200 Episodes, 10 Lessons, and Your Questions — Episode 200 of Local Energy Rules

John Farrell:

Today we’re celebrating the 200th episode of Local Energy Rules, a podcast journey covering 10 years and everything from cooperative wind projects to antitrust law to inclusive utility financing. Instead of our usual format, I’m taking a moment to reflect. So here’s what’s in store if you keep listening. First, the backstory of Local Energy Rules, why and how we started the podcast and what I’ve learned about podcasting. Hot tip, get a good microphone. Second, which guests have come back multiple times because they kept impressing us with their work on energy democracy, and which celebrity tweeted out about a Local Energy Rules podcast about Puerto Rico. Third, I’ll talk about my favorite episodes because they taught me something new and how my guests have convinced me to evolve the podcast to talk more about monopoly power. And finally, I’ve got a few podcast recommendations of my own and some answers to your questions. I’m John Farrell, director of the Energy Democracy Initiative at the Institute for Local Self-Reliance, and this is Local Energy Rules, a podcast about monopoly power, energy democracy, and how communities can take charge to transform the energy system.

John Farrell:

So let’s start with the start of the Local Energy Rules podcast. I just have to start with a shout out to an intern that I had a decade ago, Wade Underwood, who was willing to help me figure out how to record and publish a podcast, something that I had never tried before, but also to my colleague Christopher Mitchell, who directs the community broadband program at the Institute for Local Self-Reliance, who pioneered podcasting for our organization about six months before I decided to dive in. His Community Broadband Bits podcast has over 500 episodes and he’s also gone into a bunch of other things as well. He’s got several other podcasts and even a video show called Connect This on YouTube. I definitely recommend checking out if you have any interest whatsoever in the issues of broadband access. Chris is a great host and has covered hundreds and hundreds of places and programs and policies that help communities get access to affordable broadband.

John Farrell:

So when we got started with this podcast, we started with the same kind of thing that we do a lot of time on this podcast on Local Energy Rules, which is highlighting local successes. In fact, the first podcast episode was with Anya Schoolman, who was then helping to organize what was called the Mount Pleasant Solar Cooperative in Washington D.C. aided by one of her teenage sons and his friend who were helping go around and talk to neighbors in the Washington D.C. neighborhood that they lived in and trying to get them to go solar together as a way of overcoming some of the informational hurdles to figuring out how does solar work, how would it work for me? As well as to get more competitive bids from solar installers. Their cooperative was successful, but also launched an entire organization, Solar United Neighbors. I’m privileged to sit on the board of that organization, but it’s now a national organization with chapters in more than a dozen states helping people to go solar and providing nonpartisan, unbiased information for homeowners about what it’s like and what’s involved in going solar yourself.

John Farrell:

And that theme of highlighting local successes, even if not all of them have grown in quite the same way that Solar United Neighbors has out of that Mount Pleasant Solar Cooperative, included a lot of other local success stories including about community solar, two different community wind projects, and a public power campaign you may have heard of in Boulder, Colorado. Those first 10 episodes have led to some similar themes that we’ve had over the years in the Local Energy Rules podcast. A big one has been about city leverage. We’ve talked about community choice energy, about franchise fees, about local climate funding. In fact, we had an entire series for over a year called the Voices of 100%. That was specifically about talking with leaders from cities, sometimes it was mayors, sometimes it was sustainability officers, sometimes it was advocates in the community about their efforts to get their city to a hundred percent renewable electricity. That series still holds up as a good story of the challenges that face a lot of communities in trying to reach those ambitious goals, especially if they don’t own their own utility.

John Farrell:

Speaking of that, we’ve also talked a lot on this podcast about public power. We did an entire series in the fall of 2022, a six part series. It was our most ambitious podcast project yet because we actually recorded all of the interviews, almost a dozen, before we published any of the six episodes, and we tried to knit them together in more of a story form to help people understand the full implications of public power. So we talked about why communities wanted public power, how they went about trying to get it, why it was so difficult to accomplish creating a public power utility when you already had an incumbent for-profit utility, why there might be some reasons you might not want public power or some of the drawbacks that we’ve seen in existing public power institutions and also what are some alternatives to public power if communities are looking for ways to have more control over their electricity and energy future but aren’t up for the fight of trying to establish a public power utility.

John Farrell:

So in addition to city leverage and public power, we’ve talked about a lot of community renewable energy projects, probably over two dozen community wind and community solar projects and about the challenges that they had to overcome in order to be successful. I like to think that a lot of these stories are what helped lead to many of the community solar policies we see across the country now in over 16 states helping to smooth out and to remove some of those barriers to make community energy and community energy ownership more possible. We’ve talked about electric vehicles with the City of Austin’s utility, with Tony Seba, with Boulder County, with New Hampshire Electric Cooperative, all about how we can build out an environment from the charging infrastructure to understanding the technology to the incentives that can be provided locally and to the ways that electric vehicles can better integrate into our electricity system as an asset and not just as something that consumes electricity.

John Farrell:

We’ve talked a lot about great cooperatives, Farmers Electric in Iowa, Kit Carson in New Mexico, Kauai Island in Hawaii, Delta Montrose in Colorado, New Hampshire Electric, Midwest Energy and Holy Cross Energy in Colorado. All of these cooperatives have lived up to their ideal of flexible democratic and accountable to their members more than almost any others that we’ve seen. And there’s probably a lot that I’m missing cooperatives that are out there doing great work that will have on future podcast episodes, but these are the cooperatives that help demonstrate how the rural electric cooperative model and the cooperative ownership model can really do a lot for its members and a lot around clean energy. And we’ve seen some of the earliest solar programs in the country at Farmers Electric had more solar watts per capita than any utility other than those in Hawai’i. we had Kauai Island on talking about how they’ve gotten to over 70% renewable energy on their grid. Kit Carson and Delta Montrose talked about breaking away from their generation and transmission cooperative and restoring more of that local self-determination that cooperatives have so often wanted. New Hampshire Electric came on to talk about their vehicle to grid or transactive energy rate that’s going to allow their customers to sell power back to the utility. And Midwest Energy was on to talk about inclusive utility financing and ways that utilities can help treat energy efficiency improvements on customer property as a utility asset, as something that they can invest into lower bills for everybody.

