Gussing Installs Community-Based Energy, and Flourishes

In 1988,  Peter Vadasz and two of his friends conducted a study to find out how fast money was leaving their community to pay for imported energy and fuels. Four years later, Vadasz was elected mayor of Gussing after running on a platform to create jobs by stopping the leakage of energy dollars. By 1996, he had completed the first phase of Gussing's biomass-fired district energy system, fueled by wood waste from a local forestry cooperative. Over the next ten years, the system was credited with creatings more than a thousand jobs as businesses moved to Gussing to support the system and to take advantage of the stable, affordable heating costs. Gussing became a shining example of how to structure an energy project to benefit the local economy, and the tiny town has now become a major center for renewable energy research. Eco-tourism has also been big.

See the story by Richard Douthwaite here:  Recession to Renewables...the World's Leading Energy Community

Natural Gas Heating Costs: Up Again This Year

 

The cost of natural-gas heating, in use by roughly half of U.S. households, was up about two and a half percent over last year’s
Natural Gas Heating Cost Trend heating season, but data from the nonprofit Local Energy in Santa Fe shows that the cost of heating with natural gas has been rising at an average rate of 12.6 percent per year for the last ten years. (See graph.) Heat from natural gas now costs more than $14 per million BTU, and total household expenditures for the fuel now exceed $60 billion per year in the U.S.

Local Energy estimates that if your gas comes from an investor owned utility, about 85 cents of every dollar you pay them leaves the community. With a locally owned utility, a lot more of the money collected would stay in the community where it would multiply, create jobs, and support independent energy producers.

Crude Oil Up 80 Percent in One Year

 

Crude Oil reached another record high Tuesday, trading at nearly $127 U.S. dollars per barrel on the New York Mercantile Exchange. Crude has risen 80 percent since one year ago, when it traded at just $70 per barrel. The U.S. imports about 10 million barrels per day of crude according to British Petroleum, paying out one and a quarter billion dollars every day to foreign, multinational, and state-owned oil companies around the world. Petro dollars are leaving the U.S. faster than at any time in history. One year ago, the U.S. paid $700 million dollars per day for foreign oil.

Breakers are Popping For Investor-Owned Utilities

Higher utility bills are tickling the limits of people’s ability to pay, and some investor-owned utilities (IOU’s) find themselves in poor cash positions as they struggle to collect on overdue accounts. Xcel Energy of Colorado now disconnects 600-650 customers daily, and reports that nearly one in five of its customers – or about a quarter million accounts – are in arrears. Xcel’s delinquent receivables are now a record $40 million. (Story – USA Today)

Public Service Company of New Mexico is having its own share of troubles as it tries to raise cash in the wake of a plunging stock price. PNM’s stock has recovered a bit from a low below $9 in March, but shares are still worth less than half the $35 they sold for a year ago. PNM shed its gas business in Santa Fe to raise cash, and is looking to sell other assets as well. They hope to fix their troubles by investing another $1.7 billion over the next 5 years, and concern about the rate impact of that investment has prompted Santa Fe to look into creating a public power authority.

Much of the trouble for IOU’s began with deregulation, when utilities confessed that the assets they were holding would be much less valuable in a competitive environment. Nobody could be expected to compete with 1960’s technology running at sub-thirty percent efficiency, could they? Now as these same utilities seek another big round of investment, investors and regulators are wary. Will we get competitive investments this time around?

There are good reasons to believe the answer is “no”. If anything, the regulatory landscape has tipped even further in favor of utilities. Most notable is the new trend toward revenue guarantees that ensure utility investments can be recovered in rates even as throughput drops on the system. But investors must be wondering why they should buy assets that can be so easily bypassed with distributed generation.

Besides, investors have better opportunities in the emerging “clean tech” sector, where distributed generation and load management technologies have made bi-directional, internet-style grids a reality. The Nordic countries still lead with their “active grid” technology, wherein connected resources actively participate in the health of the network, and soon enough these companies and their investors will pry open the U.S. market.

If active grids do get built here in the U.S., where would it leave our utilities? Waving their revenue guarantees in front of legislators and demanding a bailout, is my guess. It’ll have to be the taxpayers, because ratepayers will have left the system en masse to create active grids that can operate in parallel or stand-alone at will , delivering much higher efficiency.

The local economic benefits of creating an active grid that supports local, independent energy producers are too great to ignore any longer.