21st

century needs.

o many in the electric utility industry, deregulation

is a word with exceptionally negative connotations.

Market reorms aempted in Caliornia during the

1990s turned out particularly badly, bringing about

An Inconvenient Experiment

h

39




40

changes that were more “destructuring” than deregulation, yet carried a whi

o regulatory glasnost. What the state put in place was a volatile combination

o bad economic theory and worse political practice, which ultimately put

Caliornia and its rate-payers at the mercy o Enron’s traders at the zenith o thefrm’s malevolent power. Tis was the equivalent o leaving the state’s ront door

unlocked and posting a sign welcoming burglars.

Caliornia’s inconvenient experiment began with the creation o a group o

isolated wholesale markets, contrary to the well-established competitive

business model that emphasizes development o both wholesale and retail

markets. In eect, Caliornia created a volatile wholesale market structure,

but maintained a closed retail electricity market with fxed sales prices.

Fundamentally this disconnect cannot work, since ecient retail pricing

and incentives are essential i consumers are to beneft rom competition.

Caliornia’s true problem was not deregulation, but rigid retail price regulations,

coupled with the prohibition o long-term wholesale supply contracts that led to

bankrupt utilities.

It was a serious act o mismanagement by the state government and its public

utility commission. Caliornia is still paying or a debacle that cast a nationwide

pall on progress toward deregulation and still gives

negative propaganda to opponents o change. But

the conclusion that deregulation and consumer

empowerment cannot and do not work is

patently untrue. What is true is that details

maer, which means including wholesale

and retail markets in the process so

that dynamic, transparent pricing

will give consumers an incentive to

adjust their demand or electricity

accordingly. Above all, state governors

and legislators need to act wisely

and courageously on behal o their

electorate and not be driven by short-term

political expediency.



41

A PLACE foR uTILITIESFortunately, many other states recognized the aw in the Caliornia debacle

and are creating more elastic markets or entrepreneurs and consumers. Further

propositions or deregulation also must include a manageable “o ramp” orutilities, leading to a new road that includes them in the development o an

intelligent grid. No maer how much solar and wind power the nation develops,

it will be many decades beore the electricity produced by utility power plants

is not needed, i ever. Te nation thrives on electricity, and as re-chargeable

electric automobiles are developed, still more electric power will be needed.

With a reinvented grid, those who know how to make and move electricity are

critical resources. Utilities will always “ollow the cheese.”

Te ederally led nationwide elimination o monopoly businesses in avor

o competitive ree markets has overwhelmingly succeeded in the airline,

trucking, railroad and telecommunications industries, among others. Several

states, including exas, Pennsylvania, New York, Massachuses, Ohio, Illinois

and Connecticut, have begun opening retail electricity markets to competition,

poising them to take ull advantage o intelligent grid technology. Elsewhere,however, the inclination is to resist. As an astute energy research executive once

pointed out, while a ew utilities are warming to the idea o microgrids, most

view them “as an existential threat to their business models.”

Utilities, however, can perhaps gain confdence rom an analogy described in

e Age of the Unthinkable. While many actors contributed to the demise o the

ormer Soviet Union, author Ramo believes that it fnally imploded only whenthe army ocers, actory managers, mayors and other elites who managed the

nation’s daily work simply let it go. He suggests that these individuals knew that

i and when the empire ell, it was they who would be in the best position to

pick up the pieces in Russia and the newly independent republics. Te idea also

carries a ring o truth in the case o A&, the deregulated phone monopoly

that thrives in today’s competitive communications world. While no industry

is ever deregulated without disruption, utilities are in an excellent position toollow the A& example and proftably implement many aspects o reorm.

41

an inConvenient exper iMent





he holy grail o modern architecture is a design or

a zero-energy building, or ZEB, that uses eciency,

solar and other power systems to produce as much

electricity as it takes o the grid. While there are

challenges, a Chicago-based architecture frm has

designed a 71-story skyscraper that will soon open in

China, which will be 58 percent more energy ecient

than conventional skyscrapers. And it’s clear that as

more ecient solar panels are developed, an increasing

number o homes and ZEBs will be built, including

structures that produce more electricity than they use.