John Farrell:

And we’ve also had great cooperatives that aren’t rural electric cooperatives like the People Power Solar Co-op, Co-op Power, and Cooperative Energy Futures, come on and talk about benefits of cooperative ownership. You’ve probably also heard about that in the report that we’ve published called Advantage Local, where we go in chapter and verse on all the social and economic and environmental benefits of cooperative ownership of clean energy and these folks came on and talk about it and give us specific case studies of why it is that clean energy ownership is so important.

John Farrell:

So we’ve had a lot of great themes over the years. I’ll focus on cities, on community energy, electric vehicles and cooperatives, in addition to having these wonderful themes and a lot of learning that I’ve done, and I’ll talk a little bit more later about some of the podcasts that have really taught me the most about the work that I do around energy democracy. I’ve also learned a lot about podcasting. I’ve learned how important it is to have a good audio set up. In fact, the first dozen or so episodes unfortunately were recorded with what I like to call the Blue Snowball. In fact, if you Google that, you’ll actually get a picture of what this microphone looks like. Is not a bad microphone, it’s an external microphone. It connects by USB to your computer, but it really isn’t very high quality. Picked up a lot of background noise for example, and you can tell in the difference between this episode for example, recorded on a much higher quality mic, and from this first dozen episodes how much of a difference that made.

John Farrell:

I also had to learn a whole bunch about the software necessary to set up and record. If you use a Mac as a computer, Audio Hijack Pro, I cannot say enough about how great it is because it doesn’t matter what platform you use to connect to your guests, Zoom or Skype or some other method of making that connection. Audio Hijack Pro can grab the audio for you and even do it in different channels to make it easier to edit. Another thing that we’ve learned that is really important, especially because every once in a while either my guest or myself have some audio problems and if I have audio problems, I can just rerecord the questions that I was asking the guest after the fact without having to have them come back on and record all over again. And speaking of that, always I’ve learned how important it’s to ask for backups.

John Farrell:

My apologies still to Mary Leslie of the Los Angeles Business Council who did a wonderful interview with me in the early years, probably in like 2015 about feed in tariffs. We lost that entire episode because either I forgot to hit record or my recording software wasn’t working and I hadn’t asked her to record a backup. So now I do as a matter of course. We’ve never had to use the backup, but we do go through that effort of making sure that we have one.

Alright, we’ve covered a lot of things so far about how this podcast got started and what we’ve been talking about in terms of our themes, what I’ve learned about podcasting. I want to just do a shout out really quick to some of the repeats. Some folks or some entities that have been represented multiple times on this podcast.

John Farrell:

The Kauai Island Electric Cooperative. I spoke with someone on their board years ago about their ambitious goals in terms of renewable energy and then spoke with their CEO David Bissell about how far they had come. They were at over two thirds renewable energy at the time and he came out at an interesting moment when they had actually had some struggles because of some outages from their fossil fuel generation coinciding with some very cloudy days, and he talked about why it wasn’t the fault of any one particular technology and how they had had to learn how to manage that. I still recommend that episode almost more than anything to folks who are skeptics about how much renewable energy we can get. Kauai Island, as you can suspect from the name, an island, they have the harder job of just about anybody at getting to a high level of renewable energy because they’re not connected to anyone else who can back them up.

John Farrell:

Another repeat that we’ve talked about a lot on this podcast is Boulder, Colorado. I talked to their mayor back in 2009 when they were first considering the issues of municipalization, to Steven Fendberg, who was an organizer with New Era Colorado, and most recently came on as a state senator to talk about his utility accountability work. But I’ve talked to him about Boulder. I’ve talked to city staff about their 10 year journey for public power that ended without forming a public power utility and in fact informed a lot of our public power podcast series about what you can still get from a public power campaign even if you don’t end with public power. And another person that’s been on multiple times is Mariel Nanasi from New Energy Economy, New Mexico. It would be most appropriate to just call her a force of nature. She has worked on everything from municipalization in the city of Santa Fe to a hundred percent clean energy legislation ensuring that it is equitable and consumer focused to community renewable energy and community solar, which she’s been working on the most recently.

John Farrell:

I also want shout out to Jean Su who came on, she’s now actually a of ILSR’s board, but she is the interim executive director at the Center for Biological Diversity and a great ally of ILSR in our work to understand monopoly power of utilities. One thing that was really fun about doing the podcast a couple of years ago was that I did several episodes around Puerto Rico. I was invited to speak on the island about distributed energy at a conference shortly after Hurricane Maria and it inspired me to talk to some other folks on the island to learn more about what they were doing and how they were organizing to make their grid more resilient and more democratic and more in service of the needs of the average Puerto Rican resident.

One of those episodes in September 21, with Ingrid Vila from Cambio, a network of and coalition of organizations that’s been working on advancing a grid that prioritizes local and community solar, actually caught the attention of Mark Ruffalo, the actor who retweeted that in September, 2021. Still tickled to think that there was something that he saw of ours that he thought was interesting enough to share, but I definitely recommend that episode if you want a chance to understand what Puerto Ricans are up against in terms of trying to be successful in their efforts to bring clean energy to the island, from the colonial history to the recent struggles with their public utility being insolvent, and then the challenges of dealing with their relationship with the federal government in being able to have some sense of self-determination. So Ingrid Vila, that episode is number 138 and I highly recommend it.

