Building Local Power

By Institute for Local Self-RelianceSociety & Culture News News Commentary

Building Local Power episodes

August 25, 2022 Inflation: The True Monopoly Story
"For every crime, you need means, motive, and opportunity," Rakeen Mabud explained on the Building Local Power podcast. Executives at some of the largest monopolies in our economy are using their market power to jack up prices on consumers. Their means is market power. Their motive is profit. What is the opportunity? The opportunity is for CEOs to pocket the revenue from price hikes while blaming inflation for the increases.

On this episode of Building Local Power, Rakeen Mabud the Chief Economist at Groundwork Collaborative and Ron Knox, Senior Researcher and Writer at the Institute for Local Self-Reliance, take us on a riveting journey exposing the story of inflation that most economists don't want to tell.

As workers, citizens, and small businesses are made increasingly vulnerable in the face of rising prices, corporate profit margins are hitting a 70-year high. So, despite real issues with a broken infrastructure, the war against Ukraine, and a fragile supply chain, the recent history of unchecked mergers and corporate greed underlies much of what has left the majority of Americans so vulnerable in our economy today.
40 min
August 11, 2022 Creating New Narratives: Youth Are the Present — Episode 157 of Building Local Power
"Young people have the energy to respond immediately to crises," Addison Turner, Worcester Youth Cooperatives organizer, stated in a new documentary "Radix: Youth Build Solidarity and Worker-Ownership in the Midst of the Pandemic." The pandemic exacerbated the deeply rooted issues in cities around the nation — but the youth of Worcester, Massachusetts, decided that they wanted to enact change to create a better now. Their action lead to the formation of the Worcester Youth Cooperatives where young people are delivering food and other assistance to neighbors on bikes, growing their own food, and bringing power and a voice to Gen Z.

On this episode of Building Local Power, we are joined by two youth collaborators who played an integral role in developing the Worcester Youth Cooperatives, Mario Harper and Samuel Posner. Our third guest is now an adult ally and organizer, Addison Turner, who is also featured in "Radix." The guests detail their experience growing up in Worcester, lay out the social and cultural inequities that the city faces, and rewrite popular ideologies to encourage an active community. Addison states that "we need to destroy the myth that youth are the future. Youth are the present."
43 min
July 28, 2022When a Win is a Win, and a Loss is a Lesson – Episode 156 of Building Local Power
What can you win if you fail?
Minneapolis has a unique story of its path towards clean energy. Although Minneapolis failed to get a public utility on their first significant push, they ultimately made a deal requiring utilities to engage the local government and residents more in their operations. So despite their public power pursuit not achieving all of their aims, what the advocates in Minneapolis gained was increased leverage to push for more clean energy.
While Minneapolis’ story is unique, it shares some common themes with cities all across the country looking to move to public-owned utilities that provide cleaner energy. This episode previews a new six-part series from the Local Energy Rules podcast that debuts August 17, telling these stories. The series, “The Promise and Perils of Public-Owned Power,” traverses cities’ trajectories towards controlling their own power.

What to look forward to:
What public power means
Four ingredients that improve the odds of success in moving to public-owned power
What cities learned and accomplished in their advocacy for public-owned power
Other ways cities can leverage their power to address clean energy

