Frustrated by Outdated Grids, Consumers Are Lobbying for Control of Their Electricity
Clyde, Ohio, with a population of around 6,000, has two electric grids. One is owned by the city. The other, now serving just a handful of customers, is controlled by a subsidiary of a utility that provides electricity to 6 million customers across five states. When Clyde residents voted to localize their electricity in the 1980s, buying the existing grid was exceedingly expensive, so they built their own.
Clyde made the switch because of money. At the time, the city manager thought the town was paying too much, and a study commissioned by the City Council confirmed that a locally run electric system would save residents and local businesses $62 million over the next decade. When electricity began flowing through the new lines, customers of the new utility paid 25 percent less than they had to the legacy provider.
Decades later, a number of localities in the United States are seeking to take control of or reimagine their electric infrastructure for a different reason: climate change, and the slow pace at which the existing system has adapted to it. From Ann Arbor, Michigan, to Augusta, Maine, consumers, governments and clean energy advocates are lobbying to form local utilities that they say would make grids more resilient amid severe weather, speed the deployment of clean energy, and offer customers more choice.
“The increasing impacts from climate change—the extreme weather events we’re experiencing, are laying bare how vulnerable our existing infrastructure is and how it’s just not working,” said Missy Stults, sustainability and innovations director for the city of Ann Arbor, which is considering a range of options for reworking its grid.
“We need to think about our electric system a little bit differently right now, and we can,” she said. “What a gift: With technology, we can actually think about a different system.”
In 2019, Ann Arbor’s City Council passed a “climate emergency” ordinance and set a target of making the town reliant on renewable energy for 100 percent of its electricity by 2030. That goal puts a greater focus on the electrons traveling on the grid than on who owns it, but some residents argue that local control could help advance the clean energy transition. Equally important is dealing with weather-related outages: Winter storms in February encrusted power lines and poles with ice and at one point left 40 percent of customers in Ann Arbor without electricity.
Statistics show that annual weather-related power outages in the United States have doubled over the last two decades as ever more powerful storms batter the nation’s aging grid. “I don’t think this is the electrical system that’s going to bring us into the next 100 years,” Stults said.
In Maine, residents will vote in a November referendum on whether to replace the legacy utilities Versant Power and Central Maine Power, the state’s two biggest electricity providers, with a nonprofit public utility called Pine Tree Power that would be governed by an elected board and run by a private operator.
Seth Berry, a former state legislator who co-founded the group organizing the November ballot initiative, says climate change is the main reason he ran for office in the first place. Previously he introduced two unsuccessful bills to create a public power utility in Maine. The governor vetoed the most recent iteration in 2021.
Berry says the state’s investor-owned utilities, which do not own generation projects, have obstructed small-scale clean energy installations in favor of bigger ones that require large power lines that bring in money. And he argues that “direct, democratic control” of electricity would be better suited to a future in which electricity powers more of daily life.
Maine ranked second to last nationwide for electricity reliability on the basis of power failures in a 2021 report from the Citizens Utility Board, an Illinois consumer watchdog. The state, like many others, has also struggled with delays in connecting small solar projects to the grid. And in 2016, regulators frustrated solar advocates by changing how homeowners’ small systems were metered, effectively reducing compensation for the electricity they generated. Berry sponsored a bill that reversed that metering policy three years later.
Legacy Utilities Push Back
Maine’s referendum fight has grown heated, with utility-backed groups spending about $15.5 million to oppose the measure. That outlay dwarfs the roughly $600,000 spent by the group organizing support for the switch, Our Power. (Berry no longer works for the group.)
BJ McCollister, campaign manager for Maine Energy Progress, a political action committee funded by Versant’s parent company, calls the effort a “hostile takeover.” He warns that shifting control over the utilities’ infrastructure could cause uncertainty during the transition and actually result in “massive delays” in connecting solar projects.
The grid was not originally designed to connect those types of projects, a Versant spokesperson said in an email, so they “need to be studied extensively to connect in a way that doesn’t negatively impact nearby customers.” Maine has seen a significant influx in such projects, which may require upgrades to the grid before they can be connected.
A spokesperson for Central Maine Power said that regulators control the pace of interconnections. “There is no financial incentive to delay projects,” the representative said.
