With no apologies to the Tea Party, let us all pause now and give thanks for a little socialism in Greater Lansing.
Slinging around “socialist” as a vile epithet in describing barelyleft-of-center President Barack Obama, TP members are not only misusing and cheapening the word, but also forgetting some of the benefits that a tad bit of well-chosen socialism can do for the public interest. In this case, it’s an accountable utility, the Lansing Board of Water and Light, that is sometimes even responsive to that interest. Ratepayers and the environment benefit when that happens, as recent events show.
Before venturing any farther, let’s turn to the classic definition of socialism. It’s “any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods.”
Convert the theory to practice on a limited basis, and you have BWL, the state’s largest publicly owned utility. Undoubtedly, the utility itself will shun the suggestion that its name and “socialism” can be twinned, but those outside it need not be so shy. Collective ownership of the source of electricity service by the public in the area means there’s the potential of good energy policy — and sometimes the reality of it.
Municipally owned utilities reach back to the late 19th century. A reaction to greedy private utilities that threatened to charge outrageous sums for the modern necessity of electricity, municipal versions were consistent with the Populist movement that for a while revolutionized U.S. and state government. There are now about 2,000 in the U.S. serving over 40 million customers. Because they don’t have to pay dividends, they can offer lower residential electrical rates — about 20 percent less than competitors in the case of BWL, about 14 percent nationally.
Why is this relevant now? Mostly because the recent actions of the investor-owned utility that encircles BWL, Consumers Energy, have been so contrary to any sensible definition of the public interest. And don’t let last month’s announcement by Consumers of a hold on its proposed $2.3 billion coal-fired power plant in Bay City wipe that fact out. That decision was based on slow electricity demand growth, said CEO John Russell, who added that oxymoronic “clean coal” will remain part of its plans. Michigan spends $1.36 billion annually to import coal already, sending the money out of state and dragging a struggling economy farther down.
It’s well known in state energy policy circles that Consumers is not only recalcitrant on clean energy approaches and worse than the municipals, but more regressive than southeast Michigan’s investor-owned DTE. There, upper management has a respectable vision of where energy generation and usage is headed. That company has now embraced the reality that climate concerns have eliminated new coal plants from its generation plans.
Consumers has also done its best to stonewall any clear reporting on how much it will have to pay for coal ash stored in landfills, ponds and other holes in the ground after the massive 1.1-billion pond managed by the Tennessee Valley Authority burst in 2008, triggering a $1.2 billion cleanup.
Meanwhile, BWL is beginning to distinguish itself on some environmental matters. Its solar panel array was the largest in the state when built in 2008. It was the first utility in the state to have a renewable energy generation goal and the first to adopt a statemandated efficiency program. BWL has also been more nimble than its private sector cousins in dealing with coal ash landfill monitoring and cleanup. And its recent decision to hold off on additional electricity from coal was at least partially due to strong pressure from public advocates.
It’s not all peaches and cream with municipals. “In theory,” says Marty Kushler, a local energy expert who works for the American Council for Energy Efficiency, “public utilities should be less resistant and more enthusiastic about things like energy efficiency, because technically they don’t have shareholders who want profits, and their prime interest should be the well-being of their members.” But he points out that municipal utilities often make themselves with the revenues that come with selling more and more power, and succumb to industry subliminal peer pressure, adopting the investor-owned mantra of growing bigger and bigger (and in the process polluting more.” He adds that there are “really good” examples of municipal utilities that customers should encourage their own to mimic.
David Gard, the energy program director at the Lansing-based Michigan Environmental Council, agrees on the theory, at least, pointing out that municipals “don’t face the pressure of quarterly Wall Street returns.” With enlightened leadership and responsible oversight, they’re ‘capable of making smart decisions.”
BWL and its like are no power, ratepayer or environmental messiahs. They’ve damaged the public interest just like the investor-owned variation — but not as badly or as arrogantly. They can’t afford to treat their nominal owners that way. And they offer the potential to move the end-of-coal, more efficient, clean energy agenda forward in a way Consumers Energy won’t. So hurray for a little socialism.
(Dave Dempsey was environmental adviser to former Gov. James Blanchard. Dempsey@lansingcitypulse.com.)