“What’s so important about the idea of public power is that it localizes the decision making. This is one of those key benefits that we’re gonna talk about in this series about what you win if you fail, which is all of a sudden you get engagement from your local elected officials who are really accountable and close to you, you know, like a couple phone calls to a city council member is all it takes to get them to pay attention to an issue. So if we can get cities passionate about renewable energy and caring about renewable energy to address the needs of the community, all of a sudden we have folks that are lot easier to work with.” – John Farrell
Related Resources
Local Energy Rules Podcast (find “The Promise and Perils of Public-Owned Power on August 17 here)
Local Energy Rules Episode on Minneapolis’ clean energy partnership
The Sum of Us by Heather McGhee (buy at your local bookstore!)
Heather McGhee talking about The Sum of Us on NPR, How to Citizen with Baratunde, The Ezra Klein Show, and more!
Other energy sources that have alliterated titles:
ILSR Asks Arizona Commissioners to Consider Community Solar
Implemented Correctly, Community Choice Energy Can Support Colorado Communities in Their Goals
Transcript
John Farrell:
And what’s amazing and I think what’s so important about the idea of public power is that it localizes the decision making. This is one of those key benefits that we’re going to talk about in this series about what you win, if you fail.
Reggie Rucker:
Hello, and welcome to Building Local Power, a podcast of the Institute for Local Self-Reliance dedicated to challenging corporate monopolies and expanding the power of people to shape their own future. I am Reggie Rucker, one of the hosts on this journey, along with my co-host, Luke Gannon, who frankly, does all the work. I just get to show up and look pretty. Luke?
Luke Gannon:
Thank you, Reggie. My mom was listening to the most recent episode and she was like, “I really like how Reggie summarizes what the guests say. It’s really useful.” So, I wouldn’t say that I do all the work. But I’m Luke Gannon, the other co-host. And without further ado, today on the podcast, I am welcoming my colleague and co-director of ILSR, John Farrell.
John is also the director of the Energy Democracy Initiative. I am sure you recognize his voice because he has been on here many of times. John and the energy team are releasing a new six part series on public power. So, we welcome him on the show today to find out just exactly what this series is all about, and why you all should be marking your calendars in anticipation of its release. Welcome, John.
John Farrell:
Well, thank you so much. It’s great to be here.
Luke Gannon:
So John, to start off, can you briefly describe to us what this series is about?
John Farrell:
Yeah, so the series is going to be called, The Promise and Perils of Public Owned Power, in part, because we really like alliteration on the energy team. And the idea behind it really is that there are over 150 cities across the United States that represent, I think something like a quarter of the U.S. population that have made very bold commitments to get to a hundred percent renewable energy by some date. Sometimes it’s 2030 or 2035, in the next decade though, for many of them.
And the issue for a lot of these cities is, they don’t really have control over where a lot of their energy comes. They’re served by private electric utilities or private gas companies. I mean basically, their energy comes from places that they don’t have control over. These are companies that might be regulated at the state level and not the city level.
And so, there has been a few cities that have looked at taking over their energy companies. This is a process called, municipalization. But the idea is that they take over and then they do have control over this part of the energy system that is so crucial to meeting their clean energy goals. Maybe they have climate goals or just shortly after Joe Machin sank yet again, congressional action on climate change. And a lot of these cities are filled with people who are really passionate and committed to doing something about it. And so, they want to have the ability to control that future.
And so the idea behind the podcast series is to help people to understand why, why are cities looking at doing this? What are their motivations to help them understand what’s possible from public power. There are over 2000 public utilities already, and to give them a sense of, would it really pay off, especially in the timeframe that we’re talking about with the urgency of action that many cities are feeling to move to renewable energy? So, really just giving people a sense of context for this in light of these very significant commitments by communities across the country that are looking to do more around clean energy and to address climate change.
Reggie Rucker:
So can you tell us a little bit about how you’re going to break up the series. What are the different stories you’re going to be telling? Who are some of the people you’re going to be talking to? Can you, yeah, give us a little bit of insight into what people have to look forward to?
John Farrell:
Yeah. The first episode is really one of my favorites because what we’re doing is we’re pulling from interviews I’ve done with six different community leaders from across the country, from cities that were looking at this idea of public power. And what was exciting about it was to get a chance to get a flavor for what was it that motivated them and to sort of see the commonalities between them. It wasn’t just about renewable energy. A lot of times, it was about making energy more affordable, or they were trying to address issues of energy equity within their community, or they had issues with reliability. One of the interviewees described their issue as the blinking clock problem, that the power was going out so frequently, people were having to always reset their clocks to the correct time.
Like I said, I’m really excited about this first episode because it helps give a sense of the wide variety of communities that are really thinking about this and considering it. And then we’ve got interviews with folks like Ursula Shriver she’s with the American Public Power Association. They’re the trade organization of municipal utilities. So, they provide like technical support and services to that group. So she really just gives a really nice broad overview of, what is public power? She even talks about in the interview, I didn’t know that there were different kinds of utilities, when I first started at this job. And a lot of Americans don’t either, don’t realize that if I live in Austin, Texas, the company I pay my electric bill to is actually owned by the city, or in San Antonio, Texas, or in Sacramento, California. There’s, and like I said, over 2,000 cities.
We’re also going to talk with an attorney, John Coyle. He has represented cities that have gone through this public power process that have tried to do the takeover. He’s given really good advice. He has four key ingredients, he calls it, to how communities can be successful in their public power takeover. And so, we talk with him and he kind of runs through those and explains, if you don’t have these things, if you don’t have the political will and the willingness to make financial investment, it’s not going to be possible. I can’t give away all four of the things.
The sort of second half of the series is actually going to be focused on what happens if you win. So in communities that have public power that have cared about renewable energy, what have they managed to accomplish? But it’s also going to look at this question of, what if you lose or what if you fail? I’ve sometimes described this of what you can win when you fail, because the truth is, that even in going through this process of pursuing public power, a lot of communities have actually gotten something very substantive. Whether it’s leverage and negotiations with their incumbent utility company that’s going to do something different, or other ways that it has benefited them in terms of organizing the community around the idea of needing to address these issues of energy.
And then we are going to hopefully wrap up the series then, looking at, what are the alternatives? What other ways do cities have they can leverage their power to address things around climate and clean energy and local economic development and racial equity, all of these things? How all these things tie together, because honestly, this road is really challenging. It’s really hard for cities to go through with the public power takeover. Boulder, Colorado famously was at it for a decade and didn’t complete the process. But there’s some really great stories from them and from other communities about what they can do instead.
Luke Gannon:
John, you mentioned this attorney, John Coyle, who has four of those key ingredients. So, I’m curious about if you can at least talk about maybe one of the key ingredients and the other key takeaways that you want your listeners to get from this series.
John Farrell:
One of the first things that he mentions that is so crucial is, having your own data about what’s possible. And he talks about… I can’t remember. He has a clever name for these four ingredients, so they actually sound like ingredients. There’s the sauce and the spread or something like that. I wish I could remember them. Now, you’re just going to have to come tune in to that episode to hear those.
Reggie Rucker:
Love it. Love the teases. You are a pro at this. You are a pro at this.
John Farrell:
It would be more of a tease if I actually did and was withholding. It’s just me, honestly having trouble remembering. But what he talks about is, and I think it’s so crucial here for cities to understand is that a utility company is providing service. Right? And the cities are interested in public power because they’re saying something about what the utility is providing is not good enough.
So I remember when I first read the feasibility study that was done in Boulder, what they wanted to look at is, “Okay. So if we owned the utility, if we could change where the energy came from, what difference would it make? Could we actually do it? Can we physically make the changes and build the infrastructure we want, the wind turbines and solar panels and batteries? How much would it cost? Would it be as reliable as the electric service we have now? If it’s reliable, will it be more reliable?” And try to answer those questions.
And what I have found almost universally, is that every single feasibility study a city has done has said, “Yes”, to almost all of those things. Yes, we can get more renewable energy than the utility is planning to provide. Yes, we can do it and it will actually cost less. Yes, we can do it and it will be just as reliable as the electricity service that we already have. And it will have all these other benefits.
One of the things that Ursula described when we were talking about public power, is this idea of local accountability, that you could just… She even mentioned this general manager of the Burlington, Vermont electric utility, having a conversation with a customer in the grocery store. Right? They shop at the same grocery store. He’s right there. The person who runs your utility. You’re not going to run into the CEO of Exelon or Xcel Energy or PG&E in your local grocery store. They’re not accessible to you in that way.
But these local folks are, and that really is, I think, one of the key elements that cities are looking for too. I’ve certainly heard it from all of these folks in our earlier episodes, the things that they care about. So anyway, that feasibility study, I think, is so important, because it really helps to describe for the community why this could pay off, why it’s worth the political investment, the financial investment, the time commitment in order to consider it.
Reggie Rucker:
So when we create this podcast, we have a list of questions that we’re going to ask our guests and we think we’re going to get through all the questions, they’re going to answer them. John is so amazing. He has answered everything succinctly in 10 minutes. And so now, we just kind of have to start making up questions and see where we go from here. So, yeah. Good luck with the unscripted questions, John. Here we go.
It’s actually, no. One of the things that does come to mind for me is, I’ve heard about… Whether it’s the person in the grocery store or sort of the general citizen in the grocery store, the utilities sort of person in the grocery store, there are different audiences who might all be able to take away something from this series. And so the question is, can you identify somebody, some sort of set of people, who’s going to get the most from this? Who should really be tuning in and making sure that they take away the lessons that are going to be given throughout this series?
John Farrell:
That’s a great question. I think there are a lot of different people who would really benefit from this. One of the sort of most significant groups I’m thinking of are people who are advocates around climate and clean energy, or their advocates for energy, justice and energy affordability. And they feel frustrated by the way that the system currently works and they want to know, what is it that we can do differently? I can’t get traction at the legislature. I can’t get traction from our public utilities commission. These are big, complex bodies. I know I have to have a lobbyist or I have to have a lawyer or an attorney to help me.
And what’s amazing, and I think what’s so important about the idea of public power, is that it localizes the decision making. This is one of those key benefits that we’re going to talk about in this series about what you win if you fail, which is, you get all of a sudden engagement from your local elected officials who are really accountable and close to you. A couple phone calls to a city council member is all it takes to get them to pay attention to an issue. So if we can get cities passionate about renewable energy and caring about renewable energy to address the needs of the community, all of a sudden, we have folks that it’s a lot easier to work with.
And there are fewer lobbyists at that level. There are fewer big corporations making donations to municipal campaigns, that kind of thing. It’s just much more accessible and democratic. So, I think for people who have really wanted to see change in the system in ways that relate to energy, this is an important series to understand how this is such a crucial tool for leverage in a system that is normally very resistant to change. That public power has been… There’s a great speech, actually, that John Coyle references in our interview from Franklin Roosevelt. It was in 1932, he was running for president in the midst of The Great Depression.
The Great Depression, by the way, which was actually new to me and the past year learning this, was in many ways actually triggered by electric utility monopolies going and messing around in other industries. And people invested in them thinking these were very safe investments. A lot of Americans sort of first tried putting money in the stock market by buying utility stocks. And it was like a house of cards and it all collapsed in 1929.
Reggie Rucker:
Wow. Wow.
John Farrell:
So what Roosevelt talks about in his Portland speech is how important it is to maintain this power of local control, this accountability tool. He actually calls it famously, the Birch Rod in the Cupboard, that you can use to discipline a private company that is acting out of hand. So I mean, I think that anybody who cares about these issues of clean energy, of climate change, of local economic development in the energy sector of competition, this is such an important piece to it.
A second audience I think is really crucial is, city leaders themselves. City council members will run on issues of climate. Mayors have famously made climate commitments. Sustainability offices are often trying to figure out, how do we actually meet our climate action goals? This is a really powerful tool. You do have to be willing to put yourself out there to stand up to this big utility. But it also is because it’s a place where the city has actual leverage and actual power to threaten a takeover of the utility, that you can actually get some movement in a way that just begging or pleading a utility to change its behavior is not very successful.
The last audience that I would just mention is, I think it’s really important for energy system regulators. So, these are often folks at the state level, public utilities or public service commissioners are pointed by governors. Some of them are directly elected. But also state legislatures. Our energy system is mostly made up of utilities that have a monopoly, a publicly granted monopoly. And what this also highlights in this conversation is, what an incredibly valuable resource that we have given these private companies is, we have given them this public trust to say, “You will not be shielded from competition.”, in the most fundamentally anti-American idea of, you will be shielded from competition to provide an essential service, the electricity or gas, or what have you.
And it’s so, so important that legislators and commissioners understand that communities need as much leverage as possible to hold these utilities accountable, because it does not always happen from the legislature. And it does not always happen at the commission. We need as many different levers as we have to make sure that these companies are adhering to that public interest, and that they’re living up to that sacred trust that they’ve been given.
Reggie Rucker:
We will be right back after a very short break.
As an organization seeking the end of corporate control and local communities, you’ll understand why our commercial break sounds a little different. There’s no corporation selling you something in an ad, just me thanking you for listening to our show. And if you’re enjoying this episode, which if you’ve made it this far, I’m assuming you are, I hope you’ll consider heading over to archive.ilsr.org/donate to help support our work.
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Luke Gannon:
I’m really interested in this idea of, what can you win if you fail. And I would be curious if you could ground us in a specific example of a city that has failed, and what did they learn? What did they win from their failure? And maybe you mentioned Boulder, Colorado. You could tell us, I don’t know if Boulder, Colorado is going to be a part of the series, but tell us a little bit more about that within the context of a specific city.
John Farrell:
Yeah, I’d be happy to. I can certainly talk about Boulder as well, but they get a lot of attention because they were sort of the most famous ones. So, I’m going to actually talk about Minneapolis instead, which is my hometown. So, I was actually more involved and ILSR was more involved in that specific case.
So to tell this story, I’ll just sort of go back and tell a little of the history. So in about 2012, a number of climate and clean energy folks got together and were just talking about, “How do we get cities to do more around clean energy?” They have these climate action plans that they’ve approved, but the climate action plans kind of look like two paragraphs of some really great things the city can do. And then a lot of blank pages, ultimately about, how do we fill in the rest of what needs to actually happen? And I don’t mean that as a critique of city folk who are doing the best they can with the powers they have. But there was a lot of hand waving and hope involved in these climate action plans.
So we were doing some homework about the idea of municipalization, and one of the things that we discovered was this idea of the franchise. So I mentioned just in that previous question, this idea of a public trust of a monopoly. So in the early days of the electricity system, cities were the ones who decided who their electric utility was. It wasn’t done at the state level. And they would do what’s called, a franchise. And this is actually common… This is common language in terms of cable companies used to have a franchise for a monopoly, a utility company would have a franchise. It’s basically a grant to use the public property. So the polls and wires for an electric system need to be installed on public property, the franchise gives the utility that exclusive right to do that.
Well, these franchise agreements in most places around the country, come due every 20 or 30 years. So, they’re not perpetual. In fact, they were intended not to be because the idea was, you want to be able to hold this utility accountable, so it needs to renew every once in a while. And we found out that Minneapolis had their franchise contracts with their two energy utilities coming due in 2013. 2013 was also a municipal election year, and so it was this great dovetailing of, “Hey, here’s a crucial decision point in terms of your city’s goals around clean energy. It’s also a municipal election year. We can talk to people and we can ask them, ‘Hey, if you care about climate and clean energy, what do you think about the franchise? Do you think the utilities are doing enough? Do you think the city should be asking more from them?’”
So without getting too much into the weeds of what happened during that campaign, ultimately the city council was discussing whether or not to put municipalization on the ballot during the campaign. The utilities came and basically begged them, “Please don’t do that. We’ll help you instead.” And so what came out of that instead, was an agreement to have what was called, a clean energy partnership. So utility would send some of its executives to meetings with leaders from the city, so city council and the mayor, every quarter, and come up with collaborative plans that would be used to meet the city’s climate goals that were articulated in its climate and energy vision. So included putting more solar on rooftops, doing more energy efficiency, helping the low income folks finance clean energy projects, all sorts of things like that.
And the best part of it, was that there was a 15 member community advisory committee that would also meet quarterly, and that would provide advice to the city and to the partners and feedback and critiques of what they were planning. And so, we didn’t get a publicly owned utility. We didn’t even get it on the ballot in Minneapolis. But what we did get is this system of requiring the utility to come participate at the local level, and have local conversations about what the needs were from the city. Probably the biggest transformation, honestly, isn’t in what the utilities are doing, but it’s in how the city is thinking about it. So, the city has become much more skeptical of whether or not the utilities are actually living up to their promises in part because they can now see firsthand, “We’ve asked you to do this, are you doing it?”
