Will Santa Sleigh the Monopolies? (Episode 62)

Date: 27 Dec 2018 | posted in: Building Local Power, Podcast, Retail | 0 Facebooktwitterredditmail

Host Chris Mitchell is joined by ILSR Co-Directors Stacy Mitchell and John Farrell for a year in review. The trio take a look back on developments in the movement against corporate concentration in the past year and reflect on what more it’ll take to grow local power in 2019.

Stacy explains how public opinion on Amazon has shifted this year as more and more people realized the search for HQ2 was really a play to gather data and further advance Amazon’s stranglehold on the economy. Chris and John discuss how they saw the truth about Amazon come to light in the media.

They also discuss massive shifts in the energy sector, as batteries proliferated this year making it possible for people to store the renewable energy they produce locally. John details how individual actors are collectively transforming the energy system, including the million customers in California that have installed solar on their own rooftops.

Tune in for a lively recap of 2018!

 

This year was a moment when people became increasingly concerned about the ways that Amazon’s tentacles are reaching into every part of the economy, and not just dominating markets, but really controlling markets in ways that are deeply disturbing.

Chris Mitchell: So it’s the end of 2018, and last year we got together here, John Farrell, the now co-director of The Institute for Local Self-Reliance. Welcome back John.
John Farrell: Thanks for having me Chris.
Chris Mitchell: And Stacy, the other co-director, Stacy Mitchell. Welcome back.
Stacy Mitchell: Nice to be here.
Chris Mitchell: So I started to say that last year the three of us got together for building local power and we talked about monopolies and sort of the year end review and things like that, and we thought we’d do it again.

The big question on my mind is will Santa sleigh the monopolies? That’s my big hope for the end of the year.

John Farrell: How long have you been working on that concept Chris?
Chris Mitchell: Michelle and I decided that it’s probably in bad taste but I should do it anyway, but I came up with it about 30 minutes ago. So we’re going to talk some about Amazon, we’re going to talk about utility, where that’s going and how that’s going to really shape the future.

I mean, you know, it’s funny, we were talking a little bit about how we were afraid won’t think it’s very exciting, but frankly this is just the future of like whether or not the planet is habitable, what price we’re paying for energy, and things like that. So we’re going to talk about what John’s been looking at and the timeline in which the entire electric system is changing, where we get our energy from.

We’ll talk a little bit about broadband regarding AT&T buying Time Warner and the Department of Justice really trying to challenge that, even though it has kind of a flawed argument and it seems clear that the world is stacked against it.

But let’s start, Stacy, with Amazon, a year in review. And is it two years ago you released your big Amazon report around this time?

Stacy Mitchell: That’s right. We released Amazon’s stranglehold in November of 2016.
Chris Mitchell: And I think when we did that, I mean that was the time … There was no real opposition to Amazon. There was no even real popular sense that there was anything even wrong with what Amazon was doing.
Stacy Mitchell: That’s right. I mean it’s changed dramatically in the last two years, and especially this year. I mean I think the Whole Foods acquisition in 2017 was moment when people kind of woke up and looked around and said oh, there’s this thing called Amazon and they really have big intentions.

And then this year was a moment when people started to really look at what those intentions are and became increasingly concerned about the ways that Amazon’s tentacles are reaching into every part of the economy, and not just dominating markets, but really controlling markets in ways that are deeply disturbing.

Chris Mitchell: I’m curious, John, did you have a point in this year in which you felt that that became clear to you, that there was kind of a popular sentiment building against Amazon?
John Farrell: In a couple of different instances, and it’s hard to distinguish sometimes between what I started to hear as just sort of a purveyor of news and what I started to hear because I work with Stacy and her stuff comes across my feed.

But I think … You know, I think there was … You know, that acquisition I think got some people starting thinking, but then, you know, Stacy has been relentless in terms of putting out more information to help people understand what’s going on, so she had a report about procurement and the way in which Amazon is involved in public procurement that I saw, you know, circulate in a lot of circles.

