Mid-Morning Hour Two with Katherine Lanpher
TRANSCRIPT
Minnesota Public Radio
July 31, 2001

Good Morning! Welcome to Midmorning. I'm Katherine Lanpher

Author David Morris reminds us that more than a century ago there was a fierce civic debate about how we use electricity. It was a transfixing and transforming debate about who should own this new form of energy and who should shape its future. Now we're at the beginning of another century, and a different kind of energy crisis and its high time, Morris says, for another debate. He thinks its time to go back to locally owned electricity.

We're going to put a light on the topic this morning when we talk to David Morris. He's Vice President of the Minneapolis and Washington, D.C.-based Institute for Local Self-Reliance. And he's going to advise you on energy matters during both the Clinton and Carter administration and he's the author of a new book "Seeing the Light, Regaining Control of our Electricity System." David can be reached at 612-379-3815 in Minneapolis or via ILSR's web site, http://www.ilsr.org/

Lanpher: Good Morning, Mr. Morris.

Morris: Good Morning, Katherine.

Lanpher: Now, we have our own electricity crisis here this morning. There are thousands of people here without power because of the high heat that we're having. But what kind of energy crisis, in general, are in these days?

Morris: Well, we're actually not in an energy crisis these days.

Lanpher: What are you talking about? That's all the headlines! I thought the President was going to solve the energy crisis.

Morris: Yes, isn't that astonishing! But remember, back in February or March we were talking about three dollar a gallon gasoline by the summer in the Twin Cities. And we thought California would suffer almost continuous blackouts this summer. Well, somehow come May, the rolling blackouts ended. The price of wholesale electricity in California dropped by 75 percent and the price of gasoline plummeted. What's the price at the pump in the Twin Cities now?

Lanpher: I don't know, depends on where you go, about $1.40, $1.50.

Morris: Right. It's dropped about 45-50¢ since April, when we thought it was going to double. We have a long-term crisis in energy, there's no question about that. Over 90 percent of the power plants being built today are going to be fueled by natural gas yet we don't know how much natural gas we have left. Some people say 20 years, some people say we have 50 years but certainly that's a concern. In terms of oil, we know that we have a problem because OPEC now sets the price of oil globally by just varying their production by a few percent. But I don't think people should see it in the crisis terms that they did in January and February.

Lanpher: All right, in what terms should we be seeing it then?

Morris: First of all, we have no short term supply problem, but we do have a long term supply problem, and we need to begin today to design solutions to that long term problem. Second, we need to recognize that the technological dynamic has changed and the systems we designed over the last century may no longer be appropriate. We've built up an electricity system based on a technological dynamic in which bigger power plants produced electricity cheaper than smaller power plants. People forget that when electricity was first introduced, entrepreneurs like Thomas Edison sold power plants, not electricity. Only later did utilities come in that sold electricity. Central power plants replaced on-site or customer owned power plants. High-voltage transmission lines came in to carry the electricity from ever-larger central power plants to ever-more-remote customers. We developed rules - statutes, tariffs, laws - that presumed and encouraged this big-is-better dynamic. Thomas Edison's first central power plant served 59 customers. By the late 1970s a single nuclear power plant served a million customers. That system worked well for almost 100 years. But today we have a different technological dynamic and a different context in which we are making decisions regarding electricity.

Lanpher: Let me ask you something. What do you mean ... we have a different context of electricity?

Morris: We now have the possibility of generating electricity where the customer is just the way we did in the very first few years when electricity was first introduced.

Lanpher: Now then, did anything especially change in these hundred years? It strikes me that the landscape didn't change.

Morris: The landscape did change. Power plants grew to gigantic size. Electricity was distributed over remarkably long distances. Now, as I said, the technological dynamic demands smaller, more efficient and renewable fueled power plants. Moreover, the uses for electricity have changed dramatically. When electricity first came in, it was needed for its brute force. The first customers were the streetcar companies - they called them traction companies. The next customers were the light bulb users, and then the industrial, large industrial motor users. These uses could rely on dirty electricity, and by dirty I don't mean muddy like water but with varying voltages and frequencies. But now we're using electricity to run computers, we're using electricity to run many little circuits, and so now we need electricity, which is much more, of much higher quality. I'll get into what that means, but basically we're using electricity now almost at the electron level.

Lanpher: So you're saying that, because our need, the way our use of electricity has changed, that can help us effect a return to the smaller power plants.

