Local Innovation Can Fix National Energy Shortages
by David Morris and Daniel Kraker
originally published in
The Arkansas Democrat-Gazette, June 3, 2001

Seeing the Light by David Morris ISBN: 0-917582-88-6 Paperback, 2001. $15.00 order it!

The prospect of being hanged in the morning, English writer Samuel Johnson counseled two hundred years ago, "concentrates the mind wonderfully."

The rolling blackouts and spiraling electricity prices in California have concentrated the minds of policy makers--not only on the West Coast but across the country--on coming up with solutions to the impending summer crisis.

The national media reports on California's shortfall of thousands of megawatts and limits the discussion on solutions to President Bush's Energy Plan and Governor Davis' plea for wholesale rate caps.

They're missing the real story. California may need thousands of megawatts of generating capacity in the long run, but the rolling blackouts hit only a few blocks at a time, usually with only a few megawatts of capacity. This summers' electricity crisis, therefore, isn't going to be dealt with in Washington or even Sacramento, but at the local and neighborhood level. Indeed, local communities are already taking charge of their energy futures by acting quickly and creatively to ensure reliability and reign in electric rates.

One of the more popular strategies is also one of the oldest--public power. Many communities are taking a hard look at forming publicly owned utilities, like the Los Angeles Department of Water and Power (LADWP) and the Sacramento Municipal Utility District (SMUD), which have made headlines by keeping rates low and the lights on. In 1999, according to the Department of Energy, customers who owned their utilities paid 18% less than customers of investor-owned utilities.

San Franciscans will vote on an initiative in November to form a municipal utility district. Chula Vista, Santa Rosa and other cities are studying public power's feasibility. The San Diego County Board of Supervisors is trying to form a countywide public utility district that would purchase gas turbines to produce power locally, instead of having to rely on San Diego Gas & Electric. Orange County is also considering forming its own utility district.

Incumbent utilities typically fight tooth and nail to prevent cities and counties from forming their own utilities. To avoid a costly fight over the local distribution grid used to serve existing customers, this year the cities of Hercules in the Bay Area and Corona in Southern California formed utilities to deliver electric service only to new customers. Corona's new
utility will build power plants to serve city operations and new neighborhoods. Hercules' plan calls for the older two-thirds of its homes and businesses to retain their PG&E service and the newest third to be served by the city utility.

Conservation is another tried but true way to keep the lights on. Riverside is partnering with its largest energy consumers to conserve megawatts. UC Riverside has agreed to reduce its energy usage by more than 2 megawatts (1 MW of electricity can supply about 1,000 homes). The university has also agreed to lease three diesel generators, which together can produce 6MW of power for the city.

In exchange, Riverside will exempt the campus from rolling blackouts (a big priority because of delicate research projects conducted there), and will contribute more than $ 1 million toward a more efficient air conditioning system and upgraded wiring.

Another popular strategy is to install small, on-site generators at municipal facilities. The customer-owned utilities in Santa Barbara, Alameda, Healdsburg, Palo Alto and Santa Clara have all acquired portable back-up generators that will only kick in during severe power shortages. Santa Barbara's "distributed" generators will be paid for through the municipal utility's reserve fund, so customers will not pay a dime for their peace of mind. "We're going to be the masters of our destiny," says Alameda Mayor Ralph Appezzato.

Most encouraging is the cooperation that the looming summer blackouts have spurred among communities to meet their energy demands. Seven southern California cities are banding together to build a $ 220 million power plant in Burbank. The cities will split the planning, construction and operational costs in return for a guaranteed percentage of the new power.

San Marcos, one of the cities involved, will invest about $ 30 million. "It is a lot of money for us to invest, but we think the risk is worth it," says City Manager Rick Gittings. "Our biggest risk is in doing nothing. If we don't act, then we will just continue to be at the mercy of what Sacramento and Houston wants to charge us for electricity."

In these heady post-deregulation days, cities are living up to their label as "laboratories of democracy." Only when authority is vested with the citizenry, or as close to it as possible, can we be guaranteed that our electric system will be as democratic and responsive as possible.

David Morris is vice president of the Minneapolis-based Institute for Local Self-Reliance (www.newrules.org) and author of the book Seeing the Light: Regaining Control of Our Electricity System.

More Information:

Institute for Local Self-Reliance
1313 Fifth Street SE
Minneapolis, MN 55414
Tel: 612-379-3815
Fax: 612-379-3920
http://www.ilsr.org/