I saw her stuff about H2Q as that decision was kind of coming to an end, so I … To me it’s like within the last six months all of a sudden it has gone from being like there were a couple of different like select pockets of people that were caring about this, economists, you know, folks that look at online shopping or something like that, and all of a sudden now everybody is talking about it, like this is the thing to focus on when you talk about concentration in the economy.

Stacy Mitchell: Yeah, I think that’s right. And a lot of this is because of the so-called HQ2 sweepstakes that Amazon set up. I mean as people recall, about a year ago Amazon announced that they were going to create a quote second headquarters and they were going to open up this bidding process and cities across the country … 238 cities across the country, a few in Canada, submitted proposals, went to kind of acrobatic lengths to put together all this information for Amazon, and also packaged it with a lot of giveaways, in many cases subsidies, tax incentives.

And then Amazon at some point in the year announced that they’d whittled the list down to 20, and there was another like flurry of media coverage. And then something began to happen in right around September of this year. I think a lot of people started to realize that this whole thing was a ruse. I mean it was like it had worked as a publicity stunt for them for months and months and months, and then something started to shift in the public consciousness.

And it was really interesting to watch, because the reporting started to change. Amazon, the way that they talked about it, started to change, so it was really clear that people suddenly started to think oh, this is a company that is using its power to gain government favors, to manipulate all these local governments into turning over this incredibly valuable data, and that this was really a ploy by a monopolist basically that’s a threat not just to the economy and like the opportunity that we have as workers and producers, but like a threat to democracy and to like our ability to run our own cities and our own lives.

Chris Mitchell: Yeah. And one of the things I remember is when it was announced, I felt that you and Gregg Leroy were the ones popping up on my Twitter feed, the only ones that were saying this isn’t a great deal, this is a problem.

And even at times I remember thinking oh, like I agree, but I don’t want to alienate, you know, my few followers that still listen to me by just harping on Amazon. But definitely toward the end it seemed like everyone was saying this is not good and this is a sign that something is wrong.

Now let me ask you this Stacy. You were on the Hasan Minhaj show, The Patriot Act, on Netflix, talking about this, an entire episode about Amazon and antitrust. To me that’s another sign that things have shifted. What did you take away from like a popular show aimed at a non-policy audience talking about this?

Stacy Mitchell: Yeah, that’s right. This whole huge long segment on antitrust, on monopoly policy, all focused on Amazon. It was super well researched and smart and hit all of these. I mean he was talking about the consumer welfare standard, you know, which is the bad standard that was adopted in the 1980s that’s really hamstrung our ability to deal with corporate power, and that a lot of people are now calling, you know, for that to be changed and gotten rid of.

And I got a little … As you mentioned, a little cameo along the way in his montage on Amazon, and I just … It was so encouraging, because I thought there’s a way in which this has entered the mainstream popular discussion. I couldn’t have ever guessed that this would happen, but it’s critical, because I think, you know, we have, as you noted, economists and some policymakers and other folks who are looking at this and are deeply concerned about Amazon and about monopolies in general.

But what is going to actually make action happen is going to be popular will. And so the fact that this issue is resonating, I think people in their own lives know that there is something fundamentally wrong with economy. We’ve got polling on this now that shows that most people, the vast majority of people in both parties believe that monopoly is a problem, that big companies have too much power, that our local economies, or job opportunities are all being squeezed by these company.

So I mean it’s interesting in the context of Amazon, because there’s this way in which we’re sort of of two minds. A lot of people enjoy Amazon as consumers, and at the same time are deeply concerned about its power, and those things can be true at once, and we really saw that this year.

Chris Mitchell: Let’s talk a little bit about New York and its relation to Amazon, because, John, you had mentioned I think the surprise that we have with kind of actual local organizing … Kind of an uprising against the state and the city of New York for welcoming Amazon in. What surprised you about that?
John Farrell: What I find really surprising about the reaction in New York is that I thought that even though people, like Stacy then and many others that have picked up this tread, were going to criticize Amazon for trying to soak up all these public benefits, that folks would just shrug their shoulders and be like well, that’s the way the game is played. Look, another town is going to give out a bunch of money, and of course it’s going to be a town that we thought would get Amazon anyway without having to do any bidding, whoop-de-doo.

