A Call For Energy Policy Reform in Washington

(Image: Arctic Sun LLC)

Guest blog by Russ Borgmann

The industrialized world is experiencing an energy renaissance.  And the U.S. is at the nexus of that regeneration. There are several beacons signaling this new energy landscape:

• The costs to maintain the centralized electric grid are increasing, and poses increasing security risks
  

• Distributed energy costs are decreasing
  

• The growing patchwork of clean energy alternatives requires cohesive integration with the grid
  

• Customers, regulators, and politicians are increasingly dissatisfied with the status quo
  

• Consumer preferences are changing, no longer content for utilities to merely provide electricity to end users.  Now consumers are a central point (node) in the grid
  

• There is a degradation (real and perceived) in the quality of electric utility service
  

These factors constitute a paradigm shift, not merely incremental change.  Customers, the private sector, the public sector, regulatory agencies, Public Utility Districts (PUDs), and Investor Owned Utilities (IOUs) are all experiencing a fundamental shift to electricity that is clean, efficient, diverse, and secure. The Paris Climate Conference (COP 21) highlights the need to reduce our region’s reliance on coal-fired electricity from places like Colstrip.  G20 nations spend $452 billion per year subsidizing fossil fuel production.  That’s nearly four times the global spending on renewable energy subsidies.  It is no longer true that clean energy is more expensive, especially when accounting for the true costs associated with fossil fuels – GHG emissions, carbon taxes, healthcare costs, and environmental costs, to name a few.  The equation is simple.  Now clean energy equals sustainable economic development.

Traditionally, utilities were often rewarded for under-utilized, expensive assets. Regulation, under the guise of reliability and resilience, often rewarded building a capital-inefficient system.  In WA, regulators only review electric infrastructure projects AFTER being built, not before.  As such, reimbursement is rarely denied, and customers pay the project costs plus an authorized rate of return on the “investment” via higher electricity rates, typically spread over forty years.  WA regulation is not sufficient to limit profits to IOUs as a result of buying and building excessive, under-utilized assets which quickly become obsolete.  Centralized electrical systems also pose greater physical and cyber-security terrorism risks as well as greater vulnerability to natural disasters, like earthquakes, and extreme weather.  Now, with the cost of renewable energy sources declining, more choices are available for customers.  Certain areas of the country are seeing free market forces compete for a customer’s business.  In Texas, for example, TXU is offering free power after 9pm.  Coupled with energy storage, like Tesla’s PowerWall, small businesses and residential customers are now afforded a greater degree of energy interdependence. Many Texas customers can choose from a variety of electricity source/pricing options, from multiple, competitive electricity suppliers.  The day is dawning when we will unlock the potential to make electrons more freely available to all.

Does this spell doom for electric utility companies?  Not for those utilities that are reading the handwriting on the wall.  Decoupling is an important first step, making utilities agnostic.  In some states, regulators have disassociated (decoupled) a utility’s profits from its sales of electricity.  But the next step is crucial:  How do we properly incentivize utilities to embrace clean energy rather than push it away, relegated to the edges of their energy portfolio offering? Utilities must consider becoming a platform – a platform offering a menu of choices.  Forward-thinking utilities are becoming more nimble and innovative, ultimately playing a part in integration supervision and optimization of the grid in the next generation “Internet of Electricity”.  Technology is available today to connect all types of grid assets with one another, much like today’s internet servers and cloud-based services. Technical challenges are solvable. Utility business models, especially for IOUs, are slower to adapt to offering new services with competitive pricing. Yet if utilities don’t adapt, they will be consigned to becoming commodity providers, stuck maintaining their aging and obsolete assets, akin to the telecommunications industry with landline assets in the digital mobile age.

How do utilities get paid in this model?  New York’s “REV” program offers some examples of what’s possible when regulators, utilities, and cities work together to serve the best interests of all stakeholders and customers to modernize the grid:

• Utilities can share in the cost savings when they promote clean energy alternatives
  

• Utilities and cities, with state-level mandates and incentives, can issue RFPs for the best alternatives. Crowd competitive alternatives IN, not out.  Let the market respond to the problem, rather than rely on a utility to dictate a solution.
  

• Utilities and cities, with state-level incentives, can promote micro-grid competitions that provide cash awards for efficient, cost-savings solutions.  Cash awards are paid from the cost savings of the best alternatives.
  

