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Wednesday, August 5, 2009

Another World - Part 1 of 3

Another world is not only possible, she is on her way. On a quiet day, I can hear her breathing. - Arundhati Roy

That quote is far more than a couple of elegant sentences – it beautifully expresses an undeniable truth; the economic and changing climate situations we find ourselves in are not temporary. Rather, they represent seismic shifts in the way we are going to live out the rest of our lives. Another world is coming, and Glasgow can be among the first to embrace it, or, we can attempt to make the past last a few more years and miss the opportunity. I sure hope we will choose the former.

While tidal changes in the way we live are about to inundate us, the particular subject of this series of posts is electric power and the way it is produced, marketed, priced, and consumed. For way too long, we have sold electric power as if there is an infinite supply available (there is not) and we have priced it as though it costs the same to make it throughout the day (it does not). These confusing signals have been sent to you by your friendly local and regional electric power utilities, and we should be ashamed of ourselves.

After thirty five years in this business there is one thing I know – almost no one really understands what a kilowatt hour (kWh) is, nor do they know what one costs. Obviously, this is a real problem when it comes to the discussion about changing the way folks purchase and use them! A kWh is a volume of energy equivalent to using 1000 watts for one hour. Think of a kWh as a measure of volume much like a gallon of gasoline. In Glasgow, a homeowner presently pays a bit over eight cents for each kWh consumed, no matter what time of day it is consumed, and therein lies the major problem.

On an average summer day in Glasgow (and just about any of the ten thousand cities across our country), relatively little electric power is consumed for sixteen hours per day. However, between noon and 8:00 p.m., nearly everyone is using a large amount of power. We call those hours “peak” energy hours, and that is when all manner of expensive and carbon dioxide producing resources are called upon to meet the peak demand. KWh used during those hours should not be priced the same as the other sixteen hours, but that is exactly what we have been doing for many decades.

When gasoline demand goes up, we expect the price at the pump to rise. When a popular event lands in a particular city, we expect the price of motel rooms to jump. We are not surprised that it is more expensive to fly to Hawaii than it is to fly to Atlanta. Front row seats at a basketball game are more expensive than seats in the nosebleed section. So why have we not priced electric power the same way? Well, one reason is that it is more complicated to meter and bill, and most electric utilities have had a long held affinity for doing things simply. Another reason is that you, the customer, also have a warm feeling for simplicity and have given us signals for years that you would rather just pay a simple “all you can eat” rate instead of one which is different depending on the time of day, and we have obliged. As a result, those that use energy wisely and try to avoid on-peak usage are paying higher rates to subsidize the habits of others who make major contributions to the peak demand in the afternoons.

Over the last several decades our power supplier, TVA, has also committed a lot of sins by designing a wholesale electric rate that does not differentiate between efficient use and inefficient use. At the same time, our species has continued to develop residential areas farther and farther from the centers of towns. We have called this growth and we have been quite certain that all growth is good. As a result, we have converted productive farmland into inefficient suburbs and the utilities have encouraged that by charging the same rate per kWh for energy delivered out into the boondocks as they charge for the high density areas in towns. This is more subsidy where the homes packed in at fifty per mile of power line pay more so folks can enjoy cheap power out where there are three homes per mile of line. We created this mess through inattention to the issues and a conviction that all growth is good and that everyone should help finance that growth. Man, have we been stupid or what?

Our past sins are now being illuminated in a variety of ways. All-you-can-eat pricing for electric power resulted in towering peak demands that have required the construction of ever more peak power generation plants. More power plants resulted in increasing amounts of carbon dioxide (and mercury and other poisons) being pumped into our air and water (Wendell Berry, noted Kentucky author and poet, calls this “pissing in our own cistern”). Those pollutants have contributed greatly to changing our climate, which, in turn, is requiring even more generation plants to be built to keep us “comfortably numb” in an increasingly hostile climate. The present economic collapse is the icing on this cake of woe. Suddenly those who are paying more for energy to provide lower cost power for those who use energy inefficiently are demanding an end to that practice.

All of these planets are lining up to create a new world where electric power, like so many other commodities, is priced at the actual cost of production, including all of the environmental damage costs, fuel costs, delivery costs, and maintenance costs (another subsidy comes when folks with no trees on their property pay the massive costs involved with trimming and removing trees around power lines in the yards of their neighbors). A new world is coming and it is not coming quietly. Stay tuned to this blog for parts two and three of this series.