John Farrell:

One of the most amazing things about doing podcasting is realizing how much you have to learn from your guests. I often get ideas for episodes because I’ve heard something about an interesting project going on or I’ve built a relationship with somebody working on a clean energy policy idea or because they’ve reached out and are interested in learning something from me. And I just cannot emphasize enough how much I’ve learned from all of my podcast guests over the years.

So this is going to be a little bit of a list, but I’ve tried to organize it around different topics where I think my guests have provided an enormous amount of information to me and help me do my job better in terms of advancing the goals of energy democracy. So I have a few different categories I’m going to run through here. One is around community-based renewable energy. Second one is around cooperatives. The third is a category around public power in cities. The fourth is about a hundred percent clean energy policies and state policy. The fifth is around utility behavior. The sixth is around utility market power and monopoly abuses. The seventh is around Puerto Rico as I already mentioned. Then I’ve got a couple special buckets that were single episodes but around topics that I don’t generally understand a lot about or didn’t before then and felt like I learned an enormous amount.

John Farrell:

So let’s start with community renewable energy. There were two episodes in particular that I picked out that I felt like were really instructive in my understanding of how community renewable energy worked. The first was actually one of my first episodes, episode seven with Brian Minish. He represented the South Dakota Wind Partners, a community wind project that was developed in the early 2010s on the heels of the American Recovery Act enacted under President Obama and in the wake of the great recession and the economic collapse due to the housing market. One of the key reasons why the South Dakota Wind Partners and other community wind projects were able to be successful in that timeframe was because in the wake of the economic collapse, the tax credits that the federal government had been providing for clean energy weren’t able to be used because typically what would happen is a clean energy project would sell those tax credits to another investor and when you wanted to have a community-based project, the problem was that in order to offset your income with these tax credits, you would need what was called passive income.

John Farrell:

I’m not going to get into the weeds. I can recommend that you go listen to episode seven if you want to understand more about it or just search the term passive income on ILSR’S website and you can probably find some of our old research on it, but it really helped me understand what the barriers were around having a group of investors do a community renewable energy project. The way that federal tax law impacted that, not just in the design of tax credits, something that’s been addressed under the Inflation Reduction Act with direct pay, but also the issue of passive income. That episode was really, really helpful for me in being able to write the Beyond Sharing report back in 2016 about the challenges of community renewable energy as well as exciting about the few times that folks were able to overcome that.

John Farrell:

There was another episode called Green Energy Farmers. I don’t remember the exact episode number, but that also talked about a community wind project in Iowa that was similarly able to be successful due to that particular timeframe in which there was a cash grant instead of a tax credit that enabled community wind projects. The second episode that I really wanted to uplift in terms of my learning about community renewable energy was episode 175 a little more recently with Dan Juhl, a long time community and local wind and solar developer in Minnesota. The title of the episode is Who Needs Transmission Wires Anyway, and it really highlights the fact that we undervalue the ability of some of our small scale projects, and in this case small scale meaning about five megawatts enough to serve maybe a thousand homes. Dan was developing projects that were solar wind hybrids, so together they would have a very high capacity factor, which means that they would be able to provide electricity at a very high rate 24/7.

John Farrell:

And these projects can be located on the low voltage part of our electricity system on the low voltage side of substations, really serving local needs and in places where you don’t need to upgrade transmission capacity in order to build them. I think that’s very important of course right now at a time when we’re talking about lots of constraints on the transmission system in order to build the clean energy that we need to fight climate change and to capture all the economic benefits for our electricity system.

A second category where I’ve learned an enormous amount from my guests is around cooperatives. It goes all the way back to episode 12 when I had Warren McKenna on, he was the general manager at Farmer’s Electric Cooperative in Iowa. As I mentioned before, their feed-in tariff program led them to have more solar watts per capita than just about any other utility in the country back in the early 2010s, even more than utilities and cities in California.

John Farrell:

It was a really impressive story about how a cooperative could just say, you know what? I think this is something we want to do, and they could figure out a way to use their local authority to meet that member interest in doing solar and do so in a way that was affordable for them as well. I also have to call out episode 92 with David Bissell. I mentioned to him before he was the CEO and is the CEO of the Kauai Island Electric Cooperative, and they’re really proving that clean energy can work at really high rates out on Kauai Island. Over 70% of the electricity they generate comes from solar. They can’t do wind power because of issues with migratory birds, which is a real shame for them because they have trade winds that comes through Hawaii that would be very useful for them to tap.

John Farrell:

So they’ve had to be very creative in figuring out how to make it work. And they have, in a way, I think that provides lessons for utilities everywhere because Kauai Island is more isolated than most utilities in its ability to get to clean energy future. And the final one that I want to call out, although there are probably more honestly that have taught me a lot, was episode 182 with Brian Callnan and it’s about the fact that this idea of vehicle to grid is really ready, that the technology is there. The New Hampshire Electric Cooperative is starting to offer this new transactive rate to allow customers to sell power back to the utility if they have a vehicle that can be programmed to do so, and there are cars out there already, like the Nissan Leaf can do that. And so it taught me again that here’s cooperatives on the cutting edge of how technology can work, ready to find a way to allow their customers to help them manage the grid more effectively is very exciting.