And then all of a sudden we start to see New York City Council members re-tweeting Stacy’s stuff and saying hey, this is really kind of crappy, like this might not actually even be a good deal for us. We don’t want to be an HQ2 city. We could more profitably invest this in a lot of other local initiatives.

So I think that’s where for me it felt like this notion that Amazon is a problem really had some traction. When you have cities willing to turn down the potential to host this headquarters and say actually we have lots of other ways we think we can support our economy that are a much better deal.

Chris Mitchell: Yeah. Stacy, I’m curious as well. My impression is actually that some of the City Council members who may have signed off on Amazon in that deal to begin with then changed their tune.
Stacy Mitchell: That’s right. I mean there was a public letter of like support from a variety of like state lawmakers and I think some city councilors as well. I’m not quite sure who all that went out to, but a lot of people signed on to it, and a number of them when this deal was announced rescinded their support of it.

And, you know, I think John is right. I mean I was surprised, and it’s been great to see … I sort of expected that people would be maybe upset about the subsidies and there may be some debate about getting something in return for those giveaways, that kind of thing.

But instead what we’re seeing is people are like definitely no subsidies, and we don’t even think we want Amazon here at all. And it spoke about we don’t want to be part of supporting this monopoly and all of the negative impacts that it’s having, but it’s also like looking at what this is going to mean Queens and all the ways in which local people are going to lose because of Amazon.

It’s just galling too when you have the world’s richest man … I mean Jeff Bezos is worth something like $160 billion. It fluctuates, but something like that. The idea that taxpayers, in a state where the school systems are really struggling and there are a lot of other problems, are going to be ponying up this incredible amount, billions of dollars. It’s just so galling to people. There’s something about that that I think is really crystallized what’s at stake with Amazon.

Chris Mitchell: nature is a claim that New York is still better off with Amazon there because many feel that if Amazon doesn’t create a certain number of jobs then they won’t get these subsidies, and that the subsidies are supposedly coming out of taxes that Amazon will be paying.

So I’m curious if you can respond to the argument that New York, even though they’re giving all these subsidies, is better off because Amazon is coming because of how it’s structured?

Stacy Mitchell: Yeah. I mean Cuomo, Governor Cuomo of New York, who, you know, is the lead negotiator of this terrible deal, he’s made this argument. He’s made this exact argument that you’re saying right now, and I just think it’s ridiculous for a couple of reasons.

I mean the reason Amazon is going to New York and also the Virginia suburbs of Washington, DC is because that’s where they think they can find and attract the tech talent that they need, and that’s the only reason. The reason they split the HQ2 into two locations is because they recognize that they wouldn’t be able to find enough of the right kinds of workers in one locations, so there are very few places that actually work for what it is that Amazon needs.

So, you know, a smart negotiating strategy on the part of the city is to recognize that and say oh, you need to be here. You need New York, so what is it that you’re going to do to support this city, to help us alleviate affordable housing, the strain on the transportation system? I mean that’s the right way to go into that negotiation, instead of let me figure out how we can give away, you know, the public bank to a private entity.

Chris Mitchell: So HQ2 … I mean this is certainly a national story, if for no other reason than the 200 some cities that gave all this data to Amazon, but it’s really part of this larger issue of how the economy is working or not working for communities across the country. You just did a Building Local Power talking about the dollar stores, and you released a report on the dollar stores. And I think it’s safe to say it’s swamped our Twitter feed. There’s been a lot of reaction. I was just at an event about preemption, and this guy comes up to me, and he’s like, “Hey, I’m from Louisiana, and I loved the dollar store report. Can you get me a connection to Stacy?” This thing went everywhere. So I’m curious if you can talk a little bit about the reaction to it, and now that it’s several weeks since it’s out, what you your thoughts are?
Stacy Mitchell: I think you’re right. The story of Amazon going to the Washington, D.C. metro and New York metro is part of this story of as the economy increasingly concentrates and you have these superstar firms, you also have a few metros that are like the superstar metros. And I don’t want to gloss over inequality within those places. There are a lot of neighborhoods that are part of those cities that are really suffering and losing out. Then, across the country, the other part of the HQ2 story are all the places that have been left behind by this economy, that have had their economic foundations pulled out from under them, because mergers have caused the local plant or the local … The headquarters of the regional company that’s been swallowed up is now no longer there. The local bank is gone. The main street businesses are gone. The farming economy has been screwed because of agribusiness.