In Caliornia’s Silicon Valley, one frm recently

revealed a power plant in a box, a collection o small

uel cells that eciently produce electricity rom a

variety o uels, including natural gas, ethanol andlandfll gas. A Fortune magazine report indicates that

at least three large frms are developing small nuclear

power plants, designed to be buried more than 15

eet underground, operate with ew moving parts

Grains of Sandt

43




44

and produce enough electricity or a mid-sized town. W hen tied into a series o

interlaced microgrids, these islands o power will be parts o the ramework o a

new intelligent national grid.

Te Electric Revolution is gaining ederal aention, evident in a request romthe President’s Executive Oce o Science and echnology Policy or consumer

input on an intelligent grid transormation. Meanwhile, several states are

taking the lead in creating policies and changing regulations, which will beneft

consumers and pave the way or a reinvented system. For example:

In TExAS , aer seven years o retail electricity competition, consumersnow have dozens o retail electricity service providers rom which tochoose. Fierce competition has maintained pressure on electricity prices, even as uel costs have risen. Beyond prices, the competitivemarket has signifcantly enhanced investment and job growth in exas,

which was named the “op State or Business” in 2008.

In PENNSYLVANIA , state policymakers and industry experts haveencouraged competitive electricity markets or more than a decade;rates there that were 15 percent above the national average are now 5percent below. All costs rom construction overruns, reueling delaysand ineciency are borne by the utility investors, not their customers.

Te ILLINoIS, ohIo, MASSAChuSETTS andCALIfoRNIA legislatures have empowered local

governments to orm “virtual microgrids” to purchaseclean power by aggregating residential meters. Tis alsogives communities the ability to deploy home automation,encourage eciency and integrate clean local generation.Tis creates revenue rom ancillary services while loweringelectricity supply costs. Ohio law also has mandated thatutilities make dynamic pricing available or all consumers.

NEW YoRK has been a leader in oering consumers dynamic pricingand other programs that value their participation in the electricity market. Consumers are rewarded or reducing electricity demand andincreasing conservation via payments and lower electricity bills.



45

Tanks to orward-thinking senior state ocials, NEW MExICo iscommied to implementing the frst statewide intelligent green grid,

with at least hal o its electricity coming rom renewable energy sourcesdelivered through community microgrids.

oREGoN has implemented net metering and interconnectionstandards that put the state “at the head o the class,” contends aNew York-based group that promotes sae and clean energy policies.Oregon’s program has an aggregation rule that allows armers andactories that may have more than one meter on their property to usenet metering credits over several sites, opening the way to cost-ecient

use o renewable energy.

Te ability to readily expand clean distributed power systems is being

demonstrated by a growing number o projects, including a 12-megawa Perect

Power microgrid system at the Illinois Institute o echnology (II) in Chicago.

GrainS of SanD

PERfECT PoWER AT IIT

is is tchg’s 12-mgw, cmps-wd mcgd ssm




46

Conceived and launched by the Galvin Electricity Initiative in collaboration

with Commonwealth Edison, Endurant Energy, S&C Electric, and in part

thanks to a $7 million grant rom the U.S. Department o Energy, the project

is a model or how to modernize local electricity distribution grids nationwide.Unlike most communities, however, universities typically own and control their

inrastructure.

When complete in 2013, the prototype will solve a major II problem. With a

system built largely in the 1960s, II’s energy inrastructure was nearing the

end o its useul lie. In the harsh Chicago winters, II experienced an average

o three or more major power outages each year, costing more than $500,000

annually in restoration expenses, lost productivity and the incalculable value

o ruined experiments. o remedy the problem, II is modiying its existing

stand-by turbines or a ast-start capability, enabling them to fll in i the utility’s

incoming electricity supply ails or to supply power to the grid i needed.

Controlled with advanced meters and switches, this capability also will enable

II to earn revenue rom the utility or providing the power response and

services, which will ultimately include solar power and controls that optimize building eciency. Moreover, the redundant design and intelligent service will

provide continuous energy to II buildings, no maer what transpires o-

campus.