John Farrell:

A third category where I’ve learned an enormous amount from my guests is around public power in cities. This goes all the way back to episode 15 with Ken Regelson from Boulder, Colorado, and we talked at that time about a report that had been recently released saying that the city could, by taking over its electricity system, meet its clean energy goals faster and at a lower cost than the incumbent utility could provide the electricity. And so it was one of my first lessons about the power of the switch to public ownership and that promise that is available for so many cities that if they do invest in public power, it can help them meet their climate goals, their economic goals, and do so in a way that will cost consumers less for electricity. It was a very powerful story and one reason that I kept tuned into what Boulder Colorado was doing for so many years.

Episode 87 with Kate Harrison, a city council member from Berkeley, California, taught me how cities could fight the gas company as they were one of the first cities in the country to say that there would be no more new gas hookups for properties in the city as a way to signal that it was time to move to electricity, a cleaner source for heating and cooling homes, for cooking, for water heating, for all the other services.

John Farrell:

It was also a really important lesson for how states could step in and preempt this practice. Our community power map shows that something like 15 to 20 states now have preempted cities from making this similar kind of policy decision. Many of them without ever having a city in their state take this action. But having just seen what Berkeley did and being informed by ALEC or one of the other conservative networks of policymaking stepped out in front and tried to prevent their cities from making those choices for their citizens.

I also then want to call out episodes 119 to 120 where I spoke with leaders from Portland, Oregon and Seattle, Washington about how cities can make big investments in their climate future. Both cities were very interested in dramatically increasing the amount of money that they were able to invest in community-based solutions to the climate crisis in a way that was more equitable and addressed historic harms, especially to communities of color to low-income communities. And they did so and they did so in innovative ways that made sure that the burden of paying those taxes fell on folks who could afford it, either high income earners from tech companies or very large retailers who had sales over a billion dollars a year. I definitely recommend listening to those episodes. It’s also a lesson in preemption as I believe Oregon State government promptly preempted any other city from following Portland and providing a similar kind of funding mechanism.

John Farrell:

The last thing in public power dimension of course, is just our public power podcast series. It’s six episodes starting with episode number 163, and for anybody who wants to learn the basics about public power, why people do it, how to do it, who some important contact folks are, I definitely recommend them.

One other category that we’ve learned a lot about is about a hundred percent clean energy policy at the state level.

John Farrell:

So we’ve got episodes 90 and 92, about two very different places that are getting close to a hundred percent renewable electricity, Kauai Island, Hawaii and Burlington, Vermont. Burlington, Vermont actually already gets a hundred percent of its electricity from renewable sources. The municipal utility there accomplished that goal several years ago, so we spoke about how they were pivoting to thinking about other sources of energy including working around electric vehicles or electrifying home heating and cooling. In episode 72, I talked with Mariel Nanasi about how big state climate policy can unfortunately cave to the utility and give up a huge amount of the benefits, or alternatively it can be written to support energy democracy. And she talks about the Energy Transition Act in New Mexico and the fight there to make sure that communities would actually benefit from the transition to clean energy.

John Farrell:

Speaking of making sure state policies are good and equitable in terms of their both process and their outcomes, in episode 185, I spoke with Haley Havens from the Initiative for Energy Justice and she spoke about the big equity gaps in some of the early a hundred percent clean energy policies and about what needs to be done to make sure that subsequent policies do a better job.

An inspiration for me frankly, in understanding that importance of good process was Leah Bamberger, sustainability director in Providence, Rhode Island where she talked about the city’s not climate action plan, but climate justice plan and how they made a really concerted effort to include members of the community in the process of developing the plan. And it made significant differences in the focus on greenhouse gas emissions. Instead of thinking broadly just about carbon and carbon dioxide, they were talking about the kinds of overlaps between things like criteria pollutants and particulate matter near the city’s port and how the communities that lived there were much more focused on getting the pollution away from their homes away from their children in a way that would protect their health and in a way that would protect the climate. So it allowed the city to focus on both those things at the same time.

John Farrell:

And the last thing I just want to point out, and this is so important because ILSR does so much work talking about good policy is that in episode 153 I spoke with Crystal Huang and the recently deceased Al Weinrub, rest in peace Al, about how implementation of policy matters a lot too. They came on to talk about how ILSR’s Community Power Scorecard is giving California and around community renewable energy really was shortsighted in the sense that it didn’t feel like an A on the ground when it was so difficult to actually develop community-based and community owned renewable energy projects. In other words, implementation matters and it’s something that we take very seriously in thinking about how we talk about that project from now on and in making sure when we talk to other folks about good policy that we talk about the importance of making sure that it gets implemented well as well.

We’re going to take a short break when we come back, I share the episodes that have taught me the most about utility behavior and monopoly power, Puerto Rico energy efficiency programs, and even building electrification. I talked briefly about how Local Energy Rules has evolved, share a few podcasts that I recommend, and then answer some of your questions. You’re listening to the 200th episode of the Local Energy Rules Podcast with me, John Farrell, director of the Energy Democracy Initiative at the Institute for Local Self-Reliance.

John Farrell:

Hey, thanks for listening to Local Energy Rules. If you’ve made it this far, you’re obviously a fan and we could use your help for just two minutes. As you’ve probably noticed, we don’t have any corporate sponsors or ads for any of our podcasts. The reason is that our mission at ILSR is to reinvigorate democracy by decentralizing economic power. Instead, we rely on you, our listeners. Your donations not only underwrite this podcast, but also help us produce all of the research and resources that we make available on our website and all of the technical assistance we provide to grassroots organizations. Every year ILSR’s small staff helps hundreds of communities challenge monopoly power directly and rebuild their local economies. So please take a minute and go to ilsr.org and click on the donate button. And if making a donation isn’t something you can do, please consider helping us in other ways. You can help other folks find this podcast by telling them about it, or by giving it a review on iTunes, Stitcher, or wherever you get your podcasts. The more ratings from listeners like you, the more folks can find this podcast and ILSR’s other podcasts, Community Broadband Bits and Building Local Power. Thanks again for listening. Now, back to the program.