While most customers in the United States still get their electricity from investor-owned utilities, which operate at a profit and are overseen by state utility commissions, more than 49 million people across the country are already served by public utilities, nonprofits overseen by elected officials.
The scope of the proposal in Maine is “very unusual,” said Ursula Schryver, vice president for strategic member engagement and education at the American Public Power Association, a trade organization that represents public power providers.
And entrenched utility companies will often wage a fight against campaigns to displace them, she said. “It takes a lot of time and energy to go through that process,” she said—often a decade or more.
Still, concerns about a warming world have seeded interest in the possibility of an electricity network configured to harness clean energy in all of its forms, with users as active participants.
The traditional configuration of the U.S. grid, with electricity running one way from big generators to end users, began when companies started stringing lines and selling electricity in the late 19th century. Small systems eventually grew to cover large areas, with big utilities overseeing networks of transmission lines that connected to the local grids that distribute electricity. Fossil fuel plants, disproportionately located near low-income areas and communities of color, provided power at any time of the day or night.
Clean energy could upend that design. Big utility lines are still crucial for transporting electricity from large projects, but communities can now produce their own power. Rather than delivering electricity one-way through power lines, utilities must now figure out how to use the electricity that customers generate. And as more people install distributed technologies like home solar systems and batteries, they will change how much grid electricity people use and at what times.
Meanwhile, the existing grid is aging and increasingly vulnerable to extreme weather. In a review published in 2015, the Department of Energy found that 70 percent of transmission lines and large transformers were 25 years old or older.
“We originally designed the grid to work in one direction,” said Patricia Hidalgo-Gonzalez, who directs the renewable energy and advanced mathematics lab at the University of California, San Diego. “As we have these climate events, we’re seeing that this scheme doesn’t work anymore, because if we start having links break down, we don’t have enough redundancy for these communities to continue being powered.”
Like Maine, Michigan ranks in the bottom 10 states for electrical reliability, according to the Citizens Utility Board. Rather than purchasing a grid that often fails, Ann Arbor is considering establishing a “sustainable energy utility” that will depend on microgrids, which connect homes and businesses to a local power source like renewable energy. If the plan moves forward, the city-managed microgrids would not connect to the larger grid managed by the investor-owned utility DTE.
This would impose certain constraints, like limiting the distance from which the new utility can transport clean electricity. But Stults said it would free the community from other burdens, like the need to finance improvements to an aging grid. “Owning that grid means I own a dilapidated, antiquated piece of infrastructure,” she said. “That doesn’t excite me.”
Expanding Consumer Options
The new configuration in Ann Arbor could look something like the dual system in Clyde; residents would have the option to buy electricity from DTE or connect to both the legacy utility and the sustainable energy utility. DTE, meanwhile, said in an email that it was committed to helping Ann Arbor reach its renewable energy goals and was installing equipment underground to increase reliability.
The city would build some of its own grid infrastructure, including enough lines to network homes that are already equipped with solar and energy storage as well as community solar projects that distribute electricity to homes and businesses via the local grid. Under that scenario, the infrastructure would be city-owned and the utility would pay to install solar panels on residents’ rooftops.
Supporters of new public power agencies say the model can help build a more equitable electricity system by eliminating the private profit factor and connecting more people to clean energy technologies that have been largely available only to wealthier homeowners.
“This is all about moving a public service, our energy and transition, outside of the realm of financial speculation and wealth accumulation,” said Johanna Bozuwa, executive director of the Climate and Community Project, at a virtual event hosted by the Center for Biological Diversity in April.
Stults views creating the sustainable energy utility as a starting point that would allow Ann Arbor the flexibility to pursue other options in the future. The city is also studying whether it would make economic sense to try to buy the local grid infrastructure owned by DTE and form a more traditional municipal utility, an idea backed by a local grassroots group. And advocates like Stults are promoting state legislation that would permit the creation of so-called community choice aggregators, which allow nonprofit local agencies to buy electricity and use the utility-managed grid to transport it.
That model has proliferated in California, where the push for change goes beyond setting up public entities. Sunnova, a Texas-based private home solar and energy storage company, recently proposed building entirely new communities in California that it would outfit with microgrids. The state’s utility regulators rejected the idea in April after some consumer advocates, community choice aggregators and utilities opposed it.