The city hired someone, for example, to represent them before the state Public Utilities Commission. So most cities don’t bother to send somebody there, where they regulate state energy utilities. But Minneapolis has someone who works full time on checking in on, “Hey, are our goals as a city that the utility has promised us that they’ve agreed to help us with, are those showing up in the utility plans that they tell those state regulators or not?” And sometimes the answer is, “No, they’re not showing up there.” And so the city’s able to say, ‘Hey, Xcel Energy, you’ve promised us that you will be able to deliver us 80% carbon-free electricity by this state. But interestingly in your resource plan before the commission, that’s not what it says. So how are you going to reconcile those two things?”So, it’s been really interesting to see the way in which it allows the city to think more intentionally about what power it has and where it can intervene.
And there have been some interesting kind of collaborative projects that have come out of the conversation with utilities. I wouldn’t say that it’s been as bad as one politician described it as a quarterly coffee klatch. But it hasn’t really been transformational, I think, in the way that people hoped. But the transformational part is in getting to have the decisions at the city level.
And now back to that idea of the franchise, so as I said, it was coming due in 2013. The city signed a new franchise agreement in 2013 with both of the utilities, but for only 10 years this time, instead of for 20. And it even had an opt out option after five years. And so, those contracts are going to come do again next year. And the city now has 10 years of evidence of its working with the utilities to be able to say, “Should we keep this franchise or not?” And I think that’s something really powerful that the city now has, is that it created this body of evidence and experience in working with these utilities that can inform them making that decision, so that it’s not something that…
And honestly in most cities, you will be hard pressed to find an elected official that has even heard of the franchise contract. It is one of those things that it’s like it’s in the city coordinator’s office, it’s in the city’s attorney’s office, someone from the utility calls up and is like, “Hey, this thing’s due in three months. Can we just get you to re-up it?” And they just print off a new copy, change the date, and sign it.
So making that into something that you can leverage as a city to change this conversation, what Minneapolis has been able to do with it is really important. And we have other podcasts actually on, on our Local Energy Rules podcast that I’ve done with the city of Minneapolis, where they talk about some of those things. And it will be included as well, in some of this series around what are some of the alternatives or what happens when you quote, unquote fail.
Reggie Rucker:
That’s really awesome. And yeah, just the story about what the city hasn’t learned and has been able to sort of adopt and the power they’ve been able to flex over these utilities. And then also what I’m hearing too, is this idea that the folks like you, the advocates on the ground who are really a part of pushing the city in this direction, you all have a base of understanding and knowledge of sort of the pressure points. And so, you’re able to… You’ve flexed that power before and now you know how to go back to it next year in 2023, and sort of come back to that playbook. So yeah, that’s really exciting.
I think one of the things that I want to follow up on is, there are inevitably…. And you’ve touched on the moments when things get hard or they’re not going your way. What is your council to advocates or city leaders when they run into these roadblocks? What does the encouragement to not just give up and say, “Okay, the big guys win again, the monopolies win again. They have all the power and influence.”? How do you encourage people to sort of push through that [inaudible]?
John Farrell:
I am going to answer that question, but I also just want to say, Luke, you’re right. He is really good at summarizing what people say.
Reggie Rucker:
[inaudible].
John Farrell:
Or your mom is right.
Reggie Rucker:
I try to listen. I try to listen when smart people are telling me things.
John Farrell:
That’s great. Yeah, as far as pushing through, I mean, we did have this moment in Minneapolis. I do remember the day that city council failed to vote to put municipalization on the ballot. We sat down as a team that had been working on this as a coalition and we kind of looked at each other and we’re like, “Did we just lose? Is it over?” And we knew that this partnership idea was on the table. We were very skeptical that it was going to pan out to mean very much.
But I think it was really important at that point to say to ourselves, “Look, we have accomplished something. We have seven city council members that were really bought into the idea we should do this. It wasn’t enough to win, but that’s more than half of the city council. We have the evidence of the way that the utilities have played in this process. That means that people are more educated.” So I don’t know if this is exactly what you meant, but either way, I think of it sometimes, it’s sort of like exercising or training. Right? We are getting these muscles that we’ve almost never used before. And we are using them in a way that we had not considered using them before.
And sometimes building that muscle, you go out and you run a race or you do a competition and you lose. But it’s not like you’ve lost all of the things that you gained in doing it. So I think remembering too, that you’re getting something out of that, even if it’s just the next time we want to fight, I’ve got some friends that I’ve talked to before and we know how to do this.
And then in the end in Minneapolis and in a lot of other places, you do actually get something meaningful, right? We have this clean energy partnership and once it was formed and we got this community advisory committee, numerous people from our coalition campaign were appointed to the advisory committee. And so, we were able to continue pushing in there to help set the stage for how the city would react with the utilities to help make sure that the goals of the partnership would be very ambitious, and that they would actually move the needle beyond what the utilities were normally going to do. And also to hold them accountable by saying, “In those meetings, you promised to do this stuff and you didn’t.” Or, “Hey, it’s great that you’ve done all this partnership stuff. But when we look at the measure of whether or not we’re actually going to succeed at the goals that have been outlined by the city that you all agreed you were going to do, you’re going to fail. So it doesn’t matter how successful you’ve been at working together if the ultimate outcome is failure.”
So I all I’m saying there, I think, is specifically around the partnership, that opportunity of local accountability and like building that muscle flexing. And some of the things that the city has managed to do, both… They have this amazing green cost share program where they’ve leveraged a little bit of public money to give grants and loans to low income folks, to small businesses, to help them make investments in clean energy.
And there’s this amazing dashboard that the city’s health department director shares at some of our meetings where he costs through like, “We spent like $10,000 and we’ve leveraged a million dollars in energy savings.” So things like that the city wouldn’t have really considered even doing, certainly not at that scale, until we had had this fight. And we had lost, if you will, but we still got something great out of it. And so I guess I would say to your point of what I would say to advocates is, don’t take no for an answer. Just because what happened didn’t turn out the way that you expect, it doesn’t mean that you haven’t still taken a step in the right direction.
Luke Gannon:
Yeah. So John, on that point, I think Minneapolis is a really illustrative example of what cities can do. So, I’m thinking about how messages move across state borders. And if other cities have looked at Minneapolis and has taken things that have worked to implement in their own city. So I’m curious if there’s… where the crossover is from across states, and how other communities and cities have implemented. Oh, like, “Okay, this state is doing something that we might want to do.” If that has happened or what that looks like.
John Farrell:
Yeah. One of the things I’m really struck by, and that is always very gratifying, is that we get people from different communities reaching out to us because of the stories that we’ve told, the podcast, Local Energy Rules that tell some of these stories and the things that we publish about this. And I just got to call recently from a fellow who is working on the Gulf side of Florida in St. Petersburg and a few other cities there. And essentially, that is the question, is that they’ve seen what has happened in other communities. They’ve seen some of these other stories and they’re saying, “How do we move from, we have these good plans, to implementation? What can we learn from what these other communities have done? What can we import in terms of the opportunities to do things?”
And I think one of the things that is really important to understand, is that the strategies that you’re going to apply in your community are going to differ from what is tried other places, because you may have different opportunities. I remember interviewing Mayor Gamba from Milwaukie, Oregon. Which first of all, I always just enjoy because I didn’t know there was another Milwaukie anywhere in the country. It’s not spelled the same either, for people who are curious. It’s a suburb of Portland. But one of the things that they had an opportunity to do is that the utility there basically said, “We would be willing to offer you a product that essentially gives all of the customers in the city, a hundred percent renewable electricity. It might not be free, it might be at a slight premium. But we are willing to do that through our business model, to just come up with a way to charge everyone in the city. And you can opt in as a city and we’ll do it for everybody.”
I mean, most utilities have not been interested in playing ball. And so, it was interesting that Portland General Electric was. And it’s an important lesson, I think, for how this can play out. Most of the cities that I’ve talked to, they have to do some fighting with the utility to get stuff to happen. But you never know, you might have a relationship already with someone there, someone on city council who used to work at the utility, a utility that’s all of a sudden thinking a little creatively. Maybe they’ve got a new incentive from the state regulators or from the state legislature to work with cities or to specifically advance local clean energy. Maybe there’s an opportunity there. And if they can make a little money doing it too, and it’s not terribly expensive, maybe there’s a way to get a compromise out of that.
So, I think that’s one of the lessons that we try to share, is that there’s this menu of things that are out there. And in fact, actually, we put them together in terms of a interactive project on our website called, The Community Power Toolkit. And the idea was, let’s let people see what that menu of options looks like. Give them some stories of how it’s been tried in different places. Push them and let them see the podcast conversations we’ve had with people, if they want kind of more context for how that stuff happened. But also to help them understand, there’s no one way to do this. I wouldn’t say every city should have a public power campaign and try to pick a fight with the utility. It just may not be very practical.
You might have a city, for example, that runs a water utility or a garbage utility and does a terrible job. That’s going to be really hard to pitch like, “Let’s take over the electric utility. You’ll get service as good as our trash service.” Right? If it’s been bad, then it’s going to be a real hard sell.
Fortunately, the converse is true for what it’s worth. Most cities that are going to go try to operate on electric utility already operate other utilities and do it very well. In fact, in Winter Park, Florida, the interview I have with Randy Knight as part of this series, that’s what he talks about, is one of the ways they pitched this, was to say, “We already run a water utility.” He’s like… And I love this too. He was specifically saying, trying to address the utility myth, essentially, that cities couldn’t do this. And he is like, “I don’t know how to run a water utility, but I know how to hire a water utility director. I don’t know how to… I’m not a police officer, but I can hire a police chief. As a city manager, I can do the things, I can find the talented people that can run the things. I don’t have to know how to do all of it myself.”
And the utilities sort of make this out to be like, “This thing is so complex and technical. Nobody could possibly do it.” And it’s like, “Yeah, but where do you hire your people?” Right?
Reggie Rucker:
Right, exactly. Yeah.
John Farrell:
They’re out there. So anyway, I think cities have a lot more capabilities than they give themselves credit for. And they’re going to just have to explore, what are the advantages we already have in our community? How can we leverage those? And how can we learn from what other cities have tried as well?
Luke Gannon:
I believe that caring about something has a ripple effect. And so I’m curious why you are so passionate and why you care about this topic, and why should we?
John Farrell:
I think it’s because I see the renewable energy transition moving from fossil fuels to wind power and solar power, is really a transformational opportunity for communities. We can generate our own electricity. We don’t have to be relying on somebody else. We can reduce pollution by doing it. We can save money by doing it. And we can cast off the shackles of monopoly power. We can basically say, “Freedom, money, clean air and water, and our own power.”, in both meanings of the term. It’s such a win, win, win all the way around.
And what is so exciting for me about it, is that there are so many fights that we have about various things in our country where people make it out to be zero sum, that if somebody’s going to win, then somebody’s going to lose. And I think the group of people that could potentially lose in this is really small. The utility shareholders, if the utility also doesn’t change to innovate to accommodate the business model. Basically if the utility refuses to play by capitalism and stick only with its idea of monopoly-protected power, that’s the only way they can lose. Otherwise, everybody’s going to win. Utilities have lots of things they can sell us to make the clean energy transformation happen.
Communities have so many ways that we can benefit, whether it’s places where people have had abnormally high energy burdens, whether it’s resilience and having cooling centers during really hot periods where people don’t have air conditioning in their homes. Creating jobs by having community-based solar installations and then choosing to hire people specifically out of that community to apprentice them and to train them and give them a good paying job and a future. I mean, all of that is possible through investments in clean energy. And what’s exciting to me, is to say… And that we can do it at community scale. We don’t have to do it a nuclear power plant where it’s tens of billions of dollars and only big capital can do it. It can be done at the scale of hundreds of dollars and thousands of dollars. So, there’s just a real opportunity to invite everybody into this and for everybody to win.
Reggie Rucker:
It sounds like you basically just outlined the concept of building local power. It’s a beautiful thing. That’s a beautiful thing.
John Farrell:
You’re welcome.
Reggie Rucker:
So, we’re going to wrap this discussion up. The question we’ve started asking all of our guests at the end of every episode, a little plug for the independent bookstores, and just a little insight into sort of you and what inspires the work that you do. So the question is, what is a book that you’ve read that has been the most influential to the way you think about the work that you’re doing?
John Farrell:
Oh, that’s such a good question. I don’t know if it is… it’s not on the same topic necessarily, but I really liked the book, The Sum of Us, by Heather McGhee. I was actually looking behind me to see if it was on my shelf, but I think I’ve lent it to somebody else because I’ve told everybody they should read it. But it gets actually at this idea I was just talking about, about why I’m passionate about the work that I’m doing, which is, her philosophy essentially, or her point in the book is essentially that this notion of a zero sum economy is usually a political tool to divide us from one another.
And she most poignantly… I mean, if you can’t have fine time to read the book, just listen to any of the podcast interviews or news interviews that she’s given, because she almost always uses this one example that I think is so powerful. But she talks about how at the time of desegregation, when communities were wrestling with the legacy of racism and integrating a number of things like parks and pools and whatever, a lot of communities, most in the south, but in other places literally filled in pools with concrete or destroyed or covered over public resources, basically to spite the idea of sharing them. And then everybody lost. Everybody loses when we do that.
These public resources, there’s a picture in her book of this almost palatial looking public pool in this Southern community. Thousands of people swimming in it. And you just think about during a heat wave, right now that kind of public resource could be so valuable. Everybody able to show up for free to use this resource. Or I’m sure if they had to pay, it would be very low cost, a place to get out of the heat, to relax a little bit. Enormous public benefits, health benefits for people, recreation benefits, cooling benefits, all of these things.
And so, I think the lesson for her book for me was, look for what the win-win is. And for anybody who talks about it as zero sum, question their assumptions and question their motives and look carefully at what it is that they’re trying to do. And I think it’s really been helpful for me looking at how utilities often respond to what we talk about, about the democratizing of energy is. They’ll say things like, “Oh, well, if wealthy white people go solar, then poor people will have to pay more for electricity.” They offer no proof for this, whatsoever. And it’s a rhetorical tool to try to divide us to say, “Oh, poor people, people who advocate for low income folks, you should oppose solar because it might, in theory, harm you.” And what you’re really doing is you’re just standing up for utility shareholders who are the ones who are going to be most protected by that, a very small subset of our population and wealthy utility management.
So, I just found the book so powerful. I think also, I mean, I can’t talk about it without also saying that it did more for me than a lot of years of public education and even college education, to understand sort of the lingering effects of racism in our economy. And how much we owe it to ourselves, no matter whether we’re working in energy or independent business or any of the other areas in which ILSR works or that people are doing great advocacy work, that we have to be thinking about that legacy and that through line. People who can afford to have solar have some wealth that probably was built up over generations by owning a home, that was an opportunity prevented for African Americans for decades by official government policies. You can’t undo that.
The racial wealth gap is because the government took action to prevent African Americans from owning homes. And it comes up even now. And so, we will solve a lot of our collective problems, if we can do things that are a benefit to everybody. And to look for those messages of zero sum and be skeptical of them because especially in clean energy, this stuff literally produces stuff that makes money. There’s an opportunity for everyone.
Luke Gannon:
I definitely second that it is an incredible book. So, a little drum roll. John, when is this series dropping? When does the first episode come out?
John Farrell:
August 17th on the Local Energy Rules podcast feed.
Luke Gannon:
Excellent.
Reggie Rucker:
Cannot wait. Looking forward to that. This was a great discussion. Thank you so much, John.
John Farrell:
Oh, yeah. Thank you. It’s just great to be able to talk about this and give people a sense of what’s coming.
Luke Gannon:
Yeah. Thank you, John. I feel so grateful to be a Building Local Power co-host, to be on these episodes with these amazing people who I just get to ask questions too and learn so much from, so super appreciate you coming on.
Reggie Rucker:
[inaudible]
John Farrell:
Wait, you’re saying that was me? I thought you’re talking about the other guests that you have.
Reggie Rucker:
I am seriously fired up. It’s like when Obama used to be rallying, you could do the, fired up, ready to go. You have me fired up and ready to go.
Luke Gannon:
Yes. Yes.
Reggie Rucker:
[inaudible]. So, no. This is really cool.
Thank you for tuning in to this episode of the Building Local Power podcast from the Institute for Local Self-Reliance. You can find links to everything discussed today by going to archive.ilsr.org and clicking on the show page for this episode. That is archive.ilsr.org.
Luke Gannon:
While you are at archive.ilsr.org, you can sign up for one of our many newsletters and connect with us on social media. All of your reviews, likes, and donations help produce this very podcast, and support the research and resources that we make available for free on our website. This show is produced by my exceptional colleague, Reggie Rucker and me, Luke Gannon. This podcast is edited by Drew Birschbach. Our theme music is Funk Interlude by Dysfunctional.
But before we end, remember that the Public in Perils of Public Owned Power drops August 17th. Mark your calendars and tune in to Local Energy Rules. This is Building Local Power.