John Farrell:

Another really interesting episode was episode 38 with Mary Powell. She’s now the CEO of Sunrun, but at the time was the CEO of Green Mountain Power. It’s the only investor-owned utility in the United States that is also a benefit corporation and she was instructive in talking about how even an investor-owned utility can embrace distributed energy if they want to change their culture and if they’re willing to look at ways that they can make money from doing that instead of the utility scale and investor focused model. There are still great stories coming out of Vermont how Green Mountain Power is one of the first utilities to start leasing batteries to its customers, using them to support the grid, but also allowing them to be useful to their customers in providing backup power. And it’s something that they’ve really doubled down on. Now is everything Green Mountain Power does great? Probably not, but it was really instructive to talk to Mary Powell at the time she was there about how not every investor owned utility has to resist this transition to distributed renewable energy as they so often do, warned by their trader organization, Edison Electric Institute.

John Farrell:

There’s probably no topic that has been more important and instructive to me in the evolution of my work at the Institute and in the work that we’re doing now than the guests who came on to talk about utility market power and monopoly abuses. It was probably kicked off around episode 69 when I had Bill Schnell on. He was from Grand Rapids, Minnesota and talking about the David versus Goliath fight that every community faces if they want to do something that their electric utility does not want to do. It was particularly interesting because Grand Rapids owns its own utility. It has a city owned distribution utility, but in this case it was the bigger utility, the for-profit utility that sold the electricity to the city of Grand Rapids that objected when their city wanted to do a community solar project with battery storage and they were facing down how the utility was resisting and in fact, using their lawyers and their litigation power to sort of beat down the city’s efforts to do community renewable energy. I think they eventually reached a compromise, but it was a really important lesson about how even when you own the local utility, you may be beholden to a larger utility under some contract to buy power, something that’s also been true of cooperatives. And it really highlighted the importance of not only having that local control but having some flexibility around your decision-making.

John Farrell:

Another episode that was a big point of learning for me about market power and monopoly was episode 109 with Scott Hempling about how utilities are unfairly profiting from their public franchise when they merge. So Scott has written an amazing book, which I highly recommend, that assesses the situation with utility mergers over the past couple of decades and how so many investor owned utilities have merged together to become these big multi-state or even multinational conglomerates. And what he points out is that the real value in these merging entities, the real value that they’re trading on in the merger is the fact that they have this publicly granted monopoly and that without, without those guarantee of those customers, these mergers and these businesses really don’t have much value, but they’re essentially trading on that public value for private profit.

John Farrell:

Another episode that was really instructional for me was episode 126 with Cisco from OhmConnect talking about the large and equitable potential of virtual power plants. The work that OhmConnect does, aggregating customers together, reducing their bills and then reducing bills for all electric customers by providing services like demand response and energy efficiency. And he also talked about how market barriers lock out this kind of business in most states. In fact, there’s only two states, California and Texas, where they’re currently able to do business and based on FERC’s order to the states, the Federal Energy Regulatory Commission, it might be until 2030 until we see those markets develop in other places.

Another episode again, really important. Episode 135 with Yochi Zakai was about why you need to know about this idea called hosting capacity if you care about getting lots of local solar, it’s an analysis that’s required of utilities and I think seven or eight states now that where they have to map out on their distribution system where it’s easiest to connect more local solar to the grid where they have capacity and it’s really essential, especially as we start seeing markets get more mature for local clean energy.

John Farrell:

Shout out for episode 149 with Ari Pescoe on the monopoly link between transmission and net metering. Before that episode, I don’t think I’d ever really realized how much utilities exercise monopoly power in a way that inhibits clean energy at the utility scale, not just fighting rooftop solar. And what he has uncovered in his research, he has two amazing papers that he’s written on what he calls the utility transmission syndicate is that utilities exercise market power and political power over the transmission planning process in a way that it’s curtailing our ability to do clean energy because they prioritize owning the transmission lines over building ones for regional interconnection that would support more wind and solar development.

I have to celebrate Jean Su who’s been on the podcast twice from the Center for Biological Diversity, episode 136 and episode 152. She opened my eyes to the idea that federal antitrust policy could potentially be brought to bear on utilities for acting in anti-competitive ways.

John Farrell:

In episode 155, I talked to Michael Murray from Mission Data and he taught me about the danger that we have in letting utilities control all the data about the electricity system and how hard it is for customers to even to get access to their own data, much less being able to share that with a third party that might be able to offer them some services to reduce their energy bill and even reduce their energy bill in ways that benefits the entire electric grid.

A couple more things that I’ve learned about market power and monopoly power, A couple more episodes, episode 177 with David Gahl and Justin Baca. We talked about the lack of data that most state utility commissions have around interconnection costs and timelines of the utilities that oversee this really key process in the markets for distributed energy. They wrote a letter to the Energy Information Administration at the federal level requesting that they collect this data on their annual surveys of distribution utilities. They declined to do so for now, but there’s still hope that they will in the near future and it would be essential to give utility regulators the ability to properly oversee the interconnection markets in each state and how their utilities are handling the really important and crucial aspect of allowing distributed projects to connect to the grid.