Ideas like these generate diverse, distributed, and more secure energy sources. The old rate-based compensation model is replaced by an outcome-based compensation model.  Free market economics allow for the best solutions to rise to the surface.  Clean energy that is efficient and saves money are better alternatives for all participants as well as the environment.  And the cost savings can be mutually shared across all invested stakeholders and customers.  In some states, the old compensation model that subsidizes expensive, centralized infrastructure (hard costs), is already giving way to a new model of sharing in the savings and reducing soft costs.

How do we usher in this sweeping energy renaissance in Washington State? Washington is long overdue for regulatory reform.  State agencies must lead by example with a combination of mandates and incentives.  Governor Inslee is one of the country’s leaders supporting clean energy reform.  It is time to lend more bi-partisan support to legislation and regulatory reform to make this energy renaissance a reality in Washington.  Electricity regulatory reform is a non-partisan issue that can promote free market competition and in-state renewable energy job creation.

Before us lies an opportunity to be a centerpiece of clean energy policy and implementation.  Washington has abundant renewable energy resources that can be better utilized, especially when combined with energy storage technologies now available.  And Washington possesses a high-tech workforce already working on the “Internet of Electricity”.  Washington can become a Clean Energy Innovation Center that can serve as a role model for the rest of the U.S.  Please don’t leave Washington in the dark – stumbling along with outdated regulations that reward expensive, centralized, obsolete, electricity infrastructure that poses greater security risks.  We can cling to old monopolistic business practices, or we can embrace free market forces to power innovation.  Now is the time to light the way of transparent regulatory reform to ensure a bright future for Washington – a future that rewards affordable, distributed, reliable, resilient, and renewable power as part of a modernized grid.

Russell Borgmann of Bellevue, Washington is a technology management consultant and an advocate for sensible energy alternatives and efficient grid optimization in the Pacific Northwest. Russ advocates Washington regulatory reform to promote rapid absorption of new technologies, innovation, and entrepreneurship to integrate distributed energy resources as part of a modernized grid.

Salish Sea Protection and Improvement: Cases for Patience … And a Little Optimism

Pete Haase (Skagit Valley Herald)

   
Guest blog by Pete Haase

I read the recent State of the Sound report produced by the Puget Sound Partnership and I was conflicted.  There is a lot of so-so news, too much not-so-good news, and not much good news. There are a lot of pretty pictures.  It is especially troublesome to read that so much money has been spent and that so many of the “Action Items” are finished or at least going well but the “Indicators of Success” are pretty well stuck.  As you might expect, by diving into the Action Agenda from 2012 and 2014, you will find far too many of the Action Items involved studies, meetings, reports, and organizing-- with only a few being of the “fix things” sort.

But I think there are reasons for hope and here are a few:

First, the 2016 version of the Action Agenda will be focused on strategic activities (both “on the ground” and “in the water”) that are expected to directly impact the indicators of success.  That need has been clearly understood by the Partnership.  There are many more actions in work around the greater “Puget Sound” that will be good for the future yet are outside the funding scope and/or direct purview of the Puget Sound Partnership.  Some are in Canada and others are small, local actions with no avenue or interest for inclusion in the grand Action Agenda. Some not-so-small campaigns (such as the relatively grass-roots resistances to coal and oil and increased vessel traffic) don’t even have a place at the Puget Sound Partnership table, yet have massive public participation and direct impact on both sea level rise and ocean acidification.

Here is another reason for hope:

 “Something fishy: AmeriCorps crews work with DNR” is a video that highlights work done by the small group of Washington Conservation Corp (WCC) youth with the Department of Natural Resources Aquatics Reserves program.  Regardless of the positive impact of the work, imagine what these folks will keep bringing to the table for the rest of their lives – and the influence they can have for a better environment.  Then think of all the other AmeriCorps youth (WCC is an AmeriCorps program) we have working in the environment throughout the greater Puget Sound – there are maybe a dozen or more here in Skagit County where I live.  We’ve all known some – maybe many – of these amazingly capable youth, and we get a new batch every year.  All these enthused folks with experience and first-hand knowledge about how to make it all better over time will be a force to be reckoned with and many probably already are as they have dispersed far and wide.  Programs like this were not in place 35 years ago when big damage was happening to our lands and waters.