Like this episode? Please help us reach a wider audience by rating Building Local Power on Apple Podcasts or wherever you find your podcasts. And please become a subscriber! If you missed our previous episodes make sure to bookmark our Building Local Power Podcast Homepage.
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Audio Credit: Funk Interlude by Dysfunction_AL Ft: Fourstones – Scomber (Bonus Track). Copyright 2016 Licensed under a Creative Commons Attribution Noncommercial (3.0) license.
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42 min
July 14, 2022A Movement to Rectify Digital Inequities
What does it really mean when people talk about the digital divide? And what power do communities have that find themselves on the wrong side of that divide? Shayna Englin is our guest on this episode of Building Local Power discussing how she approaches these issues as director of the Digital Equity Initiative at the California Community Foundation. Joining Shayna in this episode is ILSR Community Broadband Outreach Team Lead DeAnne Cuellar. Shayna and DeAnne discuss how the digital divide is not isolated as an issue of broadband access, but tied to housing justice, healthcare access, immigration policies, and education. As the pandemic moved everything online, they explained, the whole country experienced how fundamental internet connectivity is to the entire human experience.
Highlights include:
How the California Community Foundation is using a systems change approach to creating digital equity.
Giving decision-makers access to accurate information to invest in local communities.
The funding sources and policies that are expanding opportunities for municipalities to come up with local solutions.
Creating power and policy frameworks to mobilize communities.

“The digital divide is the gap in access to what is a modern utility. Whether it’s access in terms of a subscription or access in terms of devices or access in terms of having apps and utilities, especially from the public sector that are user friendly and meet the needs of the communities they are intended to serve.” – Shayna Englin
“The early numbers that came back from the pandemic was that 80% of people over 60 years old were the people who were dying from COVID. 42% of that population didn’t have access to the internet. So that’s why we talk about the digital divide as a social determinant of health, it’s a life or death issue.” – DeAnne Cuellar