So it’s all these second tier cities, and rural areas and small towns are really struggling. And one of the things … At ILSR, we’ve been getting a lot of email for the last couple of years about dollar stores. People writing us and saying, “I’ve got Dollar General coming in, and we’re really concerned about what it’s going to do to the community, or maybe after it’s come in, the impacts that it’s having.” And so we decided this year to take a deep look at this. And Marie Donahue on our staff led our research on this and started looking at this question of dollar stores. Dollar stores had a … The two major chains, which are Dollar General and Dollar Tree, which owns Family Dollar, they had about 20,000 locations in 2011, at the end of the financial crisis, and today they have about 30,000 locations. And they have plans to grow to a total of 50,000 locations in the next few years. They’re expanding in places where they feel like that the economy is hopeless and that they can find sort of a permanent state of poverty and economic distress.

Chris Mitchell: I’m just so eager on this point, and I’m curious, because I think I saw this reflected … I didn’t read the full Dollar General store — don’t fire me — report. But one of the things I saw, was that much like during the subprime crisis, we saw that banks were really treating non-white applicants, particularly African-American applicants, worse. And so even if you had a higher education, you were getting worse loan terms than a person who had a much lower education but had white skin. Now, one of the things I thought I saw was that Dollar General, the dollar store, specifically, were going into areas based more on … not just low income neighborhoods, but specifically higher incidences of other races, that people that are not white. African-Americans, Latino perhaps.
Stacy Mitchell: That’s exactly right. So as we were doing this research, we got a call from a city councilor in Tulsa, Oklahoma, Vanessa Hall-Harper, and what we learned is that the city of Tulsa has over 50 dollar stores. And she told us that many of them are concentrated I her district, which is North Tulsa. It’s a predominantly African-American neighborhood, and so we decided to map dollar stores in Tulsa. And incidentally, this neighborhood has no grocery stores. Most people are having to buy their food at a dollar store with very limited selection and no fresh produce.

So we decided to map dollar stores, and we did one map that looked at dollar stores in Tulsa with census districts based on the percentage of poverty. And if you look at that map, it’s hard to find any correlation. I mean, I thought, going into it, that we would see higher poverty districts. Those would be where the dollar stores were, it would be clear cut. Then we decided to do another map that mapped dollar stores in census districts by the share of residents who identified as either African-American or black. And you look at that map, and it’s like, “Bingo! There’s the correlation”. I mean, it’s really striking.

And we’ve now … Since this report came out, we’ve just been inundated with email messages and Twitter messages, people telling their own dollar store stories from New Orleans, Detroit, rural Louisiana, and there’s this consistent pattern of these companies targeting areas based on race.

Chris Mitchell: Right. I think it’s not just poverty. It’s not just low income. It’s powerlessness that they’re going after, because they want to trap those people into that cycle.
Stacy Mitchell: There are two explanations that we’ve come up with for why that is, and we can’t prove that these are true, it’s just our guesses, kind of looking at the information. One is that dollar stores target areas that already lack grocery stores. And we know that banks are less likely to lend to African-American entrepreneurs. We know that supermarket chains often bypass black neighborhoods. And so those are places that are already a food desert, and so the dollar stores see an opportunity.

And then I think you’re right. I think another part of this may be that they think, “Well, these are areas that don’t have political power.” I mean, in Tulsa there are dollar stores that are sometimes just a few blocks away. I mean, they’re packing them into this district. And I wonder if these companies think, “Well, if we try to do that in a whiter neighborhood, we probably wouldn’t get away with it.” But there’s a lack of political power, at least that they perceive. In the case of Tulsa, the neighborhood has fought back, and they’ve now passed an ordinance that has become a model that cities across the country are looking at. So it’s great to have a story of some of that political power coming back.