Morris: That's exactly right. There's a number of businesses now installing their own power plants, not because they're price competitive with the utility companies, but because they offer higher reliability and quality. You mentioned the current spate of blackouts in the Twin Cities. What the utilities don't tell us is that this is normal. The utility companies have a performance standard of 99.9% reliability. That means that 99.9% of the year you will be getting your electricity. That sounds very good, but it also means that for 8-9 hours of the year, with no warning, you will be cut off. Now if I have a company that does data processing or information processing - something that really relies on high-speed computer information processing, I can't afford to be down for even 1 hour or 2 hours a year. In some cases a one hour outage could translate into millions of dollars of lost revenue. So businesses are installing their own generating plants that achieve a reliability standard of 99.9999%. Businesses are also installing their own power plant because it offers "cleaner" electricity. Electricity that you get, that you use in your home, comes from a power plant that is located a hundred to three hundred miles away, at least in Minnesota, and the electricity goes through what are called transformers and other power changing equipment before it gets to your house. And as a result it gets a teeny bit dirty. That means the electricity varies a teeny bit in its basic characteristics. The end customer doesn't even notice the changes. The lights don't even flicker, but some believe that many of the software glitches that occur are a result of variations in electricity.

Lanpher: What works against de-centralized power? What are the obstacles?

Morris: One principal obstacle is that we don't have a system presently designed for it ...

Lanpher: I'm going to stop because you just said that there are companies now that are providing their own power. If we don't have a system set up for that how are they able to do that?

Morris: Well, they're able to do that because twenty years ago Congress passed a law, in 1978, that required utilities to purchase power from independent power producers. Before 1978 you could put your own power plant in your own home and uncouple yourself from the grid system. But if you wanted to use the utility as your backup or if you wanted to sell excess electricity to the utilities, you were dependent on the utility's permission to do that and few if any encouraged decentralized power. So in 1978, Congress changed the rules. But the new breed of independent power producers built relatively large power plants, and the electricity system continued to be a one way system: from large central power plants through high voltage transmission lines to lower voltage distribution lines and then into the customer's building. But in the future is a system we could have literally millions of power plants that must interact with the grid system. That requires different rules. Let me give you an example. A number of states, including Minnesota, have a law called a Net Metering Law. Now what that means is that if you install your own electricity system, whether it's a basement power plant or a roof-top solar cell system, or a wind generator, you can turn your electricity meter backwards. In states that don't have a Net Metering Law you could tell the utility, "I want to generate electricity and I want to use you as a back-up and I want to sell you electricity". By law, as I indicated, the utility must agree to serve these functions. But it can establish whatever rules it wants to do so. Ordinarily, the utility will require you to add an additional meter. All of the electricity the utility sells to you goes through one meter and is charged at the retail rate, let's say 8¢ per kWh. All the electricity you generate on-site will go through the other meter and be sold to the utility at the wholesale rate, let's say 3 cents per kWh. Plus the utility charges you $500 and up for the extra meter. Thirty three states, including Minnesota, have enacted laws that require the utilities to stay with one meter and have that meter run backwards when electricity is being generated on site. Thus any electricity generated on site is used on site and displaces retail priced electricity, and any excess is sold to the utility at the wholesale price. In Minnesota those who have renewable fueled electricity systems actually get the retail rate for any electricity sold to the utility.

Lanpher: For those of us whose heads begin to swim at even the mention of the phrase "Net Metering", tell me how far away we are from me being able to go to, say a huge dry goods store and buying my own power supply the way I buy my washer and dryer?

Morris: I would say that, in terms of going to a Menards, or a place like that, it's probably about 10 years away for you to be going there. However ...

Lanpher: You mean a typical consumer?

Morris: That's right!

Lanpher: OK.

Morris: But then again, the typical consumer doesn't buy furnaces that way. You call up a furnace company or if you're remodeling or building a house, you work through a contractor. In a few years, in some parts of the country where electricity is higher priced, a contractor will offer you a choice. "Would you like a furnace or a power plant? They're both the same size and the furnace generates only heat and the power plant will generate both heat as well as electricity." In the power business these are called co-generation systems, meaning they produce two different end products from one fuel source. In parts of the country with very high prices, like Hawaii and parts of California and New York where electricity prices are double and even triple what they are in Minnesota, contractors will, within the next 2 or 3 years, begin to give you that same option for rooftops. "Do you want a regular roof, or one with solar cells embedded in the shingles?" These predictions are no longer futuristic. At this very moment, entrepreneurs are installing 20-30 on-site power plants, both renewable and non-renewable, a day.