Related Resources
California Community Foundation Digital Equity Initiative: https://www.calfund.org/digital-equity-initiative/
Community Networks (ILSR’s Community Broadband Networks Initiative): https://muninetworks.org/
Transcript
Reggie Rucker:
Hello, and welcome to Building Local Power, a podcast dedicated to thought provoking conversations about how we can challenge corporate monopolies and expand the power of people to shape their own future. For more than 45 years, the Institute for Local Self-Reliance or ILSR has worked to build thriving, equitable communities where power, wealth, and accountability remain in local hands. My name is Reggie Rucker and I am the new communications director at ILSR and co-host for Building Local Power.
Luke Gannon:
And I am Luke Gannon, the other co-host. I am a communications and research associate at ILSR. Today on the podcast I’m welcoming my colleague, DeAnne Cuellar, who works on the outreach team for our community broadband initiative here at the Institute for Local Self-Reliance. Along with DeAnne, I am eager to invite Shayna Englin, the director of the California community foundation, digital equity initiative. The digital equity initiative is a multi-year project that will activate a digital equity movement in Los Angeles county. With the power and capacity to successfully advocate for fast, reliable, and affordable broadband for all people living in Los Angeles. Welcome DeAnne and Shayna.
DeAnne:
Hello. Thanks for having me.
Shayna Englin:
Thank you.
Luke Gannon:
Of course. So, let’s get started for all of our dedicated listeners and new listeners on Building Local Power. We are going to break these difficult topics down, like broadband. So today we are talking about the digital divide and the intricacies that fall under that umbrella. So Shayna, I’m going to start with you, and ask what is the digital divide?
Shayna Englin:
I love that question because we throw that term around a lot. I don’t think we ever do a great job at articulating it. So I’ll say from the perspective of CCF and the work that we are doing, the digital divide is the gap in access to what is a modern utility. So, all and everything that means. So whether it’s access in terms of a subscription or access in terms of devices and the know how needed to get there or access in terms of having apps and utilities and things, especially from the public sector that are user friendly and meet the needs of the communities they are intended to serve.
Luke Gannon:
Thank you for that. And on that same question, how does this digital divide play out in LA counties, specifically?
Shayna Englin:
Well, it plays out in LA county in basically every way it plays out anywhere else, because LA county is massive. And I have found myself starting with this explanation, because it still kind of blows my mind, but think of LA county as you might a state or even a country. LA county is 10 million people big. We have 88 independent cities within the county. And that’s 65% of the county is unincorporated. We have four plus school districts. We, through two major ports, we have more than 50% of the goods and services that go in and out of this country, the other countries go through LA. So it is massive. So when you ask how it plays out in LA, we have rural areas where it looks like there’s literally no infrastructure whatsoever.
Shayna Englin:
We have suburban areas where there are big donut holes in service or areas that have been upgraded. And those that have not, we have quite a bit of obviously urban communities that have been suffering from lack of investment in upgraded infrastructure. And lots of them are still working with DSL or wireless only, or in some cases, nothing. So the digital divide plays out anywhere, you’ve seen it anywhere in the country. It’s playing out somewhere in LA county.
Reggie Rucker:
Actually, Shayna, can I ask you when you mention unincorporated areas. So, I’m originally from Modesto, California, and one of the big issues there is, right across the street from one house, one set of neighbors that is incorporated and they have all these utilities and resources literally right across the street. They don’t have any of that because they’re not part of the same city or municipality. Can you talk a little bit about how those unincorporated areas have less access to some of these things. Even, again, even being neighbors to somebody just right across the street who does, and it’s just, it feels like a very odd but clear example of this divide.
Shayna Englin:
Sure. So, it’s complicated, as you mentioned. And particularly with the broadband issue, it actually should be quite a bit less complicated than it is. Because we have a statewide video franchising [inaudible 00:04:48]. DeAnne is probably very tired of hearing me say the word DIVCA, but I’m going to a few more times. We have a unlike about half the states in the country, we have a single state franchising authority that essentially gives permission to cable companies to operate within given service areas. And that, theoretically, there is service within the entirety of the service area that company has a franchise for. And that does that crosses because it’s a single state entity, it crosses all of those kind of county and other municipal lines.
Shayna Englin:
So that said, it should not be a jurisdictional problem. It is. Because what you don’t have in any of those franchising laws is equal access requirements. You don’t have anti-discrimination or at least enforceable anti-discrimination requirements. So you do still end up with that my house has, DOCSIS 2.1 or the very old cable infrastructure and my across the street neighbors have a much better, more recently upgraded infrastructure that still happens. But it’s less a function of jurisdictional boundaries and more a function of what the monopoly cable companies have decided is in their ROI.
Reggie Rucker:
That’s so interesting. And then DeAnne, I was going to bring you in, like Shayna talked about how LA is a nation of its own and has all of these types of digital divides. Can you talk a little bit about the work that ILSR has been doing in other parts of the country that sort of reflect some of these maybe same issues?
DeAnne:
I think one way to talk about the work that we’re doing at ILSR is at this time, which is a once in a… We say once in a lifetime opportunity for local communities that are working on digital divide is that we’re playing a critical role in making sure that regardless of where you live in an urban or rural community, that if there are resources that you need access to and they’re not available, we’re co-designing and working on access to those resources directly with communities. So we’re playing a role in making sure that how communities can leverage the state and federal funding, that information is making its way to decision makers. And if there isn’t staff available in local communities, then we’re working with people directly in those local communities to make sure that they know how to demystify and explain what the funding means. Because there’s, I think if I’m not mistaken, there’s over 80 programs spread out throughout the federal government that have been earmarked to pose a digital divide.
DeAnne:
And that’s a lot for any community, even a really large urban community to keep track of regardless of how big they are. So from LA county all the way over to Baltimore, New York city, ILSR is working directly to make sure that information gets to decision makers.
Reggie Rucker:
That’s great.
Luke Gannon:
I am going to pivot a little bit to a topic that has been on all of our minds for the last couple years, which is COVID. So COVID has really revealed the harsh inequities that exist in our society and specifically in the context of internet accessibility. So I am curious what sort of disparities were revealed from your vantage point in Los Angeles as a result of everyone having to figure out remote life starting in 2020?
DeAnne:
Well, I think what became really clear was that the digital divide is actually not an issue by itself, right? It doesn’t the way that the California community foundation got engaged on this issue was actually through listening to our grantees and thinking through kind of crisis response across our core program areas, which are housing, healthcare, immigration, and civic education. We do quite a bit of work around kind of voter registration and things, integrating new Americans, that kind of thing. And so in doing kind, listening across all of our partners in all of those core areas, and again, thinking about how we could support crisis response. What emerged was very rarely the actual term digital divide.
DeAnne:
But we all know about kind of all the challenges with education, but in also talking to the community clinics, our partners there, and we were saying, “What can we help? What can we fund, what do you need in order to meet this moment?” And they’re saying, “Everything is moving online from COVID testing appointments and then COVID vaccine appointments to just like we can’t open our doors. And so we need to be finding people virtually and we’re losing our patients. Literally we can’t find them, or they’re not showing up for appointments because they don’t have connectivity.” Or on the immigration side, immigration attorneys would say, “I have clients who are getting deported because they failed to show on a required hearing.” Well, the hearing was online and they did not have access to broadband signal strong enough in order to join. And so it was those kinds of experiences and really across the board, what we were hearing from partners who were doing that work on the ground, that kind of elevated it as, oh, this is in fact a systemic problem and not kind of a standalone issue.
DeAnne:
So when we understood it that way, it really helped us think about what the response might look like and how we might engage and do kind of funding and campaign building and movement building to meet that challenge.
Luke Gannon:
Yeah. That’s really interesting. So Shayna, do you feel like the intersectionality of those issues helped broaden a wider awareness for broadband specifically, or I guess build that movement more?
Shayna Englin:
It certainly has been instrumental in how we’ve approached seating and supporting this movement. I think it’s notable that with across at least our kind of funded cohort coalition members. So we made our first grants almost exactly a year ago. It was June 15th where our first grants is part of the initiative. We are now at 42. So a year later, and then other coalition members that are not funded that kind of already doing this work or were funded elsewhere to have the capacity to engage it. Of that entire 40 plus member organizations, I think three are specifically digital equity digital divide organizations. We’ve really deliberately built a digital equity movement that ties into the power building, the service delivery, the storytelling, the lived experience, across all of these issues so that it could be a stronger, more durable movement.
Reggie Rucker:
And then actually, yeah, let me follow up on that point. You mentioned the granting that you do and then sort of the different ways in which you help the power building, storytelling. How do you, I guess maybe starting with the basic question of like, what types of initiatives programs do you grant? Just what does that granting look like? And then sort of maybe from there, telling us a little bit about how narrative and power building, and just how that looks in your work.
Shayna Englin:
Sure. So our grant making program and actually everything that we’re doing crosses four core strategies that we identified a little more than a year ago now. That I think still seem like the right ones, although DeAnne has a good vantage point, I’d love to hear her input on this. But our, the four kind of key pieces are one is that narrative. And we need to do some narrative shift, which I’d love to kind of dive into more deeply. Two, is the political and constituency building. So really that power building piece of things, three is policy change, whether that’s proactive or responsive. And then four is really translating all of that into what we call first mover projects. So how can we channel all of that and our resources and aligned resources towards actually getting things built and moved quickly while the moment is ripe.
Shayna Englin:
And so all of our grant making, our initial grants were, again, I think ILSR, and NDIA were initial grants. And of course you all are our broadband expert technical assistance for, for us as we do this work. But I think those are the only two that actually had any history in digital equity work. So our initial grants were really looking at what were the organizations that were elevating that this is an issue in part of their work. And that really was largely education organizations and healthcare organizations. And we said, if we could grant, if we could provide some resourcing, what would it look like for you to build capacity in order to be able to incorporate this piece of equity work into your larger programming? And so initially we really were just funding of capacity for folks to learn more about how they might be able to engage, to do listening and surveys of their membership and their clientele, and really kind of establish what that, what those anchor organizations could look like.
Shayna Englin:
And then as lessons learned from the first two quarterly rounds of grant making, we identified a really critical opportunity around this power building piece. So, the next set of grants were to build capacity specifically to do that power building piece, whether that was building digital equity work into existing trainings, let say parents and teachers and students. Or if it was adding the digital equity piece to an existing government relations and like public policy component, kind of all of that canvasing… One of our grantees wanted to launch a door to door and canvasing listening program to help people understand why it is that they’re paying too much for crappy internet and still not being able to connect very often. So kind of that range of things. And we really focus quite a bit of grant making there. And then we’ve also done, we did a pilot and I think we’re going to expand pretty significantly some grant making around the, on the narrative piece, which is underwriting nonprofit journalism around it.
Shayna Englin:
Because we really see that the on the media side we struggle because there is nobody on the corporate accountability beat anywhere. There’s definitely nobody on the telecom beat. And so what we see in our sort of major media. At least like looking at the LA times, and this is not entirely a knock on the LA times, but if you Google spectrum and the LA times you will see a lot of articles that look like reprinted press releases from them, and that’s a challenge. And so we are the next kind round of grant making that we’re doing is pushing hard to address that piece.
DeAnne:
And this is why I like to talk about the work that’s going on in LA county, outside of LA to the rest of the country is because you have a pre COVID list of stakeholders that were working on digital inclusion that people knew about somewhat before the pandemic.
DeAnne:
And then you had the pre COVID experience of using the internet. So, pre-COVID the stakeholders that were talked about in mainstream media, mainstream media were libraries, museums, people were that were deploying devices like hotspots and laptops and the stories we’re getting out there. And those are the people that got interviewed when we talked about the digital divide. And the truth is that ecosystem is much larger, which is why the makeup of the stakeholders in the coalition LA county is so important is because the people on the ground doing the work they’re providing solutions to the community don’t necessarily identify themselves as digital inclusion advocates as their number one issue, but they are they’re. They are the people working directly with communities, which is why the ecosystem is much larger than what we think of. When you think about the issue.
DeAnne:
And then the person that’s using the internet pre COVID was like, “Pre-COVID. We would go to work and come home. We had a life outside the home and yes, there were some people that were isolated who had to be home, but due to the pandemic, all of a sudden, an entire country became socially isolated. And so for the first time in our lifetime, we got to see what service 24/7 looked like. As people who had to depend on it for remote education, for telemedicine and all of the day to day errands and chores that we had to do to continue life outside the pandemic. So we got to see what it was like when there were drops in service at different times of the day. And we got to see when speeds went up and down, because we were socially isolated.
DeAnne:
So now I think due to the pandemic, though, the ecosystem has expanded, super happy about that because it’s such a big issue. Now it’s in the mainstream media, but we have work to do about how it’s talked about and thanks to the fierce advocates in LA county and also in Baltimore and Detroit that we also work with. We’re now finally talking about it as a utility and a lifeline we cannot live without, not a luxury product.
Reggie Rucker:
We will be right back after a very short break as an organization seeking the end of corporate control and local communities. You’ll understand why our commercial break sounds a little different. There’s no corporation selling you something in an ad. Just me thanking you for listening to our show. And if you’re enjoying this episode, which if you made it this far, I’m assuming you are. I hope you’ll consider heading over to archive.ilsr.org/donate to help support our work, your donations, not only make this show possible, but you’re also helping support our work across all of our programs to build local power and communities across the country. So please we would be so appreciative if you could head over to archive.ilsr.org/donate to contribute today, any amount is sincerely appreciated. And if you’re looking for additional ways to support, please rate or leave a review of the show over at apple podcast or wherever you listen to your podcast. These reviews make a huge difference in helping us reach a wider audience. Okay. That’s our break. Thanks for listening. And now back to the show.
Luke Gannon:
Thank you so much, DeAnne. I have a follow up on that. I’m curious specifically related to ILSR how, as an organization, you have seized the moment, in 2020. And sort of either pivoted with research or how did you build local local power after you saw that change, after you saw that shift?
DeAnne:
Yeah, I sure. I mean, I do. I think me and Shayna both have, probably have answers about this. So the, I actually rolled off of working on all three lakes of the soul at one time. So in the middle of the pandemic, I was working on connecting older adults, making sure they had computers, making sure they had digital literacy and making sure they had connectivity. And one thing that became apparent to me was that the digital divide is the three legs of the stool, but there’s a huge component about community broadband infrastructure that doesn’t get talked about are expanded on enough. So again, I sound like a broken record. This is where I think LA county comes back in, which is the subject of the show today, is because for the most part, they’re testing out a model that goes beyond the three legs of the stool.
DeAnne:
It’s an evolution of the three legs of the stool, which is why I think we have a lot to learn about the best practices that are working out there.
Shayna Englin:
Yeah. I mean, I think I would just echo that. And I will say when we first started doing this work, we actually didn’t realize that we were doing something novel in LA county, but I think we’re really lucky. We have leadership at, in particular, the California Community Foundation that has a very systems change lens. If we work on systems change. And certainly we do sort of crisis response and support direct service, et cetera. But the lens is what are we doing about this at a systemic level? And those are the kinds of problems we like to tackle. And those are the kinds of solutions we like to support. And so, when we looked at this, it just became so clear that, and this is not a problem you’re going to hotspot your way out of.
Shayna Englin:
This is not a problem you’re going to subsidy your way out of. Even just… even if that was what you wanted to do, it became really clear that giving hotspots to all of these households and even in some cases, small businesses in these communities that were all trying to connect to like a single cell tower that is not connected to upgraded infrastructure.
Shayna Englin:
It doesn’t matter. You can have all the hotspots in the universe, there isn’t the infrastructure there to support connectivity via that hotspot. So we just saw that same thing play out again and again, I know you can yay, you get a 50 and then a $30 subsidy for really crappy service. At a certain point, making crappy service more affordable is never going to be the solution. And so from that kind of systems change lens, it just was pretty obvious pretty quickly that the opportunity and the need very much on the, what are, what is the physical, the actual system? We talk about systems change in this issues. In this issue there isn’t, and I’m looking at the system right outside my window of what that looks like. And so that just became a really clear opportunity. And then the timing ended up being really good because we came to that conclusion about three months before the conversation really blew up in terms of broadband infrastructure in recovery.
Shayna Englin:
And then also of course, in the infrastructure act. So when we started doing it and focusing in this way, we didn’t realize it was novel and it wasn’t, we weren’t trying to like any holds or do anything different. It was just looking at it almost from a, and I mean, I’m not a newbie. I’ve been working on broadband stuff off and on for 17 years. But from this kind of creating a coalition and a digital equity movement, a local based, a place based movement, we didn’t know any different, we didn’t know any better. That’s just, we started where we saw the opportunity.
Reggie Rucker:
Shayna actually wanted to come right back to you. As you’re telling sort of some of this story, there’s a thought that’s coming to me that is just, why is it that elected officials, policy makers, why do you think that the first thing they go to is let’s make this crappy service cheaper? What is it that’s sort of getting in their way of being more creative or, I mean, yeah, just why is that the first thing people turn to? I mean, and you might just be guessing, who knows? But curious if you have any thoughts on that.
Shayna Englin:
I have a sadly cynical answer.
Reggie Rucker:
We’ll take that.
Shayna Englin:
Which is one we’re trying to address. But look what we have seen everywhere we turn, is that AT&T and in Southern California, it’s Charter Spectrum, and Comcast, and Cox, and Frontier, and CCTA the California Cable Association and CTIA and USTelecom . They are juggernauts and they literally have a lobbyist either in house or contract, at least one per state legislator. Here in LA county, Charter Spectrum alone has five on staff lobbyists that they employ in the county. And also have really hefty contracts with some of the big heavy hitter lobby firms. So they are just everywhere all the time. I literally got a call yesterday to brief city council staff, LA city council staff, because they have been hounded by the Charter Spectrum lobbyist to take a meeting next week.
Shayna Englin:
And they’re like, what questions should we ask? We’ve asked around. And somebody told me to call you and just like, “Can you just write down what questions, and then we’ll circle back with you about how to think about the answers.” So I think that part of it is just that the big telcos have had a monopoly in many more ways than one, including having the ears of decision makers. And I do also think, and I, again, this, I would love to hear from DeAnne about this piece as well, but my perception of it over the last year has grown to be, a lot of the way that we’ve been focused on digital inclusion has been really heavily on two of the three legs of the stool, right? On the devices and on literacy. And that has been really pretty heavily funded from the telco.
Shayna Englin:
So it’s not for nothing. And so the kind of community understanding. The activist understanding. The connection to the kind of power and political components of all of this have been largely absent. What we’ve found are, I like to say you win some and you learn a lot. Our first, our wins from this first year have really come from just having communities show up in rooms that they have never been invited to before, or they didn’t know existed. And just, you bring five or six people who are not telco lobbyists to talk about this in ways that they’re prepared to do. And it changes things. And so I think that kind of on the policy and decision maker side, so few of them have any expertise in this issue.
Shayna Englin:
So few of them have any direct experience on this issue that when a Charter Spectrum lobbyist comes and says, “Oh, you’re right. This is a really big challenge. And here, we have a plan.” Or Verizon is like, “We can happily sell you all these hotspots, which is absolutely what happened. The legislator’s like, “Yeah, that’s it. That sounds great.” And without any sort of countervailing voice or information, that’s a decision that makes sense.
DeAnne:
Yep. And I was going to, on that note, Shayna say that when you talk to decision makers about this issue, they say, “Show me the numbers.” And so there, here are two numbers that you can, that you can use that should grab people’s attention. The early numbers that came back from the pandemic was that 80% of people over 60 years old were the people who were dying from COVID. 42% of that population didn’t have access to the internet. So that’s why we talk about the digital divide as a social determinant of health, it’s a life or death issue.
DeAnne:
So that’s important, right? But the second issue is that $8 million a week is spent in DC to lobby for telecommunication company, for telcos. So there’s how going to matrix check there’s something wrong in this system, right? So that’s why the American Association of Public Broadband was funded this year. And it’s going to give a voice to municipalities at the table. But we’ve got to make sure this information is getting to decision makers, because that’s a lot of resources to be investing to fight against local communities that are just trying to create a place where everybody can live with a high quality of life.
Shayna Englin:
DeAnne, there’s this example is just like, the thing that has been fascinating is just that really the basic information is almost always all that’s needed. I mean, we have created a bit of a stir here and across the state just pointing out and having the receipts to prove it, that Charter Spectrum charges poor communities, a lot more than they’re charging in like Palisades in Beverly Hills.
Shayna Englin:
And just like that very basic it’s a story. It’s something you can immediately understand. And like being able to put that in front of local legislators say, “Well, here’s what someone moving into Palisades gets. And here’s what someone moving into the communities that you represent get.” And there’s a lot that underlies that, but this is the outcome has been wildly effective. And not that complicated. And again, to me, just kind of evidence that it’s just, we haven’t, we’ve been trying to tackle, block and tackle in so many places that we haven’t been able to kind of be in the rooms that we should be on this. And as we are, it makes a really significant difference really quickly.
Reggie Rucker:
Yeah. It’s something I would just really love about that. You can hear the numbers about the five lobbyists for every sort of legislator or something like that. That can be intimidating and it could be kind of, oh, like, “Why should we even bother? They have all the resources, they have all the money.” But for you to pivot and be able to say alls we need is just to make sure that people have the information and if you show up your voice has influence too. And so I think, yeah, that’s just something that’s incredibly powerful. And so I’m glad you shared that. I’ve been hearing a lot recently about this idea of the only way to build power is to start exercising power. And it’s just the practice of exercising that power and it be becomes this muscle that then you can wield it just like these high paid, expensive lobbyists can. So, so glad you’re you’re doing this work, we’re doing this work, so that’s awesome.
Shayna Englin:
Amen. I love it.
Luke Gannon:
Gosh, on the other side, though, that is an insane number. $8 million I can’t get over that.
Shayna Englin:
That’s just in DC.
Reggie Rucker:
Yeah.
Shayna Englin:
It’s just in DC. It’s crazy. Yeah. It’s a… I mean, and it’s also just such an interesting indication of how lucrative, so whenever these companies start talking about, “Oh, well these regulations will put you out of business, blah, blah, blah.” It will not. You’re fine.
Luke Gannon:
Yeah. I cross my fingers every day that money won’t win in the end. So we’ll see. I’m going to pivot a little bit here and go back to you, Shayna. I’m wondering how broadband state legislation is affecting LA county.
Shayna Englin:
Oh, so in California, we’re lucky in that we start with a legislative context that’s actually pretty good for municipal broadband. We’re not one of the 18 states that bans it outright. So we start in a pretty good place. And so where we are is that last year there was a whole suite of funding and policy that went with it that expanded the eligibilities and the opportunities for localities to come up with local, public and driven solutions. There was also created a technical assistance program, which is, it’s really just money to reimburse planning, but that is limited and specifically targeted to local agencies. So, cities, counties, education agencies, co-ops and utility, public utilities, those kinds of things. And so that set that kind of combination of money and then policy and focus around it that really prioritize public and publicly driven uses of that money has made a huge difference in LA county.
Shayna Englin:
And then of course the way that it works in California and as in most states is so the governor in the legislature allocates money, there’s called a budget trailer bill that puts the broad parameters around. Here’s what this is for. And then it goes to the California public utilities commission for all the details. That’s where kind the fights on the details have been really interesting. And that, we’ve also been winning again in part to, by turning out voices that don’t usually turn out at those kinds of rulemaking proceedings, we’ve won there too. And that has been even more kind of prioritization and preference for public projects. And that is making significant difference in LA county.
Reggie Rucker:
So DeAnne, when we were talking before the show, so we were having a little bit of a conversation about how, when people hear how lucky California is, and again, as a native California, I love it. But when people talk about how lucky California is, there’s this idea that, oh, like they’re special, they do things a different way. There’s no way we could do that in our state. But you had a different lens at looking at that. Share a little bit about why, even though California is different, it’s not as different as people think. And this stuff is possible everywhere.
DeAnne:
Well, I think the first thing that comes to mind for me is that we still have a lot of work to do about stereotypes of what our communities look like. Right. I come from Texas, there’s a lot of stereotypes that come from Texas. I know one of y’all just thought about somebody in cowboy hat or a horse. Yeah okay.
Reggie Rucker:
This is true. This is true.
Shayna Englin:
The other day I heard somebody said something about California outside and you’re like, well, there’s just deserts out there. Right? And I was like, “Okay, no. Right.” But the reason why California is a great testing ground or innovation lab, or a great place to ideate, closing digital divide is because the geography of California, there’s an example of each geography out there, urban, rural in between markets, small, big, low density, high density. And so it really is… Maybe that’s why technology, Silicon valley is out there. I don’t know it’s another subject, but in it’s the say, Texas, my lid reality with policy makers in state legislature and local communities might not look like California’s, but the geographies and the challenges of what people are trying to do on the ground is really similar. So we can take the best practices and the wind from a location like the state of California, and we can adapt it to our liberality and see if we can co-design those solutions with decision makers on the make or two on the ground.
Shayna Englin:
Sorry. I also think that there’s the… I think the like, “Oh, well, there’s this special case, and that’s the, again, nowhere else can do that. I’m always a little bit perplexed by that because the ways, many of the ways that California, like, like I started with California is lucky we’re not one of 18 states that has a law against municipal broadband. That those, those 18 states where there is a law against it, like that’s not an immutable fact of feature. And in fact, last year there were five of those, five states had legislation moving to remove those barriers. Two of them it passed in. And that was with like kind of, if I have to say, weak campaigns to make that happen. So just imagine if in five more of those 18 states, we organized around a power analysis that was focused on local control and getting the state out of local communities.
Shayna Englin:
And I mean, I think there’s a lot that you could do across a whole range of politics to make lots of other places, quote unquote, lucky, in the way that California is on that particular front. It’s a matter of a policy analysis, a power analysis, and then mobilizing together around something that maybe doesn’t look immediately sexy, or maybe doesn’t have sort of an immediate ramifications, but that opens the door to a whole lot down the road.
Luke Gannon:
If you could pass on one piece of advice to digital inclusion advocates in other local communities, what would it be?
Shayna Englin:
I don’t know if I can narrow to one, can I do two? They’re related, so one is really expand how you’re thinking about what a digital equity advocate is to as, as DeAnne I think said it well, really broadened the ecosystem to people who maybe don’t think of themselves as digital equity advocates, but are education equity or housing equity or climate justice, really expand how you think about it. And then the second is within that context, ensure that you have a power analysis that you can work against. Because this, it really is. This really is a question in the end of politics and power and who’s getting it and who’s wielding it. And so if you’re building a digital inclusion coalition, without that analysis, it would be hard to move the ball forward.
Reggie Rucker:
And DeAnne did you want to take a stab at that one too?
DeAnne:
Yeah. I think the number one piece of advice that I would give to people working on this issue is that words matter. And so regardless of where you live, the one thing that I hear that comes up very often on digital divide community is that’s illegal and you cannot do it. And I think words matter because it might not be illegal everywhere you are, depending on what you’re trying to accomplish. It could just be politically challenging. It could be a policy doesn’t exist. It could be a policy needs to be reformed. It needs to be updated, but communities get shut down, especially disenfranchised vulnerable needs get shut down. So often they hear the word that’s illegal and that scares communities away from being involved. So really support those communities that are challenging these norms and be like, “Is it illegal or is it politically challenging or is it difficult? And like, how do, how do we work through that?
Reggie Rucker:
Yeah. I mean to Shayna’s point earlier, like it’s not immutable like it’s illegal now technically, but you put different words on paper and like it’s not illegal anymore. So very simple. And I guess, yeah, we can go to our final question. We like to ask this one. It’s just, yeah, it kind of gives us an interesting window into sort of like what makes you tick and then also allows us to give a little shout out to the local bookstores around the country. So what is a book that you’ve read that has been the most influential to you in the work that you’re doing?
Shayna Englin:
I’m going to age myself terribly, but I read Saul Alinsky’s Roles for Radicals, at least annually. And I have probably five or six copies because every time I move, I lose it or I’ve given it away or whatever. So plug for the last bookstore in downtown LA, they always have a few copies available.
Reggie Rucker:
Yeah. DeAnne.
DeAnne:
Yeah. I love that book for so many reasons. The book that’s really get me through for the last couple years, since it came out is The Purpose of Power by Alicia Garza who was one of the co-founders of black lives matters. And I love her approach to expanding the ecosystem, bringing people in.
Reggie Rucker:
Awesome. Well, yeah, this was a terrific conversation. Thank you both for taking a little time out and telling us about digital equity, what it is, what it isn’t. The digital divide, what it is, what it isn’t and yeah. Just how everybody needs access to these resources to this resource. And so to understand how to live in their power and to claim that power and claim their right to broadband, this was yeah. An excellent conversation to encourage people towards that route. So thanks so much.
Luke Gannon:
Yeah. Thank you both so much. And just to offer people to go to the California Community Foundation website, to learn more about the digital equity initiative. I don’t know if Shayna, if you have other places to point people towards?
Shayna Englin:
No, that’s a great place. We have a landing page with the link to a bunch of resources, including some that we developed in close partnership with ILSR and and our, have been an integral part of our work. So that’s a great place to go.
Luke Gannon:
Amazing. And then you can also visit archive.ilsr.org to find more about DeAnne and the broadband’s work. Yeah. Thank you both so much. We greatly appreciate your time and dear amazing insights.
DeAnne:
Thank you. Fun conversation.
Reggie Rucker:
Thank you for tuning in to this episode of the Building Local Power podcast from the Institute for Local Self-Reliance, you can find links to everything discussed today by going to archive.ilsr.org and clicking on the show page for this episode, that is archive.ilsr.org.
Luke Gannon:
While you are there, you can sign up for one of our many newsletters and connect with us on social media. We hope you will also take the opportunity to help us out with a gift that produces this very podcast and supports the research and resources that we make available for free on our website. Finally, we ask that you let us know how we are doing with a rating or a review on Apple podcasts or wherever you find your podcasts. This show is produced by my amazing colleague, Reggie Rucker and me Luke Gannon. This podcast is edited by Drew Birschbach. Our theme music is Funk Interlude by Dysfunction_AL. And that’s it, I hope you’ll join us again for our next episode of Building Local Power.