At a $20 million cost, the campus microgrid system will pay or itsel within fve

years. Along with eliminating the need ora new $5 million substation, it allows

ComEd to deer a $2 million upgrade to a substation that serves II. Te PerectPower microgrid will save between $500,000 and $1.5 million annually by

reducing power use during periods o peak demand, and will supply electricity

back into the grid. With $3.5 million o the project devoted to research, the

social benefts o the project are proound, especially i it is replicated. Other

community microgrid initiatives include:

Not that ar rom II is NAPERVILLE, ILL. , which is virtually outage-ree. Named one o Fortune magazine’s “Small Business’ Best Placesto Live and Launch” in 2008, Naperville owns and operates its ownmicrogrid-like electricity system, which provides more than 80 percent



47

higher reliability than its predecessors. With $10.9 million rom theU.S. Department o Energy’s smart grid grant program, Naperville willdeploy more than 57,000 intelligent meters, allowing consumers toollow in real time the cost o electricity consumption and lower costs

by shiing their use o power.

Te city o LEESBuRG, fLA., is transorming electricity servicequality and eciency or all o its 23,000 electricity consumers viaa truly intelligent community microgrid network that incorporatesdistributed generation, electronic monitoring and control, and a smart

meter network providing time-dierentiated rates.

Te city o DANVERS, MASS., plans to deploy more than 12,000smart meters or its entire customer base while upgrading its cyber-security system and automating outage management.

In foRT CoLLINS, CoLo. , the city plans to install 79,000 intelligentmeters and in-home dynamic response systems that include in-homedisplays, smart thermostats, and air conditioning and water heatercontrol switches. It also will automate its power distribution systemand enhance grid security.

Tese steps by states and communities are like tiny grains o sand alling upon

the cone-shaped pile. At some point, one or more grains will cause it to collapse,changing the shape o the nation’s electricity service, its

economics and environmental impact.

GrainS of SanD





n a piece on the ideological gridlock that so cripplesrational discourse in Washington, D.C., columnist

E.J. Dionne Jr. noted that, “Te most vibrant reorm

alliances in our history have involved coalitions

between populists (who stand up or the interests and

values o average citizens) and progressives who fght

. . . or institutional changes to improve the workings

o our democracy.” Te ormula sounds fing orelectricity system reorm.

Even while large institutions control the electricity

business and the regulatory system, individual

consumers have a proound role in change, i only

because individual consumers have votes — or

city council positions, mayors, state legislators and

members o Congress. Individuals can patronize

entrepreneurial businesses that develop alternative

power, intelligent microgrids and distributed

power generation. Such businesses and individuals

also can urge government ocials to consider the

A Call to Actioni

49




50

economic and environmental potential o aggregated power rom business and

industrial parks, campuses and city-wide microgrids. Individual citizens also

can ask utility representatives or answers about real-time pricing and truly

intelligent meters, and install smart appliances and tools such as programmablethermostats and energy management systems. All o these steps build a

oundation or bringing about change.

Tere are dozens o websites devoted to developing intelligent grid technologies

and systems, some o which ocus lobbying pressure on state regulatory

agencies, and others on the Department o Energy and the Federal Energy

Regulatory Commission (FERC). Although elected ocials in Washington may

seem remote and detached, individual voices are powerul, as evidenced in thetown hall meetings during the health care conversation. Social media are also

useul or generating support or electricity reorm, an issue that should fnd

avor with populists, progressives and especially younger generations, whose

lives are so flled with digital devices that depend on high-quality electricity.

Indeed, U.S. Representative Edward Markey (D-MA) introduced ederal

legislation in March o 2010 called the Electricity Consumers’ Right to Know Act (H.R. 4860), which i passed would ensure that all utility customers

have ree access to timely and secure data on their electricity prices and

consumption paerns. As an Amendment to the Public Utilities Regulatory

Policies Act (PURPA) o 1978, this bill also reinorces a recommendation that

FERC develop national standards or providing consumers with such data,

and requires state regulators and utilities to ormulate consistent policies. Not

only is H.R. 4860 a positive step on its own, but it also could pave the way orcomprehensive legislation consistent with the Electricity Consumer Principles.

