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Open Letter to the DPU on Green Communities Act

Preface to comments submitted for October 30, 2008 hearing on Massachusetts' new Green Communities Act

By Lance McKee

Dear Department of Public Utilities (DPU),

It's a cautious beginning: The Green Communities Act allows 1% of an electric power distribution company's power to come from "net-metered" user-owned rooftop photovoltaic panels, neighborhood/campus co-gen plants (generating both power and heat for local use), school-owned wind turbines, etc. After you have received public comment on October 30 and made your decisions, we will see how your regulations will minimize or optimize that 1% for user/owners who want parity with power generator corporations in terms of pricing of electricity sold, receipt of renewable energy credits, freedom from unreasonable connection fees, rights to install local distribution facilities, etc.

Utility executives, of course, are diligent in this matter. They owe it to their shareholders to try to persuade legislators and regulators to preserve the current model of centralized ownership of electric power generation assets. The centrally owned assets could be clean (wind, solar etc.), and they could even be physically decentralized -- what's called "on-site" or "distributed" generation. Incumbent owners of big power plants are likely to embrace distributed generation IF the state provides a regulatory environment that makes it more profitable for roof owners to rent their roofs to the utility than to install their own solar panels. Society will get the climate benefits, peace dividend and energy security benefits of clean energy. Utilities will argue, quite reasonably, that the corporate ownership model will, on a macroeconomic level, make more sense than user ownership because of economies of scale and lower transaction costs.

But favoring the incumbents might betray the public interest. Don't unthinkingly favor Wall Street "green" over Main Street Green Communities. Were your new regulations to favor corporate ownership, our state's individuals, businesses, municipalities, schools and houses of worship would be discouraged from investing in on-site energy production. Our communities would not get energy dollars circulating locally, and the Clean Energy Revolution would deliver fewer local jobs than it would if you grant parity to small producers. Society would lose the boost to energy conservation that comes when user/owners shut off their lights so they can sell their surplus power. The user/owner model would migrate more slowly to developing nations, delaying the growth of energy-independent middle classes and good trading partners. We would have less overall investment in clean energy, and people would have a smaller personal stake in the clean energy revolution. And we would be missing a terrific opportunity to create small businesses and jobs in Massachusetts.

If you think the distributed, user-owned energy production asset model is impractical or futuristic, read what former chairman of Motorola, Robert Galvin, and former CEO of the Electric Power Research Institute, Kurt Yeager, have written about the Smart Grid and "Perfect Power". Talk to the people at the Interstate Renewable Energy Council and the Network for New Energy Choices. The train is leaving the station.

Why delay the inevitable? Like automobiles, electric appliances, computers, and cell phones, the Clean Energy Revolution is about widespread ownership of affordable, high tech devices that use a shared - and mostly fair and open - network infrastructure to increase opportunities for individuals, governments and businesses. The old "only corporations need apply" model is obsolete in a digital world, and it is obsolete in a U.S.A. where both presidential candidates are (finally!) talking about energy systems' externalities. The Green Communities Act gives you a platform you can use to make the new model work in Massachusetts. In your deliberations after you receive comments on October 30, use the Green Communities Act to create a regulatory environment that unleashes all the positive externalities that arise from both distributed clean electric power generation AND distributed ownership of the generation assets!