By the way, people who are interested in this subject can get a great deal of information about technologies, policies, history and current developments at the web site of the Institute for Local Self-Reliance. <www.newrules.org>

Lanpher: You wrote a book, "Be Your Own Power Company", published in 1982 that discussed these trends. What's changed between the publication of that book and Seeing the Light ?

Morris: There have been some extraordinary changes. In 1982, small power plants were just coming in. But at the same time, giant power plants planned in the 1970s, when demand was doubling every 10 years, were coming on line in the 1980s, when demand was stabilizing and even decreasing in part because of efficiency improvements and in part because of electricity price increases. So if you, if somebody wanted to sell a small power plant, or if you wanted to sell electricity back to your utility company in the 1980's, or the early 1990's, the company said, "We don't need it. We have a surplus out there. We don't need any more electricity." The surplus was soaked up by the late 1990s. Right now the nation realizes it needs new capacity. So you have this interesting confluence, if you will, of two dynamics. One is the maturation of small scale power technologies, and the other is the need for new power.

Lanpher: You talk about how cost effective this de-centralized electricity is for people with small power plants. If it's so cost effective then won't market forces eventually help it take over?

Morris: Maybe, eventually, but there are a couple of things that are interfering with the market. If Xcel wants to build the power plant - it can borrow money for 20 years or longer at relatively low interest rates. But if you want to install your own power plant, your bank would probably give you a home improvement loan - 3 years at 10 percent interest. Your monthly payments would be extraordinarily high, and therefore, even though the power plant itself might be cost-effective, the financing terms force you to walk away. Another obstacle is that at this very moment the President, Congress, the Minnesota state legislature and Governor's office all think that what we need to do is accelerate the construction of new large power plants and high voltage transmission lines. If this occurs, 5 years from now we could wind up where we were in the 1980s, with a surplus of centralized power and a lack of demand for decentralized power.

Interruption for National Weather Update with a Thunderstorm Warning.

Lanpher: Sorry about that David Morris.

Morris: No need to apologize. In fact thunderstorms are an integral part of the electricity story. Most blackouts occur not because of a lack of generating capacity but because a distribution line goes down. In rural areas, rural electric cooperatives are the primary utilities. They serve a region with very little electricity demand per mile of line. So the utility has to build and maintenance and repair a long distribution line after storms, for very few customers that use that line. These utility companies are experimenting right now with putting power plants where the customer is - so they don't have to maintenance this money-losing distribution line. So, the weather is a perfect topic to inject into a discussion like this.

Lanpher: We're continuing our conversation with David Morris. We're talking about a movement toward locally owned electricity. We're going to Elliot - Good Morning.

Elliot: Good Morning. It's the first time I'm calling. I've got a question about these personal power plants. I'm owner of an audio file and I know how damaging dirty power can be to audio. I'm rewiring my whole house. However, I have a boiler, not a furnace. Could I make these power plants to replace boilers?

Morris: Yes, although usually these power plants are replacing a boiler at the business level and a furnace is at the household level. I caution you that, these micro-turbines are about 30 kW in capacity. A house needs, right now, maybe 2 to 3, maybe 4 kW, so that they're mostly sized right now for small businesses. But fuel cells may be available for the residential level within the next 12 months. They're being tested in about a hundred different locations around the country in rural areas, including in Wisconsin and Minnesota right now by rural electric cooperatives. Fuel cells operate on a different principle. People who saw Apollo 13 and remember the fire that broke out - it was an oxygen leak in a fuel cell. That shouldn't scare anybody - we're talking about outer space here. Fuel cells are incredibly reliable. They operate much like the battery of your car. They operate through chemical exchange. One company, called H-Power is testing 4.5 kW household systems this year and will be making them available next year. These fuel cells, about the size of a bread box, will also have waste heat available for use inside the building. If you have a steam heating system, there would have to be a changeover but if you have a hot water system, or if you have a forced air system - then little modifications would be required in the distribution system within the building.

Lanpher: We're going to go to Leah from Minneapolis. Welcome to Midmorning.

Leah: I was the general counsel and corporate secretary of a mid-size utility. I think the speaker is great. These are very important issues. I do think that the investor-owned utilities have some real unique challenges. They have a strong service obligation in engineering, I think. And they have a strong legal obligation to be profitable. And, I think that we maybe underestimate how difficult it is when people produce locally, and sell back, and you have these energy flows back and forth. It can really complicate a situation that's already pretty complicated.

