On Decentralized Power Generation (Letter to the Editor)

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TO THE EDITOR:

I base my remarks on your recent articles “Utilities, Watchdogs and New Rate Rules” on March 31 and “Arkansas Faces Surge in Power Demand From AI and Data Centers” on March 10. I draw upon my experience with my own electrical co-op, and upon my prior career in occupational safety and health, especially my hands-on experience with inspection of manufacturing, heavy construction and mining and tunneling operations. This turned me into a “physical economist” (see below). I have no special expertise in electricity, but I have studied Franklin, Faraday, Westinghouse and FDR.

In your March 10 article, the spokesperson for the electrical cooperatives that produce about one-third of Arkansas power (his figure) sounds more like a spokesperson for a wholly owned subsidiary of a for-profit utility. Moreover, it wasn’t until your March 31 article that we got to hear from professor and regulator John C. Pickett about the investment-plus profit returns on new power plant construction. Also, the article on Pickett — and other informed voices like his that you could have quoted — got shortchanged on column inches, compared with the March 10 full spread on the cheerleading for new centralized plants.

Recently, rather than supporting a program to put solar collectors on existing roofs — especially business roofs — my own co-op, Ozark Electric, encouraged us to “join” with the co-op as “co-investors” in sacrificing, for a solar field, some vacant land better used for agriculture or new structures. True, some time ago you did highlight how electric companies were dragging their feet on approvals for farmer-owned solar spreads, but why not have a full-blown discussion on why the Rural Electrification Act of 1936 was passed, how it materially benefited our World War II domestic programs, and its implications (pretty obvious to me, at least) for today’s electrical power generation policies?

It appears that the bogus argument that individual solar power generators are “subsidizing” non-generators won the day a short time ago, so now power companies don’t have to pay favorable rates to these early adopters. Next step — so predictable — your paper articulating how great the need is for centralized power generation, especially with, as so well articulated by Mr. Pickett, a blank check for returns on uncontrolled construction costs. This is power that all “users” will have to pay for, most likely at locked-in rates subject to very little competitive pressure.

Sure, the recent Texas fiasco demonstrates that there is a continued role for fossil fuel-powered generation. But decentralized generation could abate local storm damage risks, not to mention risks to the power generation grid from hostile actions. And sure, storage of freshly generated electricity poses technical challenges.

Shortly after I first moved here in 2015, an Arkansas native, homegrown in Russellville, remarked that the people who already own Arkansas don’t really want anyone else to make their fortunes here. I suppose your March 10 article’s focus on artificial intelligence and data centers might undercut that observation, but my impression lingers that this is a true statement when we look at who in this state gets to, and who doesn’t get to, generate our electric power.

Inspecting many types of businesses turned me into a physical economist: There are only six ways to create wealth — farming, forestry, fishing, mining, manufacturing and construction. And the service sectors of transportation, communications and computer technology assist in that wealth creation when they increase the frequency of transactions, and hence the velocity of money.

I conclude that a necessary precondition for modern wealth creation, including the reindustrialization of our country and our state, is the manufacture of cheap electric power to enable those nine wealth-creating and wealth-facilitating activities listed above. But the bottom line in your March 10 article is: “We want electricity that is cheap, but not too cheap.”

The gentle waters of the Arkansas Business lagoon soothe the reader, but then, when one ventures out onto the more turbulent waters of the internet, one finds that, once again, Arkansas still rates among the five poorest states.

So Arkansas Business or just Arkansas Business — which will it be?

— Raymond Towne
Fayetteville