Page 38 RAIN Spring 1986 Small Is Sensible: Richard Munson on the New Era of Electricity Generation Interview by Michael Philips A combination cfhigh utility rates andfederal rules are spurring a new generation of “electric entrepreneurs" who are selling utilities power generated by wind machines, solar cells, cogenerators, and small hydroelectricfacilities. These entrepreneurs are starting to change theface ofthe electric utility system by challenging the power production monopoly utilities have enjoyedfor 60 years. In The Power Makers, (Rodale Press, 33 East Minor Street, Emmaus, PA 18049, hardcover $16.95) author Richard Munson,founder of the Solar Lobby, details the background, current status, andfuture prospects ofsmall power generation. The book also outlines the reasonsfor the utility industry's current woes, including overinvestment in uneconomic nuclear power plants and the lack ofinnovation and adaptation within utility management during an era ofhigher costs and lower demandfor electricity. In thefollowing interview, Munson maintains that the era of the large, centralized power plant is over and that America's energyfuture belongs to those emerging entrepreneurs who can generate electricity at the lowest cost. —Michael Philips RAIN: Several years ago small power producers or “electric entrepreneurs” were almost unheard of or at least not as prev^ent as they are today. What has changed? How come they're more prevalent? Munson: There really has been a revolutionary change in the electricity business. These independent power producers, who as you say a few years ago were dismissed as a bunch of backyard tinkerers with limited potential, are now a multi-billion dollar industry. Hundreds of new companies and entrepreneurs as well as some of America's biggest businesses Photo by Michael Phillips are now involved in this. The change, I think, results because of two causes. The most obvious is economics. That is, the cost of electricity from utility monopolies has gone through the roof, particularly for those utilities that have been building nuclear power plants that have gone over budget. Therefore, it's given entrepreneurs, who think that they can generate electricity cheaper than the utilities, a wonderful opportunity to try their hand. The second is a law that was passed back in 1978 by Congress when they were trying to encourage the development of alternative technologies. That law, the Public Utility Regulatory Policies Act, or PURPA, allows an entrepreneur to sell electricity back to the utility company. At the time that it was debated and passed, oddly enough the electric utility companies overlooked it entirely and lobbied on other issues, I think arrogantly believing that no one other than a utility engineer could possibly build an electricity generator and run it. Lo and behold, the law was passed. President Carter signed it, and a bunch of independent power producers began to build their own electricity generators and approached the utility monopolies and said, “I'm here. Let's sign a contract. I want to sell you electricity.” The utilities basically panicked, and filed a series of lawsuits which finally reached the Supreme Court in May of 1983, and the Court unanimously upheld the law. So I think the combination of economics and Congress saying that indeed some form of competition on the electricity market would not only encourage the development of alternative technologies but be good for the consumer as well, I think those two things have really given the push to independent power producers.
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