Utilities and PVs Allan Sindelar c. 1993 Allan Sindelar Most renewable energy users do so because of the utility: either their local electric company wants $25,000 a mile to run a line to their remote home, grid power is not reliable, or they want nothing to do with the way the electricity was produced. Nevertheless, utilities are becoming increasingly involved in photovoltaics (PVs). This article - first of a series - is an overview of the different types of electric utilities, how they operate, and the changes that are causing many of them to investigate PVs. Utilities Come in all Shapes and Sizes Five major utility sectors provide the nationŐs electricity. Seventy- five percent of electric customers are served by 213 private, or investor-owned utilities (IOUs). Fifteen percent get their power from 2203 nonprofit community-owned public power systems (munis). The rest are served by 865 rural electric cooperatives (co-ops). Most of these were set up through federal efforts in the 1930s and 40s to electrify areas not profitable to the IOUs. In addition, 13 federal agencies supply wholesale power to utilities, but donŐt sell directly to customers. Finally, there are 2800 independent power producers, or cogenerators, which aren't considered utilities, as they generally serve themselves only. But they account for 75% of all new capacity additions since 1980. The IOUs, with an average of 365,000 customers each, serve most of the urban areas of the U.S. and own three-fourths of the installed power plants. IOUs can most afford to support research and development (R&D) efforts to better serve their customers and cut operating costs. The co-ops average 13,000 customers each, and the munis half of that. The co-ops own only four percent of the plants, and buy most of their power wholesale from the government. However, they own and maintain far more miles of distribution lines per customer. Some of these lines run miles to a few farms, wells, or other small loads. Co-ops need innovations like PV systems that will cut their transmission and distribution costs. The Role of PVs According to John Bigger of the Electric Power Research Institute (EPRI), 66 utilities presently have cost-effective PV systems in operation. Pacific Gas & Electric (PG&E), an IOU in northern California, has the most with over 1000. A few utilities have about 100 systems installed but most have fewer than 20. Photovoltaics can supply power in three major areas for utilities: large-scale bulk power, low power/high-value applications, and high- value grid support. Bulk applications reflect the traditional "supply-side" approach to power generation. Early utility perceptions of renewable energy centered on developing the technology for large central generating stations; some met with success. Seventeen thousand wind turbines, most of them in California, are now feeding about 1500 megaWatts (mW) of cheap electricity into the utility grid. Solar thermal plants in the Mojave Desert supply peak power to 150,000 southern California homes. This supply-side approach was good for R&D, but required expensive PVs to compete with cheap conventional fuels. Now, used quadlam PV modules are sold from dismantled demonstration plants, and PVs are widely misperceived as not cost-effective. Small-Scale Applications Photovoltaics can be economically competitive in low-power/high value applications; these are low-power (from a utility's perspective) situations where grid power is not readily or cheaply available. Home power PV systems are of this type. Most use an array, controller, and batteries to supply low-voltage DC power for a specific task. EPRI has identified 65 of these applications common to most utilities. Cost-effective PV applications can be tiny, such as sensors for stream level and flow rates or as remote warning sirens at nuclear power plants for radiation leaks. Water pumping is a good application of PVs. A well pump doesn't use enough electricity to cover the cost of maintaining sometimes miles of power line to a remote well, much less the cost of rebuilding lines after an ice storm. K.C. Electric Association, a co-op in eastern Colorado, installed a 600 Watt PV-powered pump system instead of replacing a downed line. Several utilities are investigating using stand-alone systems to supply power to remote customers in their service areas. Idaho Power has begun offering remote home systems in a three year trial program. These standardized systems are designed, installed, and maintained by the utility; the customer pays an initial fee and a flat monthly charge for the electricity. In an unusual "large small-scale" application, Public Service Co. of Colorado (PSC) is replacing a five-mile power line serving White Pine, Colorado, a town of 45 mostly summer homes, with a 35 kW hybrid PV/generator system. While the system is nearly four times the cost of a new line over the mountains, PSC sees it as a good learning experience for future installations. Most utility uses of PVs are in small-scale applications. Many have already proven to be cost-effective immediately, or with short payback periods. Thousands of these applications currently exist in the U.S., and most utilities haven't taken advantage of them. High-Value Grid Support PVs have certain advantages as a generating source which make PV power more valuable at the site of use than it would be at a central power plant. PVs are modular, and can be installed cheaply and quickly. Systems can be sized and located where they will fit a specific need for power, from a few watts to hundreds of kilowatts. Since PVs are visually attractive and nonpolluting, panels can be placed on rooftops or light poles. Peak sunlight hours often correspond to the peak demands of commercial buildings. Adding to PV's competitive advantage, some states are requiring utilities to include the costs of environmental impacts in choosing new sources of electricity. A PV "feeder support" system near a growing community could be cheaper and more environmentally acceptable than a new power line or upgraded distribution equipment. Some utilities are researching 3-8 kW grid-connected arrays on neighborhood rooftops and larger arrays on commercial buildings. PG&E, through its Photovoltaics for Utilities Scale Applications (PVUSA) program, expects to