Deregulating Electric Power

Report Outline
Special Focus

Overview

In 1976, a young environmentalist burst in on the intellectual debate over American energy policy with a radical vision of the electric power system. Rather than redical vision of the electric power system. Rather than relying on large power plants, he argued, the nation should turn to such small, diverse sources as windmills, small dams and solar power. Amory Lovins, then the British representative of the environmental group Friends of the Earth, called his small-scale solution “the soft path,” suggesting an environmentally benign and easily comprehended approach to technology. He attacked the conventional approach as fundamentally undemocratic, calling it the “hard path.”

In many ways, Lovins merely articulated the growing hostility of his generation toward certain energy technologies—nuclear reactors, strip mining, offshore oil-drilling—that were potentially damaging to the environment. He expressed the view that central power plants were in the hands of “a faraway bureaucratized technical elite,” a utility monopoly unsympathetic to the populace. The back-to-the-earth movement of the 1960s and early 70s had already introduced an alternative to this monopolistic world: self-sufficiency through do-it-yourself energy projects, such as methane producers and solar heaters.

But Lovins added an economic argument: small renewable energy sources could provide cheaper electricity than conventional plants. “We though it was desirable to treat the grid [the nation's transmission network] as a common carrier and let all options compete,” Lovins said in a recent interview, looking back at his 1976 portrayal of deregulated electricity. “The electric company would come to look like the phone company. It would mediate between many users.”