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Musings on a Rate Hike

Paul Kando

In the news: my electric bill may go up $2 per month to compensate the Central Maine Power Company (CMP) for the cost of repairing the damage caused by the ice storm that disrupted service to thousands of Maine households over the holidays. That’s only fair, given that at one point over 20 percent of the utility’s customers were without power and the cost of repairs to downed wires and snapped poles must have run into hundreds of thousand dollars. As always when such disruptions occur, some of the same people who resent even a modest rate hike clamor for burying the power lines underground. Well, the cost of constructing an underground line is about $1,000,000 per mile and CMP has about 23,000 miles of line in place. Burying all of them would therefore cost $23,000,000,000, a nice chunk of change we, ratepayers, would have to pay for. Burying only 20 percent of those lines would still cost $4,600,000,000 -- no pocket change.

Iced power lines
Ice coated power lines
photo credit: Wikipedia

There may be a better way than burying power lines to avoid service disruptions to our homes when a major storm cuts our power. My rooftop, for example, can accommodate solar panels that could generate as much as 8,000 kWh of electricity per year – almost twice what I use. If I simply connected these panels to the grid, I could sell power to CMP when the sun was shining and buy power when it did not. I would save money but service would still go down when the grid was disrupted – otherwise my grid-connected solar electricity could electrocute linemen working on downed lines. However, I could add a battery bank, costing less than a good quality generator. The solar panels could then charge these batteries and the house could draw power from them, with any excess still going to the power grid. When the power went down, the house would be automatically disconnected from the grid and the battery bank would serve as my backup power source even over several days, noiselessly, without burning any fossil fuel.

As rate payers, and as a society, we should invest in distributed power generation, instead of dreaming about buried wires, mitigating the vulnerabilities inherent in a centralized system. Distributed power generators (our houses, for example) could help supply the grid with power and also provide protection from power outages when the grid went down. There are other advantages to distributed power generation, including job creation, but, to keep things simple, I will not detail those here.

Decentralized grid systems relying on a mix of central and distributed generators are already operating in several European countries. In Germany, for example, the share of distributed, renewably generated electricity has reached 23% by 2012. The country is on track to reach 35% by 2020 and 80% by 2050. Distributed renewable electric generating systems are financed by private investment, thanks to the country’s Renewable Energy Sources Act, known as the Energiewende. That law, and similar ones in over 50 countries, establishes a feed-in tariff to be paid for the electricity distributed generators provide to the power grid. The result is a stable investment environment in which, through energy cooperatives, even the smallest investors – average rate payers – can participate. Indeed, in Germany only 12% of the renewable energy investment comes from large corporate utilities, while almost half of the distributed power generation is financed by small investor cooperatives. An individual co-op member’s share averages 4,000 euros ($5,200). This is new capital, heretofore not available to the power sector.

If we can countenance a $2 rise in our power bills after a single ice storm, without solving the long term problem of power outages disrupting our lives and economy, we would be smart to consider enacting a Maine feed-in tariff law, so we could all pitch in to increase the security of our electric power supply. Such a law (LD 1085) is being sponsored by Sen. Chris Johnson. At you can read a good summary of the bill’s details. If you agree, lobby your legislators in support of it. After all, there is nothing more satisfying for a citizen than being part of the solution to common problems like devastating power failures and our needless reliance on burning fossils for energy.