Senator with energy chops champions ‘disruptive’ technology 

Source: Hannah Northey, E&E reporter • Posted: Wednesday, May 6, 2015

Independent Sen. Angus King of Maine has emerged as a champion for new technologies taking hold of the U.S. electric grid with legislation that could shake up a decades-old business model in the utility sector.The former television host and utility executive unveiled a bill that would give distributed energy resources — solar, wind, fuel cells, combined heat and power, batteries, efficiency and more — equal footing in the energy markets.”This is disruptive technology. It’s going to change the model that’s been in place for a hundred years,” King said during an interview yesterday. “Basically, we want to be sure this technology has a chance to grow.”

The “The Free Market Energy Act of 2015” would ensure that distributed energy resources would be able to connect to the grid in a reasonable time frame and for just and reasonable fees. It would also lay the groundwork for states to appoint smart grid “coordinators” or operators to manage the distributed units and calls on states to consider alternatives to building transmission — including distributed energy.

King is advancing his proposal as the Republican chairwoman of the Senate Energy and Natural Resource Committee crafts a comprehensive, bipartisan energy bill for consideration this summer. King said his bill has already drawn support from the “green” tea party as a “individual sovereignty issue” but that he has yet to reach out to other senators or House members.

King, a former two-term governor of Maine, is a rare senator unafraid of jumping deep into the energy weeds. Then again, he has almost three decades’ worth of experience in the sector.

In the early 1980s, King was a lawyer in the private sector, and one of his first clients was Swift River Hafslund, an alternative energy development company working on hydro and biomass projects in Maine and throughout New England. King later joined the company and was appointed vice president in 1983.

When that firm laid off nearly all of its staff in late 1988 — the company had focused on alternative energy projects, largely hydropower from small dams around New England as well as biomass — he struck out on his own and launched Northeast Energy Management (E&E Daily, March 16, 2012).

King’s company signed a contract with the Central Maine Power Co. to save 48 million kilowatt-hours of energy each year. The business model proved successful. Eastern Utility Associates purchased the company in 1994 for $19.8 million, the Bangor Daily News reported at that time. King told the newspaper that he had made about $8 million after repaying bank loans, capital gains and other costs.

“We did everything from light fixtures and paper mills to pumps at other kinds of industrial facilities, hospitals, colleges,” King said.

In 2007, King and Rob Gardiner, the former head of Maine’s Bureau of Public Lands and a former director of the Maine Advocacy Center for the Conservation Law Foundation, founded the firm Independence Wind, a company that partnered with New Hampshire-based Wagner Forest Management to construct a 22-turbine wind farm in Roxbury, Maine.

Now, with almost three decades’ worth of experience in the energy sector, King knows the score.

He acknowledged that the utility sector may not embrace the language right away. He’s aware that his measure hits a nerve.

“My guess is that their initial reaction will be negative, but I’m not anti-utility,” King said. “I think that they do incur costs by providing the backup, by providing the wires, that they’ve got to be compensated for that. That’s fair to them and fair to the other ratepayers. The question is, what’s the right number?”

On one hand, executives from rooftop solar installers SolarCity and Sunrun have been vocally defending their business models, arguing that entrenched monopolies are stifling competition. The Edison Electric Institute, on the other hand, has called for a way for utilities to recover the fixed costs of keeping up the grid in the face of third-party rooftop solar, which reduces some customers’ utility bills (ClimateWire, Sept. 17, 2014).

But while some traditional utilities have claimed that distributed generation could trigger a “death spiral,” analysts have found that the technology actually presents a business opportunity (EnergyWire, Nov. 7, 2014).

There’s also growing interest in both chambers of Congress in modernizing the grid.

At a Senate hearing last week, King aligned himself with New Mexico Democratic Sen. Martin Heinrich when he quizzed Energy Secretary Ernest Moniz about whether state regulators have the tools they need to adequately quantify the benefits and costs of distributed generation and storage to make accurate rate cases and what role the national labs could play.

Moniz said DOE needs better formulas to gauge the benefits of such new technologies and services, including in the distribution system, and that the challenge is trying to understand the value of distributed generation and being able to connect to the overall grid (E&E Daily, April 29).

The United States has the ability to crunch complex data from the grid, King said, adding that he could see utilities consulting customers on energy choices rather than just providing wires services.

But ultimately, he said, the industry needs to get on board.

“If the utilities simply say, ‘This is war; we’re going to do everything we can to stop this,’ I think all that will do is be a delaying action. I think this is inevitable,” he said. “The question is, how do we construct a system where everybody wins, including the customers, the environment and national security?”