POWER August 2013 - 76

COMMENTARY
Soul of the Universe
By Mark Glaess
T
he theologian John Wesley, so taken with electricity, reverently
called it the soul of the universe. Less impressed,
perhaps, are state regulatory commissions that nonetheless
set service territory boundaries to avoid the added expense in
duplicative facilities. Becoming the sole source of the good stuff
also invited regulation of rates, service standards, and whatever
else commissions could conjure. That model has worked well for
many of the 3,250 or so electric cooperatives, municipal-owned
utilities, and private power companies-despite efforts at deregulation,
a memorable but largely disastrous effort to introduce
competition.
The enactment of renewable standards affecting half of the
states, along with net metering in 43 states, has challenged
power suppliers. Still, the reliable service territory law ensures a
base of customers to pay for those mandates, whether beneficial
or not.
Iowa Goes First
Now comes an Iowa District Court that favors competition at
the expense of the incumbent utility. The Iowa Utilities Board
(IUB) ruled that Eagle Point Solar could not deliver electricity to
a municipal building in Dubuque because that was the province
of the local utility, Interstate Power and Light. On appeal, the
Polk County District Court said otherwise. That ruling noted that
Eagle Point Solar was not a utility in the statutory sense, that the
company didn't own infrastructure, and that it couldn't meet the
building's total load, among other defining utility characteristics.
The District Court opined that solar should be treated similarly to
conservation and-get this- " to encourage the development of
alternative energy " as " balancing " against the utilities' monopoly
status. Boom, the exclusivity of the service territory law is off
the board, at least in Polk County, Iowa. (The decision has been
appealed by the IUB, utility interests that intervened, and Eagle
Point Solar.)
Ah, solar. In the past five years the cost of solar has dropped
61%. USA Today said that over that same period the average
homeowner has seen an annual rate increase of some $300. Next
year the U.S. is predicted to be the worldwide leader in solar
deployment.
Allan Kind, in a paper entitled " Disruptive Challenges " written
for the Edison Electric Institute, observed that solar growth is
limited to about 20 major utilities in states that possessed three
characteristics for deployment: sun, subsidies, and high electric
rates. Being on someone's tab for subsidies has long been attractive
to renewable interests, but the certainty of ever-escalating
rates will make solar all that more attractive as a hedge against
rates certain to increase.
Electric cooperatives, an occasionally contemplative bunch,
formed the National Renewables Cooperative Organization to de76
velop
renewable energy, including solar, to meet the interest of
the co-op's member-owners. Responding to customers (a novel
idea given the domain utilities have been given to dictate) provides
a way to scale solar based on membership appetite and-
pay attention to this-ensure that solar deployment covers the
cost for the facilities necessary to offset the intermittency driven
by clouds and dark of night.
Electric cooperatives, an occasionally
contemplative bunch,
formed the National Renewables
Cooperative Organization to develop
renewable energy, including
solar, to meet the interest of
the co-op's member-owners.
New Utility Paradigm
Electric utilities are no longer the soul of their service area. New
entrants will take roofs away from them and, if the Iowa District
Court decision is upheld and replicated elsewhere, then the exclusivity
will go the way of, well, exclusive service areas. Think
not? Consider then an admittedly overhyped observation by NRG
Energy CEO David Crane, who is of the mind that, say, Hardware
Hank will soon sell generating units to slap onto a homeowner's
natural gas line to firm rooftop solar. That would make the next
call, once the province of survivalists, to the utility to " disconnect
that line. "
In 2009, Anya Kamenetz wrote an article in Fast Company that
said the microgrid could be the answer to our energy crisis. The
availability of the juice isn't an issue, but the quality of that kilowatt-hour
is. Kamenetz wrote of a neighborhood in Cambridge,
Mass., buying renewables from " Sue Butler's home " that supplied
power to houses on either side of her boutique energy plant.
IBM VP of Strategy and Development for Energy Allan Schurr was
quoted as saying, " distributed energy is happening. " If Iowa,
first in the nation's presidential caucus, also dictates utility decisions,
the case decided by the Polk County District Court will
presage the energy equivalent of mobile phones.
Now is the time to determine how to incorporate solar into the
array of electric options available to your customers because-
most assuredly-others are doing so. ■
-Mark Glaess is manager of the Minnesota Rural Electric
Association.
www.powermag.com
POWER | August 2013
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POWER August 2013

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