John Farrell: Stacy, to me it seems … I saw one of the threads on Twitter, and a response to this I thought was really striking, because they described what is happening with dollar stores as sort of the subprime economy, the permanent subprime economy, that the financial crisis was caused by banks creating all these tricky loans to extract wealth from lower income folks, for people of color, who had traditionally not had access to credit, thought they were finally getting a chance to get into the American dream, and got utterly screwed. And now, in its wake, there’s the subprime everything. First there’s the subprime mortgage, now there’s the subprime grocery store or the subprime retail store.

And so … You used the term food desert there, which is that one plausible explanation, right? They’re coming in where there hasn’t been a grocery store. But in some ways, it’s more like grocery deforestation, right? It’s Wall Street coming in and saying, essentially, “We’re going to eviscerate this neighborhood by not lending to the people that live there, to the entrepreneurs that would provide the full service grocery store, or any of the other kinds of services. Instead, we’re going to back these extractive companies that come in, build overwhelmingly to drive out other local merchants that would help retain some local wealth, and not even give people access to the basic things that most people expect in a neighborhood, like a grocery store or fresh produce.”

Stacy Mitchell: That’s right. I mean, I think you’re absolutely right about the way that the capital system, the way that Wall Street works in terms of where capital is allocated. The fact that we don’t have as strong a local banking system as we used to have, that’s really driving a lot of these decisions. I also don’t think you can’t overlook Walmart’s role in all of this. I mean, Walmart has marched across the country and devastated a lot of the local food system, a lot of local grocery stores, a lot of local retail. Walmart now controls 25% of the food system in the country. One out of every four grocery dollars go to Walmart. And that’s meant that there are neighborhoods and small towns that have really nothing.

Walmart, in the region, has pulled all the dollars away for the most part and then left these places that are like a denuded landscape. It’s like an ecology. It’s like when you have a landscape that’s been compromised in some way. And then the dollar stores are like the invasive species that prey on that and just multiply and come in. And in doing so, they’re not just a symptom or a byproduct of the deeper problem, they’re also making it worse. They’re coming in in such numbers that they make it hard for new local businesses and grocers to get started.

And in some cases … I mean, they’re not just going into food deserts. As we talk about in the report, there are a lot of places where they’re going in and there is still a local grocer that managed to hang on through Walmart and all the rest of it, and the dollar store is the thing that tips them over and causes them to close. So you’re right, we’re increasingly living in this world that’s two different places. There’s Whole Foods land and then there’s dollar store land, and people don’t cross over very much. And if you live in Whole Foods land, it’s very hard to even see that there is a dollar store land.

So, my turn to ask the question. So the first one I have is … It’s the end of the year, and we’re in our big annual fundraising drive to try to scare up the donations that matter so much to us, and to what we’re able to do in 2019. So Chris, why do you think people who are listening to this should chip in to help ILSR?

Chris Mitchell: Well, I have to say … We give recommendations at the of the show, traditionally, but I thought I’d plug a book that I think explains some of it. And it’s a book that we’ve talked about some internally, and I hear talked about all over the place. It’s called Winners Take All by Anand Giridharadas,  and it explains how, I think, a lot of the big non-profit organizations … They’re really trying to figure out how to tackle the problems without changing the structure of the economy and things like that. And it’s a great explainer as to how this develops and how these people think, and that sort of a thing. And in my mind, it really solidified the importance of organizations like ours. And so I would just really encourage people to maybe read the Wikipedia summary of it, come to ilsr.or/donate, that’s ilsr.org/donate, then buy the book from a local bookstore, read it, and give to us again in 2019.

But the fundamental effect is that it’s organizations like ours … I mean, in particularly, I would plug Stacy. There’s a reason we put so much emphasis on your work at the end of the year. There’s no one else doing the kinds of stuff you’re doing, and we need people to support that, to make sure that we can keep doing it.