And another reason:

Recently I helped our local Skagit Fisheries Enhancement Group work with a large group of 8th graders during a day of “see-and-learn” visits throughout their local watershed. They had lots of hands-on water sampling and dabbling in topics like wetlands, nearshores, beaches and human impacts.  This event is part of a year-long program for these kids (and for several other schools in the area as well) to get in-depth exposure to their unique outdoor environment and to experience it.  Here’s another program that was not in place for our last generations, and one that is bound to help equip these folks to make better choices and policy about their environment.  We are pretty sure they already have had a bit of a positive effect on their parents, neighbors and families.

And finally:

Here in the northern counties of the greater Puget Sound we are fortunate to have the Northwest Straits Initiative and the seven County Marine Resources Committees that the Initiative supports.  Recently the whole group had their day-and-a-half annual conference in Bellingham with about130 people attending.  Besides the variety and impact of the various projects and activities showcased by these folks, it was striking also to see the almost equal distribution of male and female and likewise “young” and “old."  This is not a “dying” operation!

So, yes, it will take more money and more time and more effort – but we have done well at preparing and activating a youthful bunch that will easily multiply the efforts of the recent past.  Give them time and a chance.

[Pete Haase is an energetic environmental volunteer in Skagit County.  He likes being in the field with teams, doing things that he hopes will make a difference.  Much of what he does is citizen science.  Pete also likes engaging the public, helping them appreciate volunteer efforts and getting them to add their voices in support of protection and restoration. Pete has been named by RE Sources as a 2015 environmental hero.]

Guns Are Not Outlawed; Outlaws Have Guns

It’s been an awful couple of weeks of shootings, people killing and wounding lots of other people. Guns, long guns, rifles, assault weapons, and thoughts and prayers have been top of mind and top of the news. Two news items amidst the guns, long guns, rifles, assault weapons and thoughts and prayers I’ve been chewing on this past week.

The first is an account of a theft of assault-style weapons from a pickup parked at a Bellingham motel last weekend. [Assault rifles, pistols stolen from truck at Bellingham hotel ] (The weapons are listed in the news article and a photo of the stolen weapons was posted to Craigslist, presumably by their former owner.)

You can read the story yourself but I’ve pondered what this person was doing with so many weapons of this type and why he would leave them in his truck overnight and how thieves would have known these weapons were in the truck.

Maybe there’s a very reasonable and legal answer (“He just has guns, lots of guns,” [police Lt. Bob] Vander Yacht said) as to why he had the weapons and why he’d left them in the truck overnight. (“There’s never a good time to leave a gun locked up in a vehicle,” Vander Yacht said.”)

The police, according to the article, continue to investigate.

Which means that some outlaws now have a small arsenal of assault-style weapons which pisses me off both at this dick-head out-of-towner and these sleazeball outlaws.

Maybe I’d be just as pissed off if someone brought his arsenal into a motel room next to mine. These days who knows who’s carrying a weapon since people are carrying weapons supposedly to protect themselves from other carrying weapons.

Which bring me to the report that the South African Supreme Court of Appeals reversed Olympic athlete Oscar Pistorius’ lower court decision of manslaughter to murder. [Oscar Pistorius guilty of murdering Reeva Steenkamp]

Pistorius shot Steenkamp four times through a locked bathroom door. The court’s decision found the lower court’s ruling “fundamentally flawed.” Pistorius should have foreseen that his firing of a gun would have killed whoever was behind the door in his bathroom, regardless of whether he thought it was Steenkamp or an intruder.

Even in gun-obsessed South Africa, there are limits. In reading the judgment, Judge Eric Leach said, "not only did he not know who was behind the door, he did not know whether that person in fact constituted any threat to him. In these circumstances, although he may have been anxious, it is inconceivable that a rational person could have believed he was entitled to fire at this person with a heavy-calibre firearm." [Oscar Pistorius and South Africa's gun obsession]

OK, guns don’t kill, people kill. Oscar Pretorius was obsessed with firearms. Oscar Pretorius is an outlaw.

You can say your prayers and send your thoughts. You can write Page One editorials like the New York Times did this past weekend. [End the Gun Epidemic in America] Nothing will change until we change the political power around guns—and that political power does not come out of the barrel of a gun.

--Mike Sato