John Farrell:

And speaking of that, episode 188 with Mari Hernandez from the Interstate Renewable Energy Council about their freeing the grid report is all about interconnection and about this crucial step, whereas David and Justin talked about the information that we have about it, Mari and IREC talk about the rules. How do we set good rules to make sure that there is fair and non-discriminatory access to the energy system for people to be able to connect their clean energy projects?

John Farrell:

Just a few more episodes I want to share about where I learned so much. Episode 77, 78 and 138 were about Puerto Rico and I spoke with Marcel Castro Sitiriche and Ingrid Vila and learned about how a colonial past still haunts this American Island grid and how local solar and storage could be the answer. Puerto Rico has just suffered over and over and over again throughout its history because of its unique status of having American citizens in a territory that don’t have federal representation. They still pay taxes and they don’t get all the benefits and there are so many reasons they are continuing to suffer from trying to recover from Hurricane Maria many years ago.

The last two episodes are just shout outs for things that were a little bit of a tangent, but also I thought really enlightening information about how the energy system works. Episode 122 is with Marti Frank, who’s a program evaluator for energy efficiency programs, and she talked about how we do completely go about backwards doing incentives for energy efficient appliances that instead of doing rebates that people get after the fact, we need to lower the price of the things that are the most energy efficient at the point of sale because half of Americans simply buy the cheapest refrigerator or washer or dryer that’s on the floor at the store at the time because they can’t afford anything more, and that cheapest appliance had better be the energy efficient one.

John Farrell:

The last thing is episode 178 about building electrification is a great conversation with Nate Adams and Steve Pantano. Nate is with HVAC 2.0, Steve is with Rewiring America, and it was generated by a debate on Twitter between the two of them about the costs of electrification. And we really got into the weeds about what is it that needs to happen to change – how do we change the issue with contractors being that point of contact with customers and many of them having the wrong idea about how electrification works? What do we do to make sure customers have the right ideas about how much it’s going to cost and what their expectations should be? It was a fascinating conversation.

I’ll just sum up to say that I have learned so much from doing this podcast and it’s one of the pleasures of doing it is that bringing on guests to talk about these issues has really been educational for me and I hope for you as a listener.

John Farrell:

One of the things that I wanted to share about the podcast and its evolution and why so many of these recent episodes that I was just talking about are about market power and monopoly abuses is that I realized after some of our early episodes that too many of the amazing community clean energy stories were one-offs, South Dakota Wind Partners, University Park Solar, Monadnock Food Co-op. There’d be this one really great story of like, oh, this community came together and was able to collectively own these wind turbines, this community or these solar panels, but it was hard to replicate and the circumstances of their success were often like, oh, there was this one grant or there was this limited time federal incentive, or oh, we had free legal support because two of the people who were part of the project team were attorneys in their day jobs and were able to give us pro bono assistance in terms of developing the projects.

John Farrell:

And it became clear and clearer that there are systematic and systemic barriers to these community and local energy projects. And that became the priority for our work is investigating how do we identify those barriers and how do we overcome them. I want to wrap up with just two things. One is a shout out to some other podcasts that I like and have learned a lot from. And then the last thing is I sent out an Ask Me Anything to our email list on social media to see if people had any questions just in general that I could answer. And I’m going to take a stab at the mailbag here and see if I can in fact answer these, ask me anything or not. So first though, the podcast that I’ve really enjoyed listening to that I highly recommend, there are links on the show page.

John Farrell:

So first though, the podcast that I’ve really enjoyed listening to that I highly recommend, there are links on the show page. There’s the Just Solutions podcast with Aiko Schaefer that really drills down into what are the clean energy policies and practices that are getting equitable outcomes. There’s the Energy Transition show, which is one of the deepest and most informative dives with Chris Nelder. The Energy Markets podcast with Brian Lee. I was just on in the past few months, does an amazing job of asking this question of how do we quarantine the monopoly, how do we make sure there is room for competition and access to the system? And then finally, Volts with David Roberts. I followed David’s writing since back at his days at Grist, then at Vox and in all of his evolutions. And I just think his cogent analysis not only of clean energy where he does such a great job of bringing on guests to explain how the system works, but his analysis of the political economy and how people make decisions and the politics of clean energy. I think his statement that where you elect Democrats climate policy follows has been really instructive for understanding how decisions are often made as well as the deep insights that I’ve gained around things like network, geothermal or distributed solar or energy storage or even transmission.

A shout out to all of those podcasts, Just Solutions, the Energy Transition Show, Energy Markets Podcast and Volts. I highly recommend both following them and subscribing to them to the degree that you are able to do so.

John Farrell:

And with that, I’m going to wrap up with this Ask me anything mailbag and then talk maybe a little bit about what’s upcoming for the podcast over the next year. But just want to thank you so much for being a listener of Local Energy Rules. We really can’t say enough how flattered I am that when I meet people for the first time and they say, oh my gosh, I recognize your voice, what a treat it is, but also particularly because they’ll say, I learned so much from your podcast. And that is definitely part of what we are hoping for is this opportunity to share what I have learned over 17 years in doing this work.

John Farrell:

So let’s go to the mailbag and see what people are curious about when I offered them to ask me anything. Question number one from Leatra Harper, how do we stop the big utility lobbyists and interests from penalizing distributed generation? I think this starts at the level of organizing. You need to organize. You need to educate people about how the energy system works and why this matters and what incentives the utilities have. And then you have to strategize and figure out a way that you can oppose that problem. So Leatra is involved in a lawsuit against Bowling Green Ohio utilities for their changes to policy to fight distributed generation. You can look for legislation, you can advocate at a public utilities commission.