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Audio Credit: Funk Interlude by Dysfunction_AL Ft: Fourstones – Scomber (Bonus Track). Copyright 2016 Licensed under a Creative Commons Attribution Noncommercial (3.0) license.
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41 min
June 30, 2022How Black Gold (Composting) Combats the Climate Crisis
This episode marks a new beginning for Building Local Power – Reggie Rucker, Communications Director, and Luke Gannon, Communications and Research Associate are taking a step back to look at our work in a larger context. To kick this transition off we welcomed our colleagues from the composting team Brenda Platt, Director of the Composting for Community Initiative, and Linda Bilsens Brolis, Project Manager for the Composting team. We asked our guests how this rich organic matter, compost, is combating the climate crisis.
Highlights include:
How composting can reclaim disturbed sites.
The consequences of “waste imperialism” on social and environmental structures.
How different composting models make the practice more accessible.
The necessary paradigm shift within our consumer culture.

“Waste historically has been an environmental justice issue. We’re dumping our waste on areas of least political resistance, whether it’s the garbage barges on Haiti from the ’80s or in our urban areas where trash incinerators get built.” – Brenda Platt

“Whenever you build something you’re compressing the soil so a lot of community gardens are actually based in places where things don’t readily grow and so you need to import soil. And being able to compost locally just helps reduce input costs because you can help create something that you would otherwise have to buy to help improve your soil to grow.” – Linda Bilsens Brolis