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Some caution that such proposals from private energy providers could end up replacing one monopoly with another. But several environmental and clean energy groups argue that the idea could help promote the expansion of local renewable energy and customer choice.
“Any method that we have of creating some competitive pressure on incumbent monopoly utilities” is “really important,” especially when it comes to local poles and wires, said John Farrell, who leads the energy democracy initiative at the Institute for Local Self-Reliance, an advocacy group where he also serves as co-director.
Municipal power has existed in the United States for more than a century. In the early decades of the 1900s, thousands of towns operated their own systems after being bypassed by utilities that found it would not be lucrative to serve them. Eighteen public power utilities have formed in the last 20 years, according to the American Public Power Association. Nonetheless, the number of such utilities has hovered near 2,000 since 2016, perhaps in part because of the challenges inherent in forsaking legacy utilities.
In Boulder, Colorado, a decade-long effort to form a publicly owned utility to address climate change ended in 2020 with an agreement with the legacy utility, Xcel Energy, to reduce emissions from its electricity supply by 80 percent by 2030 and to help the city reach 100 percent renewable energy by the same year. In California, the city government of San Francisco, which already controls much of its own electricity generation, has been fighting since 2019 to buy its grid infrastructure from the utility Pacific Gas & Electric.
The Costs of Going Local
Such battles are costly. Clyde elected to build its own grid because the estimated price of construction, $3.5 million, was a fraction of the $40 million sale price quoted by the utility Toledo Edison for the existing grid. Public power agencies also have to take on operating expenses while contending with state policies and regulations dictating what electricity resources they can access and how they are structured.
Converting investor-owned utilities to public ownership “tends to be not cost-effective for retail customers,” said Paul De Martini, a managing partner at Newport Consulting Group who served previously as vice president for advanced technology at the utility Southern California Edison.
But distributed energy technologies have become cheaper, and clean energy incentives like those included in the Inflation Reduction Act could make them more widely available. In California, Sunnova expected the electricity costs for its privately managed microgrid communities to beat utility rates.
Ann Arbor is still analyzing how much the proposed sustainable energy utility would cost at different levels of participation. But initial estimates suggest that its rates could undercut DTE, Stults said.
Besides, she said, sticking with the established utility means shouldering other costs associated with a warming world.
“We have this technology that is in direct contrast to a system that’s not working well,” Stults said, citing microgrids, batteries, and distributed energy resources. Instead of embracing that, “investor-owned utilities are putting up walls around their existing infrastructure or making it really, really hard and cumbersome for people to embrace those alternative techs.”
“That’s not going to solve the climate crisis.”
<div class="post-author-bio"> <div class="image-holder"> <img width="300" height="300" src="https://insideclimatenews.org/wp-content/uploads/2022/06/Emma-headshot_400x400-300x300.jpg" class="attachment-thumbnail-medium-square size-thumbnail-medium-square" alt="Emma Merchant" decoding="async" srcset="https://insideclimatenews.org/wp-content/uploads/2022/06/Emma-headshot_400x400-300x300.jpg 300w, https://insideclimatenews.org/wp-content/uploads/2022/06/Emma-headshot_400x400-150x150.jpg 150w, https://insideclimatenews.org/wp-content/uploads/2022/06/Emma-headshot_400x400-64x64.jpg 64w, https://insideclimatenews.org/wp-content/uploads/2022/06/Emma-headshot_400x400.jpg 400w" sizes="(max-width: 300px) 100vw, 300px"> </div> <!-- /.image-holder --> <div class="content"> <h3 class="author-name"> <a href="https://insideclimatenews.org/profile/emma-foehringer-merchant/"> Emma Foehringer Merchant </a> </h3> <h4 class="profile-subtitle">Contributor</h4> Emma Foehringer Merchant is a journalist who has covered environmental issues ranging from disasters to wonky energy regulations to air pollution. She’s reported on the environment and energy for publications including The Boston Globe Magazine, The New Republic, Vice News, and Grist. Most recently, Emma covered clean energy as a staff writer for Greentech Media and helped alums of that organization form a new publication called Canary Media. She’s attending MIT’s Graduate Program in Science Writing and holds a bachelor’s degree in environmental analysis from Pomona College, where she lived through a California drought while studying how climate change is impacting the state’s environment and people. </div> <!-- /.bio --> </div> <!-- /.post-author-bio -->