Managing Cost, Reliability, Responsiveness, and Sustainability

Through a series of blog posts, I chronicled some energy improvements that I made to my Alameda home:

• Results of My Home Energy Audit
• Improvements to My Home based on My Home Energy Audit
• The Continuing Benefit of the Dollars and Cents of My Home Energy Audit

One of the other things that I did was that I signed up for Alameda Green. Though I pay a few dollars more for the electricity that I consume, the energy is obtained from renewable sources.

Alameda Municipal Power (AMP), our community-owned utility, is 130 years old. In fact, it's the oldest public utility west of the Mississippi River. I am a fan of having my power come from the city where I live. It adds a certain Mayberry R.F.D. charm to our little slice of California.

AMP's mission is to:

Manage and safely provide reliable, cost effective, environmental friendly electric service for a sustainable Alameda.

As AMP works to install and configure 33,000 smart meters, AMP is working on its strategy for the next 10 years. Their strategy needs to pay attention to market trends that are influenced by technology and culture. For AMP, the purpose of having a strategy is to provide a connection between individual staff activities and utility-wide priorities.

Though AMP routinely works on its strategy, it is of key importance now for two factors:

Technology

Historically, the demand for energy has paralleled the growth of the economy; however, starting in 2008 when both the economy and energy consumption took a dip, the economy has continually grown but the demand for energy has not kept pace. In short, although the economy has rebounded in the last 9 years, energy demand has not risen accordingly. For example, manufacturing, an energy-intensive industry, has not returned. In addition, appliances and other devices (e.g., flat screen TVs, light bulbs) have increased in efficiency and continue to do so. This is a problem for utility companies that depend on economy of scale to maintain an aging infrastructure. Though demand is declining, the utility's costs are not.

Culture

As the baby boomers retire and are replaced by millennials, energy usage profiles change. Although millennials are often more apt to use devices that need to be recharged (e.g., smartphones, tablets), they are also more apt to be environmentally conscious. For example, they take advantage of solutions like mass transit that result in an overall drop in energy consumption.

Given these factors, what should AMP, or any utility, do in response? One possibility for AMP to consider is the electric vehicle. California dwarfs other states in terms of the number of electric vehicles on the road. In particular, the city of Alameda has three times the national average. Recharging these vehicles could replace some of the demand that has not kept pace with the economy. This factor could help AMP set its strategy going forward since Alamedans share a concern about the environment.

The elements of the AMP strategy would likely include:

• Sustainability
  AMP gets its power from:
  • Geothermal (geysers)
  • Landfill (methane gas emanated from decomposing trash)
  • Large hydro and small hydro
  • Wind
  • Purchased from the energy market (often coming from natural gas)
  Most of these sources are carbon neutral.
• Reliability
  Alamedans want to flip a switch, and the light comes on.
• Responsive
  As a relatively small utility without a huge bureaucracy, AMP can adopt customer-first policies. AMP answers to a Public Utilities Board that includes the City Manager. This is a far cry from a Public Utilities Commission that needs to satisfy the needs of multiple cities with diverse needs.
• Competitive
  Current AMP rates are lower than Pacific Gas & Electric. Whereas the small-town appeal attracts residents to Alameda, competitive utility rates attract businesses.

It will be interesting to see how AMP's strategy rolls out. A meeting for public comment has been scheduled for January 22, 2018 at 4:00 pm at the AMP office on Grand Street. Alamedans are encouraged to attend.