bring a new 500 kW grid-support plant on-line during 1993. New Ways of Thinking Utilities, especially IOUs, are conservative. As monopolies with a regulated profit margin of about 12 percent, they have little incentive to be innovative. If they gamble and win, they make little or no more money for their stockholders; if they lose, the stockholders, ratepayers and regulators object. In the past, as electric demand increased, utilities simply built more plants. Many overbuilt using projections of increasing demand. As ratepayers learned to conserve in the 1970s, the energy boom collapsed, and some utilities faced bankruptcy. Now, with demand increasing and many older plants wearing out, utilities are reluctant to again make large capital investment in centralized plants. Heeding Amory Lovins' dictum that negawatts are cheaper than megawatts - that is, efficiency is cheaper than building new plants - many are looking to use the existing power more efficiently and thereby reduce demand. But doing this requires making thousands of efficiency improvements at the points where electricity is used and this runs counter to traditional, top-down utility management. Utility profits have historically been tied to the amount of electricity sold. In order for utilities to afford to promote efficiency, they must be allowed by state regulators to separate profit from the amount of power they sell - to make more money from selling less electricity. This is a radical idea to many utilities as well as regulators, but has happened in several states. PG&E offers rebates on compact fluorescent bulbs and efficient appliances, and PSC has paid to replace electric heaters with gas furnaces. SMUD - A Shining Star Sacramento Municipal Utility District (SMUD) is the fifth largest muni in the U.S., and one of the most progressive. In 1986 its customer-owners voted to shut down its Rancho Seco nuclear plant. On the site is the largest operating PV power plant in the country. SMUD's goal is to obtain 1200 mW from conservation and renewable sources by the year 2000. SMUD is currently analyzing bids for adding 700 kW of new PV generation during 1993. Two hundred kiloWatts will come from construction of a grid-connected PV substation. Another 100 kW will be installed on one or two commercial buildings. The remaining 400 kW will be supplied by small grid-connected systems of 3-4kW each, owned by the utility and mounted on customers' rooftops. According to Donald Osborn, Solar Program Project Manager at SMUD, utilities can't assume that by the year 2000 PVs will be available to play a substantial part of our energy supply. They need to purchase systems now on a sustained basis and in substantial amounts in order to maintain the market volume that will ensure rapid development and reduce prices. Not all utilities are as forward-thinking as SMUD, which has a progressive management and a clear mandate toward conservation and renewable energy from its ratepayer owners. As a muni, it doesn't need to receive state Public Utility Commission approval on its investment decisions. This freedom means that SMUD can more easily invest in strategies that require higher initial costs but pay off in the long run. On the East Coast, Florida Power Corporation has been a pioneer in exploring PV applications. It has been using PVs since 1975 to supply power for navigational buoys on Tampa Bay. Florida Power was also involved in an electric vehicle project with the University of South Florida. Part of the project was a 20 kilowatt (peak) array to charge the vehicles, with the remaining power fed into the electrical grid. Florida Power's installation of a dozen PV-powered irrigation controllers on highway median strips is a good example of a high-value application. Even though grid power was readily available, using PVs eliminated "jack and bore" costs of running lines under roadways, and was a cheaper solution. What it All Means Few people at NASA, who developed PVs for the space program, imagined that there would be a huge demand for PVs on earth, much of it initiated by backwoods types. PVs are a fledgling industry, developed by small entrepreneurs serving a diverse, self-reliant clientele. Both dealer and customer have been generally opposed to or disinterested in big business. Home Power readers are where the real expertise lies. We are the ones living with PVs and know how to conserve. But many of us haven't noticed that meanwhile, PVs have been quietly entering the mainstream. If Home Power readers want to change how the U.S. and the world do business, then the utilities must be involved. Photovoltaics offer specific, practical, and economic benefits while reducing energy consumption and environmental damage. Every utility has cost- effective applications; rural utilities have the most. Some utilities are starting to recognize this, but thousands more haven't. Home power users have nothing to gain by an adversarial relationship with their utility. Even an IOU responds to public pressure. The process is education rather than opposition. Every utility should know about PV applications, and we can make this happen. Whether an IOU, muni or co-op, every utility has a trade organization that can provide information. If a utility starts replacing its most expensive line extensions with PVs, it lowers its overall cost of doing business, which may even translate into rate reductions. We can get involved with our state public utility commissions, and teach them the need to allow utilities to profit from conservation. Unregulated munis and co-ops, which still associate their well- being with the amount of electricity they sell, can benefit from our educational efforts as well. Since these are owned by their members, they respond to direct community involvement. They are paying more for new electricity too, and the community's best interests are served by keeping prices down. Donald Osborn of SMUD sums this up: "In the absence of a rational national energy plan, it is up to local communities, states, utilities and the public at large to take the lead in demanding and providing for the extensive use of solar energy." Access Allan Sindelar, 120 Alta Mesa Court, Moraga, CA 94556 510-284-1368 Special thanks to Kay Firor of Blue Mountain Energy for her assistance with this article.