John Farrell: I would put it even just more specifically, in the same way that we started our conversation with Stacy about Amazon, asking the question about when did this hit the news. I think you can trace back, in some ways, the entire national conversation about why Amazon is a problem as a platform monopoly, as a company that wants to control all the methods of online commerce, to ILSR’s work. It was really Stacy doing the deep digging to understand how Amazon’s platform worked, what it meant for local merchants, how it undermined cities through its use of public subsidies for avoiding sales taxes, and how it uses its platform to co-opt merchants, to understand their products and their customers, and then to take them.

ILSR tries to do that in all of the different pieces of the economy, to help us understand, how is it that the players that are out there work? Who is it that has the power in the economy, and in what way are they trying to use that power to either advantage or disadvantage our communities? And so Stacy’s work does that with Amazon. Your work does that to help people understand that basic question of access to the digital economy. In my work, we talk about the fact that energy is this opportunity to transform to not only an environmentally benign way of doing business, but a way that communities can keep wealth in their economy.

Our Waste to Wealth program talks all about all of these inputs into our system that can be preserved, rather than burning them or throwing them away. And we fundamentally do that in a way to explain how there are these incumbent powers that have a way of doing things that may not be good for our economy, and how to understand not only why that might be harmful to us, but how we can solve that at the local level. And there’s just not a lot of other organizations that take that perspective.

Chris Mitchell: I see Stacy leaning in, but I just wanted to say, that’s ilsr.org/donate.
Stacy Mitchell: Well, I want to say first, I appreciate all that praise. We have some great allies who’ve also been leading the way in grappling with what Amazon is all about…Out of helping people understand it, folks like The Open Markets Institute, Lina Khan who’s a fellow at Columbia right now, Scott Galloway. There’s some really good work being done out there and so it’s great company to be in. I think one of the things that I really appreciate about ILSR is that we not only do the big picture analysis about concentrated power across all these different sectors, but we’re on the ground helping communities do something about it right now, building broadband municipally on broadband networks, taking control of their energy systems from the big utilities and rethinking how they want to have electricity produced in the future and what that’s going to look like that actually meets local needs. Helping the city of Tulsa figure out a way to keep dollar stores from continuing to proliferate. Those are the kinds of practical stuff that we do every day at the same time that we’re moving these bigger ideas and it’s a great organization. So, islr.org/donate.

And you know, I think the one other thing I wanna say is that individual donations are really important. We are supported by foundation grants and those are incredible, but individual donations do make up a significant share of our funding. They’re the funding that gives us some flexibility to do some of the most important work that we do and those individual donations, they come in amounts of 50 dollars and 500 dollars and they really matter. So, really appreciate everyone who’s listening, if you can think about us as we head into the end of the year.

Chris Mitchell: And I hope you find that to be somewhat useful in terms of the work that we’re doing, as well as a pitch for you to support our work. John, in the few minutes we have left, let’s do the abbreviated, super fast version of Utility 3.0. You’ve been working on this for several years. What’s changed and what do you expect maybe a little bit, in 2019, to be different in terms of how things have moved along as we transition from this monopoly command and control grid to one that’s more broken up and has more local control in it?
John Farrell: What I think it’s really exciting that’s happening in the energy sector, Chris, is really that this is sort of the year of self-reliance and it’s all about batteries. So if you’re holding a smartphone, maybe you’re listening to this podcast in a smartphone, if you have a laptop, batteries are everywhere, all of a sudden. They are becoming an integral part of our digital economy and all of a sudden, they’re entering the electricity business in a way that’s super exciting because now, instead of just being able to produce some energy from solar panels on my house, which has become incredibly popular, almost a million customers in California have solar on their own rooftops for example. Now I have a way I can store that energy when the sun isn’t shining or I can store it to use it at a different time or I can simply be resilient to when the grid goes down. And so, it’s really changing the game.

This is the year where there were huge increases in people installing solar behind the meter, which is to say they installed it with a solar array, they were using it to store energy at home. It’s also interestingly enough, a year in which a major US Midwest utility just announced that it’s going carbon free by 2050. And these things are happening at the same time and in some interesting ways and creating some interesting tensions.

