Better technology threatens archaic utility monopolies

3/30/2015
Better technology threatens archaic utility monopolies - Hawaii News - Honolulu Star-Advertiser
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Better technology threatens archaic utility monopolies
By John Farrell
POSTED: 01:30 a.m. HST, Mar 29, 2015
0
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When Cynthia Cantero decided to cut her energy bill by installing a solar array on her home in Ewa
Beach, she had no idea she was becoming a reluctant foot soldier in the battle over the future of the
electricity system. The rooftop solar array could dramatically reduce her monthly electricity bill, and
combined with thousands of her solar­intentioned neighbors, that's what has the Hawaiian Electric Co.
seeing red.
The issue isn't utility versus homeowner, or solar producers versus those without,
as utilities frequently suggest. Instead, it's about a fundamental change in the
nature of the electricity system. The electricity business has largely operated as a
government­sanctioned monopoly for nearly 100 years. For decades, it meant more
reliable energy at lower cost, though it ignored the environmental impact.
Cantero and many other Hawaii residents just want a lower electric bill, but
inadvertently, they have unearthed the archaic nature of this 100­year­old model for
electricity supply. Their bid to lower their bill with rooftop­generated solar electricity
shows that the centralized, top­down energy system of the 20th century no longer
makes sense. In fact, it poses a very important question:
In an age when power can be generated on rooftops, managed in real­time by smart thermostats and
controlled remotely by smartphones, do we need a traditional, top­down electric utility?
Probably not.
But there's a raging debate about what rises in its place, in Hawaii and other frontline states in the fight
for energy democracy. Some are going off the grid. Oahu resident David Greene has solar on the roof,
a battery in his garage, and just told the utility to come take the electric meter. Parker Ranch on Hawaii
island is looking at building its own independent "microgrid," anticipating that it can beat the utility's
rates.
Utilities offer another option: Mash the square peg of solar and smart grids into the round hole of the
20th­century monopoly model. HECO has suggested halving the compensation for customers that
produce solar energy from their rooftops. In more than 20 states, monopoly utilities are using their
power and profits to push utility commissions and legislatures into protecting their publicly provided
fiefdoms. It's the ultimate delaying tactic, propping up a dying system in the pursuit of short­term profits.
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The more likely long­term solution is transforming the energy system to capture the enormous local
opportunity. If renewable energy resources are available everywhere, can be built at large or small
scale, then they should be tapped in every community for its economic benefit. Some call this new
paradigm "energy democracy." Energy democracy means distributing power generation over rooftops
and windy fields and distributing the power of grid management to the masses. Consulting firm
Accenture has highlighted the opportunity: Utility customers stand to recoup $48 billion from their
electric utilities over the next decade.
Energy democracy wouldn't eliminate utilities, but it would shift them to a facilitating role commensurate
with the reduced need for centralized planning. Already, smartphones and smart appliances allow
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3/30/2015
Better technology threatens archaic utility monopolies - Hawaii News - Honolulu Star-Advertiser
Americans to schedule their dishwasher to run at midnight, their electric car to charge at 2 a.m., and
their air conditioner to start up when they're 2 miles from home. If we can use eBay to set prices for
used goods, why not electricBay for megawatts of power? Smart devices could make the process
simple, and the distributed control of the grid would unleash decades of pent­up innovations in energy
management and energy supply that utilities have been reluctant to embrace.
Utilities can't get us to energy democracy. It will take leadership from electric customers, via their
legislatures or public utility commissions. And it's already happening. In New York, a regulatory process
called Reforming the Energy Vision just suggested that electric companies be barred from owning
rooftop solar and other small­scale power generation, to keep them from competing with their
customers. And here in Hawaii, regulators have said that quashing customer solar is not an option.
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Solar customers like Cantero may have been conscripted into the fight for energy democracy, but she
and others already sense the economic opportunity of victory, and that the status quo is not an option.
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Better technology threatens archaic utility monopolies - Hawaii News - Honolulu Star-Advertiser
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