John Farrell:

There are lots of places where you can take those arguments and try to figure out how to change them, and it really depends on your community and where you think you have power and leverage in terms of what might work the best. So I wish I could give a general answer of how do we stop them, but broadly the solution is going to be how do we get utility incentives to align with distributed generation and how do we get them out of the way? And this is part of research that I’ll be publishing soon on investor-owned monopoly utilities, but I think this is twofold. One is removing the control that the utility has over the distribution system so it can’t impose and block its competitors. And the second one is how do we make it in their financial interest to support distributed generation, for example, by taking care of upgrades to the distribution system to make sure that everyone has access.

John Farrell:

Question two is from Albert Lin. Albert, great to hear from you. Love the work of you and others on utility return on equity, which is what your question is about. How do we get advocates and interveners at public utilities commissions to pay attention to how high the return on equity is that is being awarded to utilities by state commissions and how it creates a huge incentive to stay the course in terms of investing in large fixed assets like giant power plants and transmission lines? Number one, I’d say I’ve got a new report coming out here very soon on monopoly utility monopoly power, and it does address this and in fact references some of the work that Albert you first shared with me about this problem. The second thing I just want to highlight is you can fight back. There’s a great example in Minnesota recently with a rate case involving Xcel Energy where advocates successfully argued that the utilities rate of return needed to be reduced by a percentage point in order to better account for the actual risk and reward calculus that there is for making investments in large infrastructure when you’re a monopoly and can recover those costs from captive customers. It’s not enough and in fact, the evidence suggests that anywhere from two to $20 billion a year is over-billed to utility customers across the country because we overpay utilities for their capital and yet it is a fight that we need to have.

John Farrell:

Question three here is from Doug Jones in Minneapolis where he asked, does it make sense to have a mechanism to add solar panels to an existing solar installation when your energy needs increase, such as if you buy an EV or maybe get a heat pump? And I would say, yeah, of course it makes a lot of sense to do that. The policy unfortunately is really against that. In fact, I don’t even know how you would go about that process with the utility company because when you sign up to do interconnection and for net metering or to get an incentive, it’s usually for a project of a certain size.

And I remember I’ve actually asked my solar installer because I have panels on my roof about doing that, and he said that it would be very difficult and I think most likely it would be treated as a separate installation. So I think we do need new policy, new interconnection rules to make it clear that people should be able to add panels to their installations. One thing that would also be helpful though is if we remove any artificial limitations on how much solar somebody can put on their house right now, it’s often indexed to how much electricity is used or has been used over the past 12 months, and we should remove those restrictions and allow people to put as much solar on their building as they can, recognizing that that energy load will be rising over time if not in that particular building that in that neighborhood or in that community as we electrify everything.

John Farrell:

Our next question is for Matt Roberts, a former Local Energy Rules guest with the Sustainable Ohio Public Energy Council. He has a few questions and I’ll try to tackle ’em all. Number one, is it worthwhile for communities to buy their portion of the distribution grid from an investor owned utility company? There’s sort of two questions baked into that financially. Absolutely. Already the utility recovers all the costs from its captive customers of owning the distribution system. And if you want to make choices about the distribution grid, owning it is a great way to do that. However, the process of buying out that utility is often extraordinarily challenging and time consuming. See our episodes about Boulder, Colorado or about the recent fight in Maine over public ownership, the utility does not want to sell and they fight back very hard. And so just be prepared for that challenge.

John Farrell:

Matt’s second question is, is there a success story for solving the split incentive dilemma and making energy efficiency improvements, especially in high rental communities? So this is the incentive where maybe the building owner doesn’t pay the utility bill, the renters do, but the renters then don’t have permission or the decision-making authority to make improvements that would reduce their energy bills. I would definitely recommend the last episode of Local Energy Rules number 199 with Matt Flaherty, which is going to cover exactly that issue with inclusive utility financing. Third question from Matt and the last one I will address. Should local and state governments procure materials as a way to reduce costs for constituents? Should they also work to streamline permitting on the permitting? Absolutely. There’s already a great tool called Solar App plus that was developed in a collaboration between the National Renewable Energy Laboratory and a variety of cities that creates a presumptive and online and instant permitting process.

John Farrell:

Like you’ve got an iPad with you at the property, you put in the characteristics of the project and you can get a permit immediately. That is the kind of streamlining that we need for solar projects to make it easier to do them. Now, whether or not local and state governments should buy solar panels, inverters, heat pumps as a way to reduce costs for constituents, maybe, I don’t know if that’s a great idea. Certainly cities or states have access to low cost capital through bonds and they could potentially do that, although they’re not experts in it by any means since it’s not a practice that they’re usually in. So I’m not sure. But there are also cooperative models like Amicus Solar. It’s sort of like the ace hardware of solar. Ace Hardware, by the way, for people who don’t know, is a national network of cooperatives that pool their power together, their buying power so that they can compete with hardware stores like Lowe’s or Home Depot.

John Farrell:

So they’re able to get their materials, their products at a lower price because they pool their buying power together and that’s what Amicus Solar does for its members and it certainly could be replicated in any state. Joy Loving from Rockingham County of Virginia asks about the value of working at the state level for policies to shift utility incentives around affordable energy such as compensation for utilities based on environmental and social outcomes. Joy, I love the question. Working at the state level is always really important because that’s the way that our country is structured in terms of regulating electric utilities and energy utilities. So there’s public utility commissions or public service commissions that do that oversight of the for-profit utilities and state legislatures of course oversee any utility that operates in the state and can set the rules for how those utilities operate. I think Hawaii is also a really powerful example, and we had a podcast episode a ways back with Isaac Moriwake who talked about they changed the incentives for the utility in Hawaii to base it entirely on performance, and we’re in the early days of trying to understand how successful that was, but it’s one of the few places in the entire country trying to change from what’s called the cost plus model where utilities get paid back for building a power plant plus some profit to focusing on actual incentives for performance.