Chris Mitchell: Right and one of the things I saw, is something that I think we predicted 15 years ago when we were in grad school maybe, maybe 12 years ago, I don’t remember, I’m getting old now I guess. But, there was this discussion then about the renewable energy standards or the renewable portfolio standards depending on what they were called at the time, but the idea that the major utilities would have to supply a certain amount of their electricity from renewable sources. And there was all these arguments, could it be met, was it too aggressive, would it destabilize the grid and it seems like all of the utilities are meeting them way ahead of time and they’re setting more aggressive goals now.
John Farrell: Absolutely. I think what’s fascinating is the argument, 10 years ago for example, was can we actually transition the fuel sources of our electricity system, can we actually rely increasingly on renewable energy and the answer is, absolutely. At this point, you have several states where at least a quarter of the electricity that’s generated on an annual basis is coming from wind or coming from solar. The question we have now that we’re really starting to wrestle with, now 2018 is, do we still need big utilities in order to meet those ambitious goals or can we do it in a decentralized manner? Can we make these decisions at a city level, at a household level, at a community level? Because we have solar, because we have energy storage. One super exciting thing that we looked at this year was, we did this time lapse graphic of all the solar that was installed in California, and as I said before, it was almost a million, individual people deciding to install solar on their home or their business, over the past decade. And it’s enough capacity to replace like three nuclear power plants in terms of instantaneous power delivery.

It’s huge, but the bigger thing, even the amount of power that’s generated by all those installations, is the fact that all of these people made that decision, not because they want to be a little power plant operators, but because it made financial sense for them. And that’s really the crux of what’s happening all of a sudden in the energy business is, you have all of these individual actors are wanting to act together individually or collectively, they can make decisions that impact our energy system, but that aren’t done through this traditional top down planning method and that don’t rely on the incumbent utility.

Chris Mitchell: John, one of the things that I’ve found in our work, is this sense coming out of Washington, DC and often state capitals, that you need to have one big entity. And even when we have successful small entities, the first question I get from people is, “Will is scale?” What you’re talking about here, these people who have made these decisions, that’s what’s changing things. It’s not convincing the utilities that they wanna go green, I mean I’m not gonna say that hasn’t had an impact, but fundamentally, what’s changing our utility system is all of the decisions that are made in a decentralized fashion. I see that in our broadband work, where the best networks in this nation are often built by municipalities or locally driven companies that have rooted in their communities. But I just feel like a lot of people, that obtain high power, they’re used to thinking this big way and they just cannot imagine change coming from lots of small actions.
John Farrell: It’s really funny too because for 100 years at least, we’ve known that mass producing things, turning things into commodities, allowing people to make individual decisions is what makes stuff available to everybody, whether it’s for cars with a Model T and Henry Ford or whether if it’s batteries and smartphones and computers and computer chips or transistors. I mean all of these things that move our economy forward in the digital age, can be mass produced, but they don’t have to be all controlled by the same person. They can be purchased and installed at small scale. If solar panels … I have solar panels on my roof now, at 27 panels. It’s the same technology that you would have in an enormous power plant that would be built by a utility company. And for the batteries, the battery that I could put in the wall in my home for battery storage or the battery the utility could put at their substation is all made up of the same little cells. Except it’s thousands and thousands and millions and millions of them.

And the real difference is that, because we don’t have to deploy that capitol in billion dollar chunks to accomplish good things in the energy sector, those decisions can be made by anybody. So you’re absolutely right, people have this notion like, “We can only make decisions if they’re big.” And especially in the energy sector, where we’re facing this climate crisis. People are like, “Well the only thing we can do is big things because this problem is so big.” Missing the fact that all of these little decisions often add up to faster reactions and more substantial steps towards solving the problem. And the perfect example of this is, in Minnesota right now, this utility company, this big utility it serves half the customers in the state, it said, “We’re going carbon free by 2050. We don’t totally know how we’re gonna do it, but we’re gonna do it.”

And the thing is, it’s a great commitment, I’m excited about it because it sort of helps set a standard in the public consciousness for what can happen. And yet at the same time, we’ve just installed hundreds of megawatts of solar in community solar arrays that are owned by third parties, that are subscribed to by tens of thousands of Minnesota residences and businesses and the utility had nothing to do with it. And so, people sort of miss that fact and unfortunately what’s gonna happen is that when the big player decides to make this commitment, they also have some big asks. They’re gonna be at the legislature this year saying, “Hey, in order to meet that goal that we set, we have these two big nuclear power plants, they’re getting kind of expensive to run. We’re gonna need to fix them up and we would like you to take the risk of fixing them up for us. It’s probably gonna be billions of dollars.”