Lanpher: Leah, I'm so glad you called us. Can you, ... an investor-owned utility as compared to what we're talking about?

Leah: Well, there are government agencies that operate power systems like the Bonneville Power systems. Then there are rural electric co-ops, as the speaker mentioned. And then you have investor-owned, which are really publicly traded New York stock exchange companies that have an obligation to their share holders as well as their commitment to service to their customers. And each one presents different issues as the speaker alluded to.

Lanpher: OK. Thank you. Thank you for calling.

Morris: Yes, and a very good point Leah, a very good point. At the beginning of the last century there was a big battle about who would own and control the electricity system. When the dust settled, we ended up with a hybrid system. We have about 2,000 municipally owned utilities. We have about a thousand rural electric cooperatives, which are customer-owned utilities. The majority of the power that is generated by 200 investor-owned utilities. As Leah indicates, investor owned utilities(IOUs) must pay attention to their shareholders. One hundred years ago we granted these IOUs a monopoly and gave them a guaranteed profit. In return, they were required to supply electricity, on demand at a reasonable cost. In the 1980's and 1990's, because we had a lot of stress in the energy system, including the electricity system, we changed the rules related to the investor-owned utilities. One of the rules that we changed was that we, that is, state regulatory commissions, increasingly required utilities to buy their power through competitive bidding. One of the things that happens when you have a regulated monopoly and you give them a profit based on the amount that they invest in a power plant or transmission line is that they tend to over-invest. If you get a 10% return on a billion dollar power plant, you earn more profits than if you get a l0% return on a half a billion dollar power plant. Independent power plants had no guaranteed profits. They competed with each other and generated electricity at a lower cost. The IOUs still earned a profit, but the price of electricity was less than it would otherwise have been. What I am saying is that now w need to begin to think about the grid system becoming a marketplace and utilities coordinating the buying and selling of electricity from tens of thousands of on site power plants, not just a few dozen central power plants.

For a century we had a compact with utilities. They had a monopoly and a guaranteed profit. We regulated them and required them to provide reasonable cost electricity on demand. California was the first to break that compact in 1996 and 24 other states including the District of Columbia, more or less followed its lead.

Lanpher: That's what we call deregulation.

Morris: That's right. Deregulation, at least as it's used in the current debate about electricity, means that your investor-owned utility no longer is guaranteed a profit and often no longer produces most of the electricity you purchase. Power is produced by independent power producers. They are no longer guaranteed a profit. For free market advocates that's the good news. The bad news is that power producers are no longer required to generate electricity on demand, and they're no longer required to provide electricity at a reasonable cost. California was the first off the block but just as they deregulated an unusual combination of circumstances occurred--a drought that reduced their hydroelectric power, a very hot summer that increased peak demand, faster economic growth than expected. The combination reduced the electricity reserve available. This all by itself would not however, have produced rolling blackouts. The rolling blackouts did not occur because of a lack of capacity. There was plenty of capacity. But the electricity suppliers weren't willing to make that capacity available. Indeed, in February California had more than twice as much capacity unavailable, that is, down for maintenance and repairs, as it ever had in its history. Independent power producers were gaming the electricity market. When a few plants went off-line the electricity price increased, not by 10 or 20 percent, but by 100 and 1000 percent. That's what happens under deregulation.

Leah's point is a very good one - we have these entities, these profit making entities. They've served us well, and if we are going to move into a different era we've got to pay serious attention to adapt these entities to the new electricity context. We need new rules that allow entrepreneurs to make a reasonable profit, but which encourage many more of us to generate a portion or all of our own power.

Lanpher: We're going to go to Mitch in St. Paul - Welcome to Midmorning!

Mitch: Hi Kathryn! I just got back from Norway and I was really struck by their hydropower. Not only did they use hydropower but they tamed the beauty of the rivers by keeping the waterfalls and just having a pipe that went under the waterfalls to generate the electricity. And then I came back, and as I'm driving by the airport in St. Paul, I see, here's the Mississippi River with a coal-fired electrical plant right next to it! What's going on with the psychology of Americans that we're so different than the Norwegians in that way?

