When Henry Kissinger quipped, "Power is the ultimate aphrodisiac," he wasn't talking about electric utilities. But readers deluged us with email and online comments about staff writer Anya Kamenetz's July/August article on microgrids. Skeptics worried about costs, subsidies, and monitoring locally generated power fed back into the grid ("Your neighbors don't want dirty power corrupting their PCs or LCD TVs"), but no one denied the appeal of more renewable energy.
As an economist at the Massachusetts Department of Public Utilities and one of many implementing the Green Communities Act, I was delighted to read "Beyond the Grid" (July/August). With all the buzz about adding intelligence to the electricity infrastructure through advanced technologies and distributed generation, the idea of new cumbersome transmission lines is a step in the opposite direction. Routing electricity, even from renewable sources, across the continent begs serious questioning of such costs and benefits.
My perception has been that the structure of the utility determines the receptiveness to change. Take the Sacramento Municipal Utility District (SMUD), with a board of directors that is directly elected by the popular vote in Sacramento. This is a leadership team that listens to customers. It was the initial leader in photovoltaic (PV) systems. Investor-owned utilities are reluctant to come to the table; irrigation districts (actually electric utilities in California) are quite receptive to innovative renewable-energy opportunities.
The true cost of local renewables is actually double the price of grid-based electricity. The author does not include the substantial government-mandated subsidies, being paid indirectly by taxpayers and ratepayers, that make local renewables look economically attractive. While there are subsidies to grid-based electricity as well, they are modest in comparison. In order to move forward with a green plan that will not bankrupt us, we need to make decisions based on actual costs. We need to understand that grid-based electricity is incredibly cheap, and that it will be difficult to match in terms of economy. Although the cost of renewables and related technologies is decreasing, we would need some disruptive breakthroughs in photovoltaics and inverters to get close to the price of grid power.
Writer Anya Kamenetz responds: The concept of "true cost" can indeed be a slippery thing. For more than 100 years, our federal, state, and local tax dollars have helped pay for the grid, power plants, coal mines, and oil derricks. Utilities' advantages are written into the laws from coast to coast. Rate setting allows utilities to recover their costs predictably, which in turn gives them access to low-cost capital, and eminent-domain processes give them access to land. Federal money also goes to utilities directly. According to a 2007 report by the GAO, federal appropriations for electricity R&D totaled $11.5 billion from 2002 to 2007, while federal tax breaks related to elec-tricity production totaled $18.2 billion. When you add in the cost for our military to defend petroleum-production sites around the world, oil alone costs taxpayers some $39 billion a year. Congress is attempting to put a real figure on the environmental costs from global warming, which has been estimated in the trillions, with cap-and-trade legislation. Viewed from that angle, fossil-fuel generated, grid-based electricity is anything but cheap.
Amazon vs. Apple
After the lessons that should have been learned from the music and film industries, publishers should be planning to cover their collective assets right about now ("The Evolution of Amazon," July/August). Thanks for keeping an eye on the primordial soup of publishing's evolution.
Jon De Graff
Bronx, New York
The biggest draw of the Kindle seems to be the "always on" Sprint EV-DO wireless, which allows not only immediate book downloads from the store but also adventures (with lots of obstacles) getting around the rest of the Net, at no further cost. It could be the Amazon crowd does like to read and isn't disappointed to see no whiz-bang features.
I'm an ex-apple exec. I just got my Kindle. It's a good news/bad news story — for Amazon. Good design. Obvious marketing/sales opportunity. Really falls short in out-of-the-box experience. There's no wow factor. I get a dictionary and documentation? Why not start me off with the book of my choice? There's a real opportunity for Apple to jump in and become the "hot" book choice. Bezos has left the door open.
Mercer Island, Washington
After reading "Why America Is Addicted to Olive Garden" (July/August), my interest was piqued. Chianti-braised short ribs with risotto? This definitely wasn't the Olive Garden I remember from, lo, those many years ago. Today, I decided to stop into one on the way home from work. I was very impressed with the polish of the presentation.
Good to know that the cheese biscuits are still at Red Lobster, but I might have to think about that a bit more.
West chester, pennsylvania
Is Overhead Overrated?
Unlike a profitable capitalist enterprise, a nonprofit only exists due to the benevolence of others (Do Something, July/August). That dynamic affords those people the right to ask how their money is spent, since what draws them to the cause initially is presumably the cause itself, not how well the charity pays its employees and advertisers.
Charities tend to have a lot of startup paperwork, but subsequently have loose minimum-donation requirements, especially here in California. It is easy to conceal a charity's nefarious activities as a shell for funneling money to lazy executives and socialites. Furthermore, there are myriad ways to game the regulatory system through creative accounting and even more creative classification of operating activities. All this means that some skep-ticism and suspicion are warranted. There is no filter for evaluating a nonprofit's credentials, management expertise, comparative strength relative to its peers, and so on. Overhead is all we have to gauge effectiveness.
I enjoy the magazine and Lublin's columns tremendously. However, I have been involved with charities before as a staff member and as part of the board, and I have been disillusioned. I think nonprofits should be run like startups, with nothing considered sacred just because the cause is noble and the mission is just. If the lofty goal is to allocate willing resources to needy causes as efficiently as possible, improving efficiency and transparency will only help you succeed faster.
San Diego, California
Your recent coverage regarding technological developments in tracking one's own fitness (Fast Talk, July/August) affirms that there's a significant shift in how people are relying on tech breakthroughs to help them improve their day-to-day performance. As a matter of fact, at Philips we are launching a program that relies on advanced 3-D — accelerometer technology, the same technology found in a Wii, to track movement and mobility during the course of a regular day. I'm glad to see that Fast Company doesn't just promote technlogy for technology's sake.
Erik de Heus,
Amsterdam, the netherlands
Rebranding Julie Roehm
I say bravo to you, Julie Roehm ("The Scarlet Woman of Bentonville," July/August). The public is quick to forgive the men who have wronged people. Women always have a harder time being forgiven.
New York, New York
Was the article an attempt to elicit sympathy for Roehm? There are thousands of people who are jobless and can't afford their homes. Those people didn't necessarily lose their jobs of their own accord. Roehm lost hers after not adapting to company culture. An exec at her level should have known better.
Charlotte, North Carolina
As a clinical psychologist and executive coach, I was intrigued by Ms. Roehm's epiphany of her ego not being defined by a job title. For some refugees from the financial markets, I have found that it is truly a gift that they lose their jobs and have to look at themselves using different suc-cess criteria.
Red Hot Idea
Netflix's current model also rests largely on "in-between" technology — shipping DVDs through the U.S. Postal Service (Tech Edge, July/August). Like Redbox, Netflix built a business based on the realities of the current technology environment. Often the drive toward the future blinds us to the value of "in-between" solutions.
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In June's Most Creative People feature, we should have said that Tyler Perry (No. 21) created the first major commercial black-owned film studio. Ralph Wilcox's Jokara-Micheaux Production Studios opened in 2006.
A version of this article appeared in the October 2009 issue of Fast Company magazine.