Related Resources
ILSR infographic: Compost Combats the Climate Crisis
ILSR training: Community Composting 101 Online Certificate Course
ILSR web post: Home Composting: Its Time Has Come
ILSR report: Stop Trashing the Climate
ILSR web post: Waste Disposal Surcharges
ILSR web post: Soil Health Policies
Project Drawdown (identifies reducing & recycling food waste as a top climate solution)
Transcript
Reggie Rucker:
Hello, and welcome to Building Local Power, a podcast dedicated to thought-provoking conversations about how we can challenge corporate monopolies and expand the power of people to shape their own future. For more than 45 years, the Institute for Local Self-Reliance has worked to build thriving, equitable communities where power, wealth, and accountability remain in local hands. You might be thinking, this isn’t Jess. It’s not. Jess is now leaving communications for the Midwest Climate Adaptation Science Center, we just wanted to say, “Thank you, Jess, for your dedication and integral voice to this podcast.” My name is Reggie Rucker and I’m the new Communications Director at ILSR and co-host for Building Local Power. Now, when I say co-host, that means I have somebody else who needs to introduce themselves. Luke?
Luke Gannon:
Hi, everyone. My name is Luke Gannon and I am a Communications and Research Associate here at the Institute for Local Self-Reliance. I’m super excited to be working with Reggie to produce and co-host this podcast. And I would also like to give a shout-out to Jess who was an amazing asset to the ILSR team. Already in this last month, I have missed her immensely but the Midwest Climate Adaptation Science Center is really lucky to have her. But without further ado, we have a big topic today so let’s dive right in.
Luke Gannon:
Today on the show, we are asking our guests how is composting combating the climate crisis? Right now we are experiencing the glaring implications of climate change firsthand. Last year we saw wildfires rage across the west coast and we are starting to see it again. Warming ocean temperatures are killing off species. Just to name one recent event in the news, both Yellowstone National Park and Glacier National Park are flooding which is due to extreme weather shifts driven by climate change. So as we can see, the consequences of climate change are devastating. And in order to alter these realities, we must drastically reduce global carbon emissions, and most importantly modify our practices to be more responsive to the world around us.
Reggie Rucker:
So it’s interesting. I’m really glad we’re having this conversation today. I was doing a little bit of reading and I came across this article and it talked about what cities are doing to combat climate change. In Phoenix, in LA, in Miami-Dade County, they’ve actually established these chief heat officers. In some of these cities they’re installing cooling and misting centers, and hydration stations, planting trees for extra shade. And they’re experimenting with these sort of these quote-unquote high-tech solutions like sealants and reflective coatings for sidewalks, streets, and rooftops. And then some of them are updating their building codes with new green criteria.
Reggie Rucker:
So there are all these efforts to combat climate change, but one of the things that I didn’t really hear anything about was composting. How composting could play a role in combating the climate crisis? But that is going to change today. With us to discuss how composting can play an important role in combating the climate crisis are colleagues and esteemed composting educators, Brenda Platt, Director of the Composting for Community Initiative, and Linda Bilsens Brolis, who is the Senior Project Manager for the Neighborhood Soil Rebuilders Program. So welcome to the show, Brenda and Linda.
Brenda Platt:
Good to be here.
Linda Bilsens B…:
Thanks for having us.
Reggie Rucker:
Absolutely. So I was thinking actually, Brenda and Linda sounds like you need a buddy flick of some sort. I think a buddy composting movie would beat Spider-Man and just be a blockbuster of the summer. I’ll let you have that. I’ll let you have that if you ever want to get into a different career.
Linda Bilsens B…:
Thanks. I do take it as a compliment if I ever get called Brenda by mistake.
Reggie Rucker:
Okay.
Linda Bilsens B…:
Yes. Some of our colleagues call us the Endas.
Reggie Rucker:
I like it. I like it.
Linda Bilsens B…:
Superheroes, right?
Luke Gannon:
Awesome. Well, I’m going to dive right in with our first question. Brenda, can you tell us what is composting?
Brenda Platt:
Well, let’s start with compost. Some people they hear about compost, they think it’s soil. It’s not exactly soil. It is a soil amendment, and it’s a living soil amendment, so it’s full of beneficial microbes and it’s rich in something that we call organic matter. Many of us who work in compost we like to call it black gold. Composting, how you make compost, it’s a biological process. So if we control certain conditions in the process the materials are going to decompose quicker into that black gold.
Brenda Platt:
Just to be clear, and this is the connection to climate too is composting is an aerobic process. That means it needs oxygen to work. And when it goes anaerobic in starved oxygen conditions like you have in a landfill, then you’re producing methane, and that’s what we don’t really see in well-operated sites, we avoid methane. But in a landfill, starved oxygen conditions. When we throw our food scraps, and our yard trimmings, and other organic materials in the landfill we’re producing methane, it’s a highly potent greenhouse gas. That’s the summary. I don’t know, Linda, if you want to add to that.
Linda Bilsens B…:
I mean, I guess it leads me into composting avoids methane emissions from landfills, but it also creates a product that helps to sequester carbon. Carbon sequestration is something that people may have heard about, it sounds really fancy. But essentially, what it refers to, it has to do with carbon being an essential building block of the world that we live on and photosynthesis, which is what plants do by taking … By consuming carbon dioxide from the atmosphere so that they can grow. And in that process, they take carbon and bring it down into their roots. They bring it into their plant bodies, bring it into their roots, and then they exude these carbohydrates or sugars that attract the beneficial soil microbes. Through this process, we’re basically pumping carbon into this soil, and the healthier your soil is the more it’s able to hold onto carbon. The more carbon it’s able to hold onto and the longer it can hold onto it. That’s the simple way of thinking about it.
Luke Gannon:
Awesome. Thank you, Linda. That’s super interesting. I also didn’t know the terminology black gold for compost which I really like. I love that. So Linda, can you talk a little bit about how composting enhances soil quality? Brenda mentioned it briefly, but I want to dive a little deeper into that.
Linda Bilsens B…:
So when you think of healthy soil you might think of something dark and crumbly, smells like good healthy earth. Compost provides these things to the soil. Basically, compost is providing something called organic matter, and that allows soil to hold onto water which is great. When it rains then it can really put that water to use. If there’s lots of rain it has the ability to hold more of it, and this allows soil to combat flooding where it’s not as susceptible to flooding. And then also, if it’s able to hold onto water when things get dry, if it doesn’t get rain for a while, then it has a resource to tap from. So it’s great for both ends of the spectrum there. Basically, compost helps create a healthy living condition for all those beneficial soil microbes that Brenda and hinted at earlier. And all those microbes are basically what help plants do what they do. They help protect the plants so that they can continue to grow. I don’t know if you have anything to add, Brenda?
Brenda Platt:
It’s all about the soil when it comes to compost. I mean, if you’re producing compost one way or another, it’s going to end up back in the soil. It has so many soil benefits. In addition to adding organic matter, and helping increase the water holding capacity, enhances soil structure, it suppresses plant disease. It improves something called cation-exchange capacity, which is the ability of soil to retain nutrients, and so it helps the plants and the things we’re eating be more nutritious too. Just endless benefits to the soil. And when it comes to climate, healthy soils are increasingly recognized as one of the key tools at our disposal to combat climate disruption and climate chaos. So we need healthy soil. So much of the dialogue is focused on let’s cut greenhouse gas emissions, let’s cut fossil fuel use. All of that is really important, but we also need to create these carbon sinks and we need to build healthy soils. And compost is really going to be a key part of that.
Reggie Rucker:
I’m curious about the scale at which sort of this solution is applicable. And so I’m originally from California and I think about mudslides that’ll happen along those freeways. Is there composting that sort of could take place in areas like that, that would sort of help mitigate those types of effects? What type of environment would this solution be helpful?
Brenda Platt:
Absolutely. And the answer is yes. One of the biggest growing markets for compost is in a field called green infrastructure. So green infrastructure is things like green roofs with living plants or bioswales, which handle stormwater but they’re full of living plants or rain gardens. And on steep highway embankments that are very susceptible to the soil erosion and mudslides you mentioned, one of the best management practices for controlling soil erosion on steep highway embankments and the like is putting compost blankets on them. And when you blow the compost on those steep embankments they’ll have the native grass seed in them so you’re actually growing this living wall, if you will. And so there’s a huge market for green infrastructure. Green infrastructure replaces the gray concrete walls, and pipes, and things so we’re beginning to emulate our native landscapes.
Linda Bilsens B…:
Compost can also be used in reclaiming disturbed sites, in general, so an old mine that’s closed down you can apply compost. Compost basically just allows plants to grow. It helps plants grow. And plants are what help to rebuild the landscape and help absorb any extra water and healthy soil. That’s what’s been amended with compost helps to filter water so it actually improves water quality too. So there’s lots of benefits to improving disturbed landscapes.
Brenda Platt:
Including land that’s been harmed by the wildfires. Caltrans, which is the Department of Transportation Agency in the state of California, has done studies using compost on fire-damaged lands to help it come back to life, and lots of positive research and impacts of using compost.
Linda Bilsens B…:
And we might not generally think about urban cities, city landscapes as disturbed sites but it’s very much true. Whenever you build something you’re compressing the soil so a lot of community gardens are actually based in places where things don’t readily grow and so you need to import soil. And being able to compost locally just helps reduce input costs because you can help create something that you would otherwise have to buy to help improve your soil to grow.
Luke Gannon:
This is so interesting. This is making me think about these big catastrophes that we often think are unsolvable. So I’m curious how you guys measure within your own gardens, how you feel like you are making an impact within this larger frame of the climate crisis?
Brenda Platt:
I feel so privileged to be able to work in this space because if we’re lucky, all of us are getting three meals a day so we’re having that food scraps pass through our hands. And one of the beauties of composting is that it can be small scale in people’s backyards or a worm bin in a classroom, on-farm, urban areas, community gardens, school gardens, urban farms, all the way to large scale industrial sites, right, and everything in between. So composting is inherently local and so everybody can do it. I mean, I have two worm bins in my basement, I have a HOTBIN outside, Luke, so I’m … To the chagrin of my family, I am weighing every food scrap as it comes out of my house, been doing that for years. So I’m also lucky I’m in one of the communities that has curbside collection of food scraps. We’re a family of four and I … We are composting at home about 74% by weight. And that’s really only fresh fruit and vegetable scraps. I don’t put any of the bones or meat or cooked science projects left over in my backyard.
Brenda Platt:
It’s actually quite a lot that you can do at home if you have the space and you’re one of … Living in a house that you like to garden, and it can be used for compost, and you want to not buy the compost anymore. And I’ll just say, I think we’ve become so good in many of our communities collecting our yard trimmings, our fall leaves, that we’re going to find our actual backyards are starved of that organic matter. I mean, why do we think the trees lose those leaves? It’s supposed to nourish the trees, right. I live in the Mid-Atlantic area and a lot of our mature trees are very stressed because of climate disruption. Well, we’re not really doing a good job of protecting our suburban urban trees by keeping that organic matter within our own urban and community soil.
Brenda Platt:
If you can do it at home, great, it’s not that hard. There’s lots of home composting trainings available. We’ll put in our show notes the link that we have to our home composting. But don’t feel like you need to do it either. If you’re interested in home composting, you can contact your local public works department, recycling coordinator, elected official and say you want curbside collection or you want a drop-off site or you want a training program. So you can advocate for these programs within your own community.
Linda Bilsens B…:
And the great thing is that you don’t necessarily have to do it yourself. There are entrepreneurs working in this space that provide services to come collect food scraps from your house so you’d be supporting a local business in that way. And there are community composting projects that are based at local … At schools or community gardens or urban farms where you can get involved. So there are lots of opportunities, it doesn’t just have to be in your own backyard.
Reggie Rucker:
That’s all just really fascinating. I think there’s something about that concept of thinking about how … When we want a pretty yard then we’ll clean up the leaves but when we’re sort of obsessing over how something looks, we’re losing a lot of the value in sort of what nature is trying to provide to us. And so I love that idea of composting, sort of bringing back the nutrients of the things that nature is trying to give us. We can help foster some of that a little bit. We will be right back after very short break.
Reggie Rucker:
As an organization seeking the end of corporate control in local communities, you’ll understand why our commercial break sounds a little different. There’s no corporation selling you something in an ad, just me thanking you for listening to our show. And if you’re enjoying this episode, which if you’ve made it this far I’m assuming you are, I hope you’ll consider heading over to archive.ilsr.org/donate to help support our work. Your donations not only make this show possible but you’re also helping support our work across all of our programs to build local power communities across the country. So please we would be so appreciative if you could head over to archive.ilsr.org/donate to contribute today. Any amount is sincerely appreciated. And if you’re looking for additional ways to support, please rate or leave a review of the show over at Apple Podcast, wherever you listen to your podcasts. These reviews make a huge difference in helping us reach a wider audience. Okay, that’s our break. Thanks for listening. And now back to the show.
Reggie Rucker:
I wanted to pivot a little bit, and maybe I’ll start with you Brenda, on this. So there’s this equity component of sort of climate change and solutions to climate change that sometimes may get overlooked. As I was doing a little bit of researching, sort of getting ready for this conversation, there were some obvious elements that were sort of brought to attention where low-income people tend to suffer the most from these localized effects of climate change since they’re more likely to lack AC or work outdoors. There’s a study from the American Geophysical Union, and they pointed out this widespread race-in-class disparity sort of in these urban heat islands.
Reggie Rucker:
This made me think about a book that I read a couple of years ago, it’s Eric Klinenberg, Palaces for the People. And so he opens with this anecdote of 1995 Chicago, there’s this heat wave and there were sort of somewhere in the neighborhood of seven, 800 excess deaths. But what he was pointing to was it wasn’t necessarily neighborhoods that had concentrated levels of poverty or violence, but it actually were these neighborhoods that lacked a type of social infrastructure, whether they’re libraries or parks or just places where people can come together. So as I was thinking about all of those things and sort of how there are these disproportionate impacts that climate sort of changes is having, I’m wondering how sort of composting as a practice plays into any of that? How does that give us an opportunity to bring greater equity to the effects of climate change?
Brenda Platt:
Lots of opportunities here. And I’m so glad you raised the equity issue. First, let me just say that waste historically has been an environmental justice issue. I think my colleague, Neil Seldman coined the term waste imperialism, that we’re dumping our waste on areas of least political resistance, whether it’s the garbage barges on Haiti from the ’80s or in our urban areas where trash incinerators get built. The largest trash incinerator was in Detroit, a predominantly African American community. There’s a trash incinerator in Baltimore that ILSR with others has been working to close down as an example. And then taking the urban heat island effect in Baltimore, there’s been some studies on that. And, by the way, let me just say that what Reggie’s referring to there is when the temperature in a metropolitan area is significantly hotter than surrounding areas because of the urban development materials like concrete and asphalt, which are replacing natural vegetation. So it’s like a city is what they call the concrete jungle where the sidewalks are absorbing the sun’s heat and emitting it back, right.
Brenda Platt:
And so take a city like Baltimore, which again is the home of one of the largest trash incinerators in the country and is repeatedly ranked for poor air quality in the worst urban heat among us cities. And I think there was a study done a few years ago that showed that the heat island impacts were predominantly in African American and low-income neighborhoods of East Baltimore, where on a hot day the average temperatures were in the high 90s and reaching above 100 degrees. And in contrast, the temperatures were in the low 90s and the more affluent and greener areas of Baltimore. And so where this connects to green infrastructure and the use of compost is direct. Those neighborhoods have a lower tree canopy than the other more affluent neighborhoods. Can you plant more trees? Well, then you need planting beds for those. If you have organic matter like compost added, you’re giving those trees a better chance of surviving and thriving, right.
Brenda Platt:
There’s been a big movement to plant more tree canopy to deal with this heat island effect, and compost being directly related to healthy soils is a key part of that. Let me just say too that for the composting itself, one of the things that we work on here at the Institute for Local Self-Reliance is … Like I said before, there’s no one way to do composting, but often cities think oh, I need a 50-acre site out of town to build my composting facility. Well, you may need a large facility, maybe you don’t. Maybe you can scale up a distributed decentralized infrastructure. So one of the things we’re promoting is giving people home composting bins, setting them up for success, setting up empty lots to create neighborhood gardens and urban farm, and having composting be an accessory activity that brings neighbors together to do this common work building the social fabric of growing food, engaging the youth.
Brenda Platt:
At some of the sites that we’ve been working within the D.C. metro area, in Baltimore, where they’ve converted these sites that had drug dealers, and now they’re growing food, and they’re having youth come in, and they’re doing composting. I mean, this is how we get people in part engaged in composting when they can directly see the benefits to their communities and the compost is coming back to build their healthy soils. Equity is really important here when it comes to how we’re handling our waste so we’re not dumping on disadvantaged at-risk communities, and at the same time giving … Employing them, creating jobs, and creating greener businesses, and then dealing with these climate disruption and chaos which is only going to get worse if we don’t address these issues.
Reggie Rucker:
That’s really powerful, especially I mean, the idea of just seeing the community rally around something that’s going to benefit the community and just seeing the community live in their power around that, that’s a really special thing. Linda, I wanted to bring you into this if I could and sort of … So what Brenda was mentioning was a lot of … It sounded like community-led initiatives, but I’m wondering if you can point to any sort of specific city, county initiatives where they are being intentional about sort of providing resources or partnering with the community in a really intentional way to create a sort of a more climate-friendly community using composting as a key tool.
Linda Bilsens B…:
Well, I can point to, at a state level, an example. In California, a program that I looked at quite a bit in the last few years, that’s a great example of what can happen when a state connects healthy soils with the farmers in their state. They provide those farmers with financial support to implement the practices that improve soil quality. In California, there’s the Healthy Soils Program. And essentially it’s funded through the Greenhouse Gas Reduction Fund. And so farmers who want to participate in this program can apply and they can get financial resources to basically implement healthy soil practices like applying compost. And applying compost is actually, by far, the most popular of the practices because you could also be doing cover crops, and planting hedgerows, and all these other things that farmers can do. I think this is a great example of what I wish we could be doing elsewhere in the country. It’s taking money and supporting our farmers and doing what a lot of farmers would like to be doing but maybe don’t have the funds to get started.
Brenda Platt:
And California is probably one of the states that has really recognized the connection between healthy soils, the role of compost, and the role of farmers in using compost. A shout-out to California. I wish we could replicate some of these programs in other parts of the country. We’ll get there. I’ll just say, at the city level, there’s a number of examples. I wish we could point to one city and say, that’s the model, everyone, but, of course, you have to integrate the best features of many great programs out there.
Brenda Platt:
And just because we were talking about the heat island impact, I’ll just say that New York City has been probably the leader in supporting a network of community-scale composting sites. One of the foundations of that program is actually their Master Composter training program. So a lot of the graduates of that program have gone on to start these amazing community composting programs. But the compost that’s produced from that network of more than 200 sites is going into plant trees and other things and improving the tree canopy that we were just talking about. And they’ve done some studies on that too.
Brenda Platt:
New York City’s great. Jersey City’s doing some good things. Shout-out to Philadelphia. Parks & Rec’s has started a community composting network. DC Parks & Rec’s has 56 community compost sites. They found that their community gardens that they were managing, or helping to manage, that they were buying soil amendments like mulch, and they realized maybe we could be making our own compost so now people who get trained drop off their food scraps. That program has been replicated in other parts of the U.S. and so we’re seeing that grow. I also just want to mention Alameda County which is in California, maybe your hometown area, Reggie.
Reggie Rucker:
I was actually born in Oakland and grew up in Alameda so that is my hometown.
Brenda Platt:
There you go. Well, one of the public agency there, StopWaste is doing lots of great things on cutting waste in a wide range of activities but they have a goal of zero waste. And one of the unique things that they have is they have … And this is really important is funding, right. Follow the money. If this is important invest in it, right. Build the infrastructure, fund these programs, and Alameda County is doing just that. And where does the money come from? Well, they have a surcharge on the waste flowing to the local landfill, and that per ton surcharge is funding their zero waste programs including composting. Part of their grants that they’re doing is they’re doing public composting education, they’re expanding local access to compost, and they’re using compost in landscaping. A shout-out to Alameda County.
Brenda Platt:
There’s a lot going on in San Mateo County, also in California, is doing something similar. On the east coast, the city of Albany has recently started supporting community-scale composting with partnerships, and their partners or community composters in communities with environmental justice issues and so they’re creating jobs and involving those partners in the process of collecting the food scraps and making the compost, and then the soil’s going back to that community. So there’s lots going on around the country in this space that should give people hope.
Reggie Rucker:
So I’ve been in D.C. for just coming up on about a year, and every time I hear California shout it out I love it. This whole conversation has been worth it just to hear all the California shout-outs so thank you both.
Luke Gannon:
Gosh. Well, I feel like I have so many questions from your answers to that previous question. One of my questions that I’m going to return to, which is something that I’m really interested in is, how do you change the mentality around these issues? Whether it’s composting or the climate crisis, as an example. Because to me it feels like we can do these practices and we can have these amazing solutions, but until you get a broader more people on board and change how people think about these solutions and think about these topics, it’s hard to actually get there. So I’m curious just what you guys think about that. And how you both feel like you are changing that mentality through composting?
Brenda Platt:
This is such a important question. And I think it starts with connecting the dots here. Understanding the connections between our wasting culture, whether it’s food scraps or single-use plastic bottles, disposable food service ware, one of my pet peeves, and climate disruption and chaos. I mean, we can’t just continue to consume materials, unfettered consumption. For every ton of waste we put at the curb for trash collection, there’s 70 tons upstream from mining and transportation. The climate crisis is directly connected to how we consume materials but it’s also something we can do a lot about. We can reduce waste. We can take personal responsibility sure, but I’m a big fan of policy and paradigm changes. I think understanding the connection of food scraps to climate, and methane, emissions from landfills, and then if you make compost it’s going to act as a carbon sink in the soils, and it builds community resilience, and all these things we’ve been talking about. Maybe that’s first that awareness, but then we have to convince our policymakers.
Brenda Platt:
We have to be active citizens, not just consumers. I hate the term consumers. We have to activate our citizen muscle, and it doesn’t have to be a heavy lift. So those of you that are listening say, “Oh my God, policy, no.” Well, don’t worry about it, just make one call to your local city council rep, they actually want to hear from you. You don’t have to run for office. We want you to run for office but you don’t have to do that to make change. Call them, let them know this is important to you. Maybe there’s a state policy or a city ban. But even on a city that’s on a shoestring budget, they can do something. Can they pass a law? We did this in Maryland, by the way, this example. And Maryland passed a law last year that just said, “If you’re in a homeowner’s association complex, you have the right to compost in your backyard or to subscribe to a food scrap collection service provider.” Just get out of the way. Don’t prevent me from doing these things.
Brenda Platt:
Or in Washington, D.C., the District of Columbia, passed a bill a few years ago called the Home Composting Incentives act which set up a rebate of $75. So if you took a home composting training program you could then get $75 off the purchase price of buying a home composting bin. That’s not a lot of money for a city to do, to do a training program or to make it easier for people to do the right thing. And buying compost is also an easy lift for a city or a state or a business that’s using soil amendment. So if you have a green purchasing policy in your city, can they include buying compost to amend their local soils? Well, that’ll drive the market. We used to say, or we still say in the recycling world, if you’re not buying back recycled content products you’re not closing the recycling loop. So the same thing’s true for composting. I think there’s lots of ways people can get involved, lots of things that cities can do and elected officials, and it doesn’t have to be everything at once you can start somewhere. There’s just no excuses anymore.
Linda Bilsens B…:
Well, compost being something that you can start doing today is really empowering in the sense that you don’t have to wait for somebody else to do something, you can start a compost pile in your backyard if you have one. If you don’t, you can look at starting a worm bin, or you can find other people in your community that are composting and meet other people that are interested in keeping their food waste out of the landfill and all that. So that’s one way that it’s empowering. But over the time that I’ve been at ILSR, seeing what magic can happen when you bring together people into a backyard composting class or a community composting class. The connections that get made in those classes, it’s really been amazing to watch the evolution over many years. Some people who went through our very first Neighborhood Soil Rebuilders Composter, a training program back in 2014, they’ve gone on to start their own businesses consulting on starting onsite composting infrastructure. Or, they’ve gone on to start their own food scrap collection companies.
Linda Bilsens B…:
It’s amazing because it all comes down to a few weeks together where we shared our geeky love of compost, and now people have gone on to change their life trajectories because of that. And we, obviously, can’t take credit for all of that, it’s just we’re all in this ecosystem together and we can support each other on our journeys. All the different skills that people bring to a community project. We need people who are doing lots of different things, lots of different skills to come together and you never know what’s going to happen. Somebody might end up running for a local government of position, or they might just go on to start their own company. It’s really just beautiful to see what happens.
Luke Gannon:
I love that answer. Thank you, Linda. I totally agree. I think we don’t know how many people … How far our reach is. Word of mouth really means a lot. And the changing of one person’s trajectory often means the changing of many people’s trajectory. I think that’s a wonderful answer.
Reggie Rucker:
So Brenda, I do, I love that whole concept of just start where you are. And as long as you can sort of frame it in that lens of just starting where you are and doing something, the rest will build on itself. And so that’s an incredibly powerful message to take away from this. I think the last thing we wanted to get to is sort of a question I hear a lot. It’s always one of my favorite questions though because I mean, it’s something that can pull anybody sort of into some next steps. And so curious from you, what is a book that you’ve read? Maybe it’s an article, maybe it’s a podcast. What is something that’s just resonated with you that has really sort of influenced the work that you’re doing today?
Brenda Platt:
I can never just give one answer to these questions, I apologize. I just want to start with a book that influenced me many years ago, even when I was still in college. Small is Beautiful by E.F. Schumacher. I think it was written in the ’70s. And it’s not just because I’m under five feet tall, but it’s really a book about advancing small scale. At that time the term was appropriate technologies and policies as a superior alternative to the mainstream ethos of bigger is better. I read that before I joined ILSR, but it had a profound impact on me and the work I do, and really aligned with my goals.
Brenda Platt:
When it comes to composting, this is where the other answer is. I would say the book that’s been the most influential to me in the composting realm is a book that’s been around for a few decades called the On-Farm Composting Handbook. It’s not just for on-Farm composters, but it really just makes it so easy to understand what composting is and how to do it. And it’s not rocket science but there is some science behind it. You need oxygen and air like I said. You need moisture, you need the right recipes. Not hard, but once you learn this stuff … I mean, I took a composting course maybe 15, 18 years ago where I learned oh, you need oxygen. Well, okay. And man, I just drank the Kool-Aid and I never turned back.
Linda Bilsens B…:
Well, I got into composting because I wanted to be able to grow my own food. And so I’ve always come to composting from that perspective. And so Eliot Coleman’s book, the Four-Season Harvest, is something that I think a lot of people who are gardeners or farmers will know. And I think just seeing how it fits into other practices that you can do at your home to produce food for yourself and your family. And then right now, a book that I’m really geeking out about, which also in the vein of food production, The No-Till Organic Vegetable Farm by Daniel Mays of Frith Farm. And they’re such an example of what a regenerative farm looks like so it’s pretty exciting to me.
Reggie Rucker:
That’s awesome.
Luke Gannon:
It’s one of my favorite questions at the end of episodes too. That I’m going to the library finding that, reading it, it’s very exciting.
Reggie Rucker:
And actually one of the reasons why we wanted to pose this question is because then it gives us an opportunity to send people to their local bookstores and pick up these books. It just brings this whole thing full circle. With that, Brenda and Linda, we’re going to thank you both for your time. It was great to have you on here and having us sort of get a sense of how composting is … I think for me personally, I’ve been doing everything I could on my part sort of just individually to try to reduce the amount of waste that I produce, and what I buy, and the things I consume. Whenever I thought about composting I felt like it was a thing that was one, a little too big for me to sort of tackle. And never really sort of thought about it as a solution to climate change, it was really just a thing I thought was the right thing to do. And so having this conversation was incredibly enlightening. Yes, thank you for sharing all of the wisdom.
Luke Gannon:
Thank you both so much, Brenda and Linda. A year ago now since I joined ILSR, and reading about your resources on the composting page I have learned an incredible amount, and I just feel so lucky to be working with both of you. And now I have become the crazy person. Going to other people’s houses and they’re not composting I’m like why aren’t you composting? So thank you both so much.
Reggie Rucker:
Thanks for joining us you two.
Brenda Platt:
It’s been a pleasure.
Linda Bilsens B…:
Thanks for having us.
Reggie Rucker:
Thank you for tuning in to this episode of the Building Local Power podcast from the Institute for Local Self-Reliance. You can find links to everything discussed today by going to archive.ilsr.org and clicking on the show page for this episode. That’s archive.ilsr.org.
Luke Gannon:
And while you are at archive.ilsr.org, you can sign up for one of our many newsletters and connect with us on social media. We hope you will also take the opportunity to help us out with a gift that helps produce this very podcast and supports the research and resources that we make available for free on our website. Finally, we ask that you let us know how we are doing with a rating or a review on Apple Podcasts or wherever you find your podcast. This show is produced by my amazing colleague, Reggie Rucker, and me Luke Gannon. This podcast is edited by Drew Burchbach. Our theme music is Funk Interlude by Dysfunkshunal. And that’s it. I hope you’ll join us again for our next episode of Building Local Power. Have a good day.