Morris: Well, Norway has mighty waterfalls. The Mississippi River isn't a waterfall. But if I may go off on a bit of a tangent, as residents of Minneapolis may know, there is only one waterfall on the Mississippi river, Saint Anthony Falls. St. Anthony Falls was used to generate first mechanical power and later electrical power. That power is the reason the flour mills were established in Minneapolis, and it's why the banks grew up around that neighborhood. But Saint Anthony waterfall also was an obstruction in the Mississippi River, at least until the locks were built many decades later. So a barge and railroad transportation industry grew up on the southern side of the falls, in Saint Paul. In Norway they have an abundance of waterfalls. However, I should point out that about 20 years ago, Norway discovered the North Sea oil and natural gas supplies and has used that to fuel many of its new power plants.

Lanpher: Let's go to Chuck in ....... Welcome to Midmorning!

Chuck: Yes, thank you, you two for taking my call. It sounds as if the investor-owned utilities are shutting back and not going to be getting into the fuel cell business and microturbine business? And I was hoping that maybe you may comment on whether or not they are really going to get into this business.

Morris: Some of them will and some of them won't. Most utilities have a non-regulated subsidiary, usually established in the 1980s, which builds independent power plants. Xcel has NRG. And a number of these subsidiaries of utilities, are in fact forming partnerships with fuel cell companies. But it's very natural for big organizations, of any kind, not to be the pioneers of a new product. And when you have a big organization that's been a monopoly for a hundred years, it becomes even more difficult. I'd urge them, I'd encourage them to get into the decentralized power business, but I wouldn't look to them to be leaders. Katherine or Gabriel, Midmorning's producer, had told me that MPR has its own back-up power plant. All hospitals are required by law to have their own back-up systems. Now these are not all that clean, these back-up systems. They tend to be diesel generators but the point is that there are thousands of power plants, inside of buildings right now in Minnesota. In California when they had a problem with capacity, the state allowed these kinds of on site power plants to begin firing up to meet air conditioning peak demand. Businesses like Minnesota Public Radio or Ramsey County Hospital, when they need to replace a back-up generator they may replace it with a generator that provides most of their power. The utility then acts as the backup power supply. Chuck was asking specifically about fuel cells but there are other technologies available as well. As I said earlier we have a web site <newrules.org> with a great deal of information about technologies and policies and developments not only in Minnesota but around the country.

Lanpher: Now, David Morris ... you say several times in your book that you would like to have the real debate over power begin. What real debate are we missing?

Morris: The debate over deregulation has been framed in a very narrow way - to widen the choice of suppliers that retail customers have. Now that may be important, although the polls indicate that nobody was storming the barricades to demand this. But that's such a narrow definition of choice. What I'm saying is that we should also have the choice of the kind of electricity system we have. And that includes, addressing the same questions we did at the turn of the 19th century. Who would own these systems? Would they be locally owned? Would they be customer owned? Would they be investor-owned? What would the scale of these systems be? Would customers generate their own power? There's a great richness to a debate like that, but the debate over deregulation so far has been two-dimensional.

Let me give you an example of what I mean. I had mentioned earlier that most of the power plants being built now are designed to be fueled with natural gas yet no one is sure how much natural gas reserves we have. Well, if we don't know how much natural gas we really have then it seems that at a minimum we should be designing systems where we can extract the most useful work from every natural gas molecule. A steam driven power plant loses a majority of the energy content of the fuel it burns as waste heat. A central power plant located a hundred miles from where people cannot send this waste heat long distances the way it can electricity. An on-site natural gas fueled power plant, on the other hand, can make use of the waste heat. Thus rather than have an efficiency of 30-35 percent for a central power plant, one could achieve overall efficiencies of up to 85 percent for an onsite power plant.

The electricity debate in 2001 should also take into account the diminishing boundaries between various energy sectors. If we use large quantities of natural gas for our power plants then the generation of electricity will begin to compete with space heating from furnaces and boilers. If we develop fuel cells they will probably power cars as well as homes. So the debate about electricity should really be a debate about energy, about the future scale and ownership structure of our energy system.

Lanpher: Welcome to Midmorning!

Caller: Hi! Thank you. I'm so grateful to you for having this program and having this particular person on the air. I normally live in a small cabin which is heated with solar panels and I'll just mention that one of the things that we're aware of is that, when you make your own electricity you have to maintain it and I imagine in the future there'll probably be service companies and people who have been contracted to maintain this stuff. But, what I really want to talk about is following up on some of the things that have been said by people recently, and particularly about how we make our power. I think that Americans have a real resistance to addressing collective issues of that sort. It's upsetting as a society, and the result is that corporations make the decisions. And maybe I'll just pause there ...

