Public Power - October 2008 - (Page 29)

Verdant Power conducts on-site turbine testing for its Roosevelt Island Tidal Energy project in New York City’s East River. To test the transmission of electricity, a supermarket and a parking garage on the island receive electricity from the project. Photo courtesy: Verdant Power, Inc. fuel costs and the coming price for carbon.” Thilly points out the potential for integrating his region’s wind resource with Manitoba’s abundant hydropower. Manitoba can take Midwestern wind at night and ramp down its hydro generation; in the daytime, the province can let the water out and pay back the energy. Roger Duncan, general manager of Austin Energy in Texas, is another public power leader deeply engaged in inventing the “utility of the future.” He believes it easier for many public power producers to break that new ground. “We’re not regulated by the Public Utility Commission, Efficiency and green energy initiatives will offset the need for a 700MW power plant that otherwise would have been required by 2020, said Austin Energy General Manager Roger Duncan. substantially. People don’t gear up manufacturing if they think the tax credit is going to go away,” he said. Even as Congress dithers, however, Thilly believes utilities must begin remaking themselves. “Global warming is real and serious and will result in significant additional costs for fossil fuel generation. To get ready for that, we need to build up our renewable resources and expertise. Getting ahead of the curve is the key to keeping costs down over the long term.” His primary focus has been on demand-side solutions—“using energy more wisely to delay the need for new construction and keeping the bills low. Only ‘utility nerds’ care about rates. Customers care about bills—how much they end up having to pay,” said Thilly. “Aggressive energy efficiency programs are the least cost means to meet our obligation to serve. They save customers money, allow us to defer building expensive new power plants and lower greenhouse gas emissions. As a public power system, we have no incentive to increase rate base to grow earnings.” In the past three years, WPPI has tripled its budget for efficiency, with an emphasis on grass roots efforts. Community leadership, Thilly said, makes all the difference, as evidenced by the cities of Madison and River Falls, where strong, consistent advocacy by local government, business leaders, schools and civic organizations have consistently placed them among the nation’s highest customer parwww.APPAnet.org ticipation levels in renewable energy programs. Inspired by their example, former Mayor Paul Fisk of Lodi, Wis., stepped up and promoted green pricing at his local Rotary and Elks clubs. As a result, customer participation in green pricing programs doubled. Since Fisk’s initiative, nine other WPPI community leaders have issued similar challenges with comparable results. Thilly also champions communitybased power generation, including small wind turbines. “All things being equal, you want to tap resources as close to your load as possible. And when people see what they’re buying, it helps promote the sale.” Local wind power is less expensive than wind purchased from large projects, Thilly says. ”MISO [the Midwest Independent Transmission System Operator] feeds wind in as a must-run resource, which gets paid whatever locational marginal price is at that node at that time, so we don’t have to deal with the high balancing costs that an investor-owned utility might impose. To meet our planning reserve requirements, we can only count about 20 percent of the wind capacity, but we look at wind as primarily an energy resource, not as capacity. We don’t build it. We buy it from developers who get the tax credits, so we don’t take the risk of whether it blows or not. We just buy it when it’s there, at a cost fixed for 20 years, which gives us a significant hedge against rising except on transmission, so there are fewer bureaucratic hoops. We’re not as burdened by the next quarterly report. We have more patient money. And we can issue our own bonds.” Austin’s efficiency and green building programs will, by 2020, offset the need for a 700-megawatt power plant, according to Duncan. That avoided capacity will cost just $268/kilowatt, far less than any new generation resource. For the utility and its customers, the benefits from investments in demand reduction far exceed the costs: each dollar spent on sealing duct leaks, for instance, will return more than $7 over the building lifetime, translating to a levelized cost to the utility of 1.2 cents/kWh. Austin is also playing a critical role as incubator for next-generation technologies. In partnership with the University of Texas, the utility has developed a complete system for developing bright ideas into commercial products. Duncan’s strategic planning staff monitors the entire landscape of clean technology innovations, from advances in solar nanotechnologies to compressed air. Austin OCTOBER 2008 29 http://www.APPAnet.org

Table of Contents Feed for the Digital Edition of Public Power - October 2008

Public Power - October 2008 Contents Perspective 10 Questions The Future of Fuels in a Carbon-Constrained World An Energy Revolution Energy Policy in 2009 and Beyond A Green Reincarnation Beyond the Green Bandwagon Reliability Green Energy Community Broadband Customer Service Hometown Connections Human Resources Parting Shot

Public Power - October 2008

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