And the worry that I have is because they made a big commitment that people see as important and because they’re a big player, we’re gonna give them a big handout instead of thinking about, how could we spend … Best spend, for example, five billion dollars on clean energy? Is it really to give a handout to the big guy or would we be better off investing it into all of the ways that small individuals or cities could make investments in clean energy?

Stacy Mitchell: So that’s the work for 2019?
John Farrell: It sure is
Chris Mitchell: The deep irony of course is that the climate crisis is a pollution problem that comes from billions of non-point source pollution. I mean it’s literally one of the biggest problems we have to deal with and it doesn’t come from a single source. So I think people just, they don’t understand the power. They don’t think about it in those terms.
John Farrell: No. Although ironically, the folks most responsible for it and who own most of the pollution are the very largest publicly traded companies that have invested deeply in fossil fuel infrastructure. Which is why even as this Midwest utility is making carbon free promises, they’re out there asking to buy a new natural gas power plant. Or they’re saying as part of this deal, “Well, we don’t wanna have to close any power plants early.” And so, the question is, okay, so if you’re gonna have to make these carbon commitments, are you essentially saying that we have to buy you off? Because in a market economy, in a capitalist economy, we often let the better solutions out compete the other ones. And so my question is always, let’s give this playing field a try, let’s see how else that we can solve these problems that doesn’t involve having to buy off the big player just because they’re big.
Chris Mitchell: So, we’re gonna wrap up there, I think. We were gonna talk a little bit about a broadband topic, but let me encourage you instead to check out the broadband bits podcast that we did with our year end review because you’ll be able to hear Lisa Gonzalez, Katie Kienbaum and Jess Del Fiaco. Two voices who are new to our podcast talking about some of the things we saw over the course of a year and then, maybe people will have better sense of all the work that comes from the teams at ILSR rather than just those of us that happen to be at the head of them. So as we wrap up, we have a couple, maybe, closing comments, but we wanna wish everyone a Happy New Year and Happy Holidays, Merry Christmas, all that stuff. Hanukkah’s already passed, so we’re gonna leave that one out, I guess.
John Farrell: What’s your New Year’s resolution?
Chris Mitchell: I wanna be more daring. I think there’s a lot of potential. I think I played it too safe in 2018. I think there’s … People need to get out there and be a little bit more bold and recognize that there’s a massive hunger for better solutions. We have those and we need to find more ways of getting them out there. So I wanna try and be more bold in 2019.
Stacy Mitchell: That’s great.
Chris Mitchell: Thank you all. We’ll be back in 2019. There’s gonna be a lot of great stuff to talk about. There’s new research coming out, so please come back.
Stacy Mitchell: Thanks to everyone who’s listened.

Thank you for tuning into this episode of, Building Local Power. You can find links to what we discussed today by going to our website, ilsr.org. That’s ilsr.org. While you’re there, please consider supporting our work with a donation. And if you enjoy this podcast, please consider sharing it with your friends. This show is produced by, Lisa Gonzalez, Zach Freed and Hibba Meraay. Our theme music is, Funk Interlude by, Dysfunctional. For the Institute for Local Self Reliance, I’m Stacy Mitchell, joined today by John Farrell and Chris Mitchell. I hope you’ll join us again in two weeks with the next episode of Building Local Power.

 

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Audio Credit: Funk Interlude by Dysfunction_AL Ft: Fourstones – Scomber (Bonus Track). Copyright 2016 Licensed under a Creative Commons Attribution Noncommercial (3.0) license.

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Hibba Meraay
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Hibba Meraay

Hibba Meraay manages communications for the Institute for Local Self-Reliance. She works closely with all of our initiatives to build community power and combat monopolies. A native New Englander, Hibba is a graduate of Boston University. Contact Hibba for media inquiries.