John Farrell:

And I think that’s really important. I also just want to note that in Minnesota for example, we worked at the state legislature to pass what was called the value of solar tariff, which tries to calculate some of the environmental and social benefits of solar and requires the utility to include them in its calculation of solar’s value. I only wish other states like California had done that before they slashed compensation for rooftop solar.

We’ve got another question here from Rikki Honnold about whether it’s possible for the largest natural gas users to actually have to pay more than residential users once they renegotiate franchise fees. This is a great call to research that ILSR has done over many years on what are called utility franchise fees. I’ve recommend checking out our website about it, but essentially a lot of cities, while they might not be able to choose which gas or electric utility serves their customers, they do have a contract with that utility called a franchise that allows them to negotiate with the utility every 10 or 20 years over certain aspects of the service delivery.

John Farrell:

And in addition to that, a lot of cities have the authority to set a fee that is charged on those gas and electric bills to cover the costs of those services being delivered using public right of way. And some cities like Minneapolis have successfully used that to create a pool of funding for equitable climate work and clean energy development. So yes, it should absolutely be something that your community looks at.

I’ve just got two more questions from the mailbag, one from Andrew Stone. How have states that have implemented FES order 2222 with both utility and customer owned batteries achieved that? First of all, FERC is the Federal Energy Regulatory Commission and thus order was about creating what are called demand response markets, which is to say non-utility methods of allowing people to say, I have a battery and I’m willing to reduce my energy at peak energy use times on the grid if you’ll pay me for it.

John Farrell:

And the rules that FERC set down are about how do you aggregate together people in order to provide that service sometimes called virtual power plans. I don’t know a whole lot about this more than I learned in my Local Energy Rules episode of Cisco DeVries from OhmConnect, where he talks about the early markets that are available in California and Texas and the way that his company is helping to aggregate customers together to do that. So certainly there are good models of how that can happen, but unfortunately, as Cisco mentions, only two states, California and Texas had markets that they were able to participate in at the time. So I don’t think that implementation has gone very quickly. Unfortunately.

Our last question is pretty broad, but I think pretty insightful about how the system works from Laila Atalla, apologies if I didn’t pronounce your name correctly, but she wanted to ask this question, do higher fixed charges help or hurt energy democracy?

John Farrell:

And she was specifically thinking about in California how they’re considering a significant increase in the fixed charge on the electric bills along with a proposal to make it income graduated. So I think there’s a few things about this question that I love that help uncover kind of how the system works. First of all, fixed charges are supposed to be in general rate design principles for things that are fixed costs. So the important lesson that I learned from an economist a long time ago, but also from people who’ve been involved in utility rate setting is in the long run, all costs are variable. So it might seem like something is a fixed cost today, but that’s because you simply haven’t set the strategy or the planning horizon in order to figure out how to change that cost. And so I’m very skeptical and have worked for many years with folks in a group called Nix the Fix across the country to try to reduce fixed charges on customers because they unfortunately fixed charges, the higher amount you pay on a given month as a fixed charge as opposed to for how much energy you use discourages you from doing anything to conserve or produce electricity.

John Farrell:

And to give an example of how much of an impact that can have in 2021, there were 1.3 million California solar customers. And assuming they each spent about $30,000 putting solar on their roof, which is probably an underestimate given that some of them went solar very early when the costs were much higher, they had collectively leveraged $39 billion in private capital to help supply clean energy to the Golden State. So we need to give people a reason to invest in things like clean energy, and we can’t do that if we increase the fixed charge on their bill. We’re basically giving them a disincentive. We’re saying, don’t bother. You just send all that money to the utility and let the utility figure it all out. And I think that’s really disappointing.

John Farrell:

I’m particularly disappointed in California where the fixed charge proposal is being married with this proposal of having indexing the fixed charge and utility bills to income. We can do income graduated or income indexed charges on utility bills without increasing fixed charges dramatically. The two are not married together. So if California wants to address equity and how much people pay for energy, they should do that. But it doesn’t come about at the same time that you screw all of the beneficial local conservation, energy efficiency and rooftop solar methods we have for reaching our clean energy goals by raising fixed charges. So separate out the two things, focus on what it is that matters and do them appropriately.

I just want to say thank you again for traveling this journey with me on the Local Energy Rules Podcast. Not only through over 10 years and 200 episodes, but also just through this episode today about how it started, what I’ve learned about podcasting, some examples that people have found useful, including our one celebrity callout, where I’ve been learning the most over these 10 years from these different episodes. And I’m sure there’s many that I didn’t mention where I also learned many things. Why this podcast has evolved from just celebrating local and community-based projects to talk about monopoly power and markets, and a call out to other podcasts that I have enjoyed as well as a chance to answer some of your questions from the mailbag. Thank you so much to those who sent in questions in response to our invitation. It was a pleasure to take a moment to talk of those things. And as always, keep your energy local and thanks for listening.

John Farrell:

Thank you so much for listening to this episode of Local Energy Rules and a look back at 200 episodes, the podcast evolution, and a chance to answer some of your burning questions. Look for links to the many Local Energy Rules episodes I mentioned on the show page, where you’ll also be able to find links to the podcasts I’ve recommended. And thanks for joining me on this journey to learn more about energy democracy and monopoly power. Local Energy Rules is produced by myself and Maria McCoy, with editing provided by audio engineer Drew Birschbach. Tune back into Local Energy Rules every two weeks to hear how we can take on concentrated power to transform the energy system. Until next time, keep your energy local and thanks for listening.