But as with any maer in Washington, broad and vocal support is critical to

its passage.

Although the details o electricity management are complex, demanding retail

electricity competition and two-way meters that show consumption and a

transparent price isn’t a rocket science kind o request. Te idea o long-termfnancing or communities that want to develop microgrids is quite basic. So,

too, is the suggestion o aggregated islands o distributed power generation,

which can earn a air price or any excess power ed into an interwoven grid.

Although the technical aspect o uniorm national interconnection standards


50



51

is best le to engineers and scientists, most citizens would agree that smoothly

incorporating all o the nation’s microgrids and their clean power resources into

the bulk power grid is a wise move indeed.

Citizens also must demand a shi in regulatory policy so that it’s no longer

acceptable or an unchallenged utility to decide what’s best or consumers.

Policy should enable businesses to compete to ulfll consumer needs — and

even create new ones — with the best ideas winning in the marketplace. When

an unlimited number o the best and brightest creative minds, including those

o consumers, have the reedom to improve the system, the potential or successis unlimited, with perection almost assured.

e nation’s leaders, including elected ocials in Washington and the 50

state capitals, need to hear this from citizen-consumers. Just as the American

Revolution fnally erupted rom public rustration with a government that did

not respond to legitimate concerns, the same is true o an Electric Revolution.

It hinges on the collective voices and actions o a people who recognizehow adversely they and uture generations are aected by an increasingly

dysunctional electricity system.

Te unreliability, ineciencies, waste, environmental impact and resulting

extreme costs are clear. So is the resistance to change rom those who make and

regulate electricity, however instinctive it might be to deend the status quo.

While the establishment can be excused or its natural inclination to preserve

a known system, a ailure to intelligently evolve — to support, enhance and

embrace the ar superior intelligent alternative that’s now developing — is

unorgivable. In act, reorming and reinventing the nation’s electricity system is

nothing more than simple common sense.

Challenge the status quo and don’t sele or

anything less than perection. — r G

d, G ecc i

a Call to aCtion





Suggested Reading Achenbach, J. “Te 21s Cenury Grid.” National Geographic , July 12, 2010.

Chrisensen, C .M. (2003). e Innovator’s Dilemma: e Revolutionary Book that Will Change the WayYou Do Business. New York, NY: HarperCollins.

Corsi, J. (2009). America for Sale: Fighting the New World Order, Surviving a Global Depression, and Preserving USA Sovereignty. New York, NY: Treshold Ediions.

Galvin, R . & Yeager, K. (2009). Perfect Power: How the Microgrid Revolution Will Unleash Cleaner,Greener, and More Abundant Energy. New York, NY: McGraw Hill.

Munson, R. (2005). From Edison to Enron: e Business of Power and What it Means for the Future of Electricity. Wespor, C: Praeger Publishers.

Ramo, J.C. (2009). e Age of the Unthinkable: Why the New World Disorder Constantly Surprises Us and

What We Can Do About It . New York, NY: Hachete Book Group.Riin, J. (2008). Leading the Way to the ird Industrial Revolution and a New Distributed Social Vision

for the World in the 21 st Century. Rerieved from www.foe.org/packe/global.pdf.

Schewe, P.F. (2006). e Grid: A Journey rough the Heart of Our Electried World . Washingon, DC: Joseph Henry Press.

Vaiheeswaran, V. (2003). Power to the People — How the Coming Energy R evolution Will Transform Industry, Change Our Lives and Maybe Even Save the Planet . New York, NY: Farrar, Sraus and Giroux.



PRaISE FOR An ElEctRic REvolution

“A must-read or anyone who has ever fipped a switch.” — Sad Socket

Meet Sad Socket at www.galvinpower.org

Documents

An Electric Revolution: Reforming Monopolies, Reinventing the Grid, and Giving Power to the People