Lanpher: OK, thanks! David Morris ....

Morris: The word corporation covers a multitude of sizes and sins if you will. In the case of electricity we're talking about four investor-owned utilities in the state of Minnesota. The question of control and decision making is key. Here your listeners might be interested in some developments that occurred in just the last few days. Both Duluth and South St. Paul denied Xcel the right to upgrade its distribution/transmission lines. South St. Paul told Xcel that it could do so only if it buried the line, a way to protect citizens from possible electromagnetic radiation. The case of Duluth is even more interesting and instructive.

Here I need to give a little background. In the old days, and by old days I mean only a few years ago, state regulatory agencies were required to approve new power plants and high voltage transmission lines, and to do this they had to issue a Certificate of Need. In states that have deregulated, regulatory agencies no longer need to approve new power plants and high voltage transmission lines. Here in Minnesota, the state legislature this year, in order to accelerate the construction of new large power plants and transmission lines specifically stripped the Minnesota Environmental Quality Board - which is the board that looks at siting - of its authority to decide if the proposed construction is needed or if there are less expensive and environmentally benign alternatives. All the EQB can do, in Minnesota, is to try to minimize the pollution from a power plant or high voltage transmission line. But Duluth, by its own law, is required to take into account both the need for the construction project and alternatives. A few days ago, the Duluth City Council voted to withhold approval of a transmission line until it holds public hearings on its need and possible alternatives. These alternatives could include decentralized power production. These hearings may be some of the most instructive we hold this year in Minnesota.

Also this year the Minnesota Legislature required the Department of Commerce to develop a statewide energy plan by next January. As a result, there's a great deal of activity going on right now. I urge people to join into the conversation, for we are making decisions that will affect us for the next 20-50 years. And that's why we set up the web page <www.newrules.org> because we wanted to give people as much information as possible.

Lanpher: Let's go to Patrick in Minneapolis. Welcome to Midmorning!

Patrick: Hi! I'm actually from California and I'm in town this week for the World Future's Society and I heard the program this morning - I was actually at a conference last night about fuel cells and we were talking about fuel cells in cars, fuel cells in homes and the power grades and all that so, it seems very apropos. And I also, I run a web site - Reality Sculptors - where we talk about fuel cells. We've been designing a completely self-contained house that's going to be designed to live off the grid - have it's own solar power, wind power, fuel cell, etc. and be able to hook in and be able to put power back onto the grid. So, I'm very into the whole concept of decentralized power generation.

Lanpher: OK! Thanks Patrick.

Morris: There are people who want to be self-contained and that's often driven by a desire to prove a point and live a certain kind of self-reliant lifestyle. But the majority of us are going to stay connected to the grid. If you want to be self-sufficient in electricity, there's a higher cost involved because not only do you need a power plant but since any power plant is going to go down sometime you need a second power plant as a back-up. Or you need storage systems, those expensive batteries, which require maintenance. As our previous caller indicated - most of us are not really interested in maintenancing our furnace let alone maintenancing our power plant. So, I think that a majority of us will stay connected which is why we need to develop rules that enable us to stay connected but change our relationship from one of total dependence to one of interdependence.

Lanpher: And, how do you think that conversation's going to go forward?

Morris: It's happening, slowly, incrementally, often without a sense of ultimate objective. For example, a few years ago utilities began replacing meters that had to be read on-site with meters that could be read electronically from headquarters. That was the beginning of a radio link to the customer. In many parts of the country utilities are now, quite aggressively, beginning to communicate not only with your meter, but with your air conditioner. Utilities pay customers a few hundred dollars a year to gain the right to turn on and off their air conditioners for 10 minutes on the hour. In the middle of the summer, when demand is very high because everybody's using their air conditioners, the utility can turn 10,000 air conditioners off on a rotating basis for l0 minutes an hour. The customer won't notice any difference in room temperature, but the system overall will need far less electricity at those peak times.

The next step is to communicate not only with an energy-consuming appliance like an air conditioner but an energy-producing appliance like a microturbine or fuel cell. The utility can then increase supply even as it decreases demand.

Lanpher: David Morris, I'm afraid that we've moved to the end of the hour. I want to thank you for joining us today.

Morris: Thank you so much for having me as a guest.

More Information:

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.

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