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42 min
June 16, 2022Anti-Merger Guidelines Would Stop Corporate Concentration, Revive Local Economies
On this episode of Building Local Power, host Jess Del Fiacco is joined by John Farrell and Stacy Mitchell, Co-directors of ILSR, and Ron Knox, a Senior Researcher on our Independent Business team. The group discusses the Department of Justice and the Federal Trade Commission’s plan to overhaul their merger guidelines.
Highlights include:
The history of anti-merger laws in the United States.
How the lack of merger regulation has impacted workers, consumers, and our democracy.
ILSR’s recommendations that detail how we can change merger guidelines.
How new merger policy could revitalize local economies.
“The Great Depression was in large part, and the stock market crash, driven by the merger and concentration of electric utility holding companies.” – John Farrell
“So you allow these mergers to happen and it’s like when Spider-Man shoots a whole spider web at a villain. These mergers shoot a whole spider web at the economy, every part of it, and really tamp down the ability for folks to earn a living, start a business, do all these kinds of things.” – Ron Knox
“I think our chief recommendation was instead of calling them the merger guidelines, we should call them the anti-merger guidelines in keeping with Congress’ intent and being clear about the new direction and policy that at least we’re hoping to see.” – Stacy Mitchell
Related Resources
Transcript
Jess Del Fiacco:
Hello and welcome to Building Local Power, a podcast dedicated to thought-provoking conversations about how we can challenge corporate monopolies and expand the power of people to shape their own future. I’m Jess Del Fiacco, the host of Building Local Power and communications manager here at the Institute for Local Self-Reliance. For more than 45 years, ILSR has worked to build thriving equitable communities where power, wealth, and accountability remain in local hands.
Jess Del Fiacco:
And hello everybody. Today we are going to talk about merger policy. If you’re thinking, “I am not an economic policy wonk. I don’t want to hear about merger policy,” don’t turn the episode off because it is going to be a great conversation. And I promise it’ll be interesting for everybody. Joining me to talk about this are my colleagues, John Farrell and Stacy Mitchell, who are co-directors of the Institute for Local Self-Reliance, as well as Ron Knox, who is a senior researcher with our independent business team. Welcome to the show everybody.
Ron Knox:
Hey, Jess. Thank you.
Stacy Mitchell:
… be here.
Jess Del Fiacco:
So I can just give a little bit of a background, I think, before we dive into questions, although I’m sure I won’t do as good of a job as everybody else will on this call, but I will do my best. So the Department of Justice and the Federal Trade Commission recently announced that they’re going to overhaul their guidelines around mergers. And ILSR has submitted comments, which detail basically how these guidelines should change in order to stop corporate concentration and support a more decentralized economy. So with that kind of context, I think I’m actually going to start with asking Ron and Stacy to talk a little bit about the history of anti-merger legislation in the US and how this enforcement has changed pretty dramatically over the course of the 20th century.
Ron Knox:
Yeah Jess. Thanks. So there is a lot of history, of course, behind the reason that we look at mergers in this country, the reason we prohibit mergers that would be bad for the economy, for workers, for small business, and for communities, but I think it’s important to understand what the result is when we don’t do that very well, when we don’t stop those mergers. Like I think about beer a lot, not just because I enjoy beer. I do. But I also think about it because it’s a great example of how corporate concentration has really gotten out of control in this country and why. So for a long time, we’ve had two really dominant brewers, right? We have Budweiser, we have Miller Coors who are the same company now. And that’s always been the case, but for a good solid decade, over the last 20 years, we had this explosion in craft brewers. All this amazing choice.
Ron Knox:
And then what happens? Then you have the big brewers suddenly start to buy up some of these really nice, small, independent brands. You push them out to stores, push them out to their distributors, who of course get the beer to shelves and into bar taps. And suddenly you end up with not real choice, but this illusion of choice and real small, independent craft brewers get pushed out of the market. They can’t find the shelf space and they can’t get to their customers. And that’s all because of mergers that largely went unchecked and uncriticized by our anti-trust agencies. And that’s just one example. There examples in everything else that affects our lives. We think about the meat we buy in the grocery stores. We think about the cell phones we use to talk to one another and to get our information and so on.
Ron Knox:
These are all really great and once very vibrant industries that have been concentrated down to massive corporate power through mergers. It’s the kind of thing that we used to stop. We used to prevent in this country and we have a vibrant history of doing so. And that’s kind of fallen by the wayside over the last four decades or so. Stacy, do you want to talk a little bit about the history of kind of where we were and where we are today?
Stacy Mitchell:
Yeah. Absolutely. I mean, in some ways it’s like almost helpful to like just state how we think about mergers today, right? So there’s this idea that companies, they want to merge and the federal anti-trust agencies and the courts, they say like, “Is this merger going to be good for consumers? Like we assume it’s going to be good for consumers because like bigger is better and scale is good. And only if we can really find like clear cut, very detailed evidence that it’s somehow going to be bad for consumers, are we going to say no, otherwise we’re going to say yes,” right? Like this is the framework. If you follow the news a little bit, sea mergers talked about like this is the framework that has been the case for decades now. And for most Americans, it’s the only framework that we’re familiar with, which is like a big yes to mergers.
Stacy Mitchell:
And that idea that mergers are a good idea is like actually baked into the current policy and guidelines that the agencies use. If you read those current guidelines, it basically says, “Hey, there are lots of benefits to mergers.” And so that’s the world that we all live in and that few Americans remember a time before. But if you go back, it’s really striking. Ron and I just did this deep looking back at the history around policy on mergers and it’s just a completely different world. So Congress passed, in 1890 and in 1914, laws that govern monopoly issues, including mergers. Those laws sort of limited mergers in some ways, but it wasn’t until 1950 that Congress passed this very strong anti-merger law. And the reason that they did it was that in the aftermath of World War II, there was growing numbers of mergers.
Stacy Mitchell:
And the way that the Supreme Court had interpreted those earlier laws, Congress felt like was not what they intended and it was leaving too much room for companies to be able to merge and not giving regulators enough tools to say no. And so in the late 1940s over a couple of years, Congress looked very closely at this issue of mergers, had a lot of debate and discussion and hearings and so on. And in 1950 passed the Celler-Kefauver Anti-merger Act. And what that law was designed to do is right there in the title, it is an anti-merger law. And it’s so striking to go back and read it because it’s very clear. We don’t want to see more consolidation. We actually want to block additional concentration and we want to create the conditions in which industries could actually become de-concentrated and the reason we want to do that is we think it’s critical for communities and for democracy.
Stacy Mitchell:
And so that was what was on the books. That’s how the agencies and the courts interpreted merger law for decades. And then in 1982, we have a coup. Reagan comes in, a new bunch of thinking, and they basically overturn, through agency issued guidelines, overturn the law effectively by issuing new guidelines that take a totally different perspective on mergers.
Jess Del Fiacco:
I want to talk more about the ties between this anti-merger policy and our democracy and our strong communities. But first, I do want to throw it to John to get his perspective on what this looks like, specifically in the energy sector.
John Farrell:
Yeah. The story of mergers and concentration, electricity business actually has very strong ties with our kind of overall economic health as a country. The Great Depression was in large part, and the stock market crash, driven by the merger and concentration of electric utility holding companies. So you had these very stable monopoly businesses that went out and bought all sorts of other businesses that were unrelated. And much like the mortgage crisis that happened more recently, people bought the stocks of utilities thinking they were very safe investments and these holding companies collapsed under their own weight, basically inflating the value of all these subsidiaries and sort of hiding them behind the captive customers that they had as monopoly utility companies because they were given these designated customer areas by state legislatures.
John Farrell:
So Congress passed, in 1935, the Public Utility Holding Company Act, which was meant to basically prevent this kind of behavior from happening in the future to say, “Utilities, you just need to act as utilities. You can’t mix and match with all sorts of other industries to confuse customers. We need you just to be sort of straight laced and narrow.” And in 2005, not too long after we lifted a lot of other restrictions on mergers and finance for example, we also had the Energy Policy Act that overturned the Public Utilities Holding Company Act and has enabled a wave of mergers in the utility industry where you now have utility companies that have tens of millions of customers in many unrelated parts of the country and you have a lot of problems with the way that utilities are essentially privatizing the wealth of these publicly granted monopolies through these merger deals that they make with one another.
John Farrell:
So transferring that wealth from the public from the government and transferring it to private shareholders. So without getting too much more in the weeds, I’ll just say, there’s a lot of parallels to the merger problems we’re seeing broadly in the economy and what we’re seeing in the energy business as well, which is a huge sector for the economy and of course power is much of what we’re able to do in the rest of the economy.
Ron Knox:
Yeah. I want to jump back in because I think, look, we described a little bit about how we got to this point, but to get back to kind of what I was originally like saying, I think it’s impossible to overstate the effect that this like four decade long wave of corporate mergers has had on the economy, on us as citizens, as workers, as entrepreneur, small business owners. I mean, it just had this unbelievable effect. We think about monopoly power all the time. We talk about monopoly power, but this is how we get to this point. This is how monopoly power comes to exist. It comes to be in lots of different ways, but mergers is like the freeway. It’s like the expressway from a diversified democratic economy to real monopoly power. And so what happens?
Ron Knox:
So you allow these mergers to happen and it’s like when Spider-Man like shoots a whole spider web at a villain. These mergers like shoot a whole spider web at the economy, every part of it, and really tamp down the ability for folks to earn a living, start a business, do all these kinds of things. So I talked about meat before. So you look at meat packing. What happens when you end up with all of these mergers in meat? Like a staple of the American diet and a staple of the economy, especially in kind of far flung, rural parts of the country. So what happens? So at the moment, three or four massive meat processors control every kind of slice of the meat industry, whether it’s beef or pork or chicken or whatever. They got that way because of mergers and when those mergers happen, you end up with these massive companies that have what we call buyer power.
Ron Knox:
They control the price that’s paid for, in economics talk, it’s like inputs, but what are we talking about? We’re talking about the price you pay for cattle, the price you pay for pork that’s coming from farmers. So you have all these family farmers out there who are already scraping by, trying to make a living, struggling in what is a very difficult industry. And then suddenly, the only place that these farmers and ranchers can sell their livestock is essentially one company or maybe two companies. And they can absolutely dictate the price that’s paid for these products. And so what happens? So you have family farmers go out of business, you have family farmers sell their farms to these massive farming conglomerates, which is the only way that they can turn a profit, and you end up with an absolutely fractured rural economy and farmers who are hurting. Right?
Ron Knox:
Then you go to supermarkets. Okay. So what happens? So you have all of these mergers in the supermarket sector and these supermarkets end up with this massive buyer power. They have suppliers that sell into the supermarkets, just small businesses or whatever. Folks that sell produce or sell refined goods or whatever. And you have these supermarkets who could absolutely dictate the price, not only the price that they pay for these things, but they can dictate the winners and losers in an entire economy. And it’s the same for workers. Workers are just an input. If you’re a worker who works in a farming community and you want to work in a meat processing plant, you probably really only have one option for that.
Ron Knox:
And so that plant and that company can dictate your wages, what your working conditions are like, all of those kinds of things and you end up with these exploited communities of workers out there who have no other option, but to go to work every day for low wages in really dangerous conditions, places where they’re massive COVID outbreaks, all these kinds of things. It just has a snowballing effect across the economy when you let these mergers happen. And that’s what we’ve seen for the last 40 years or so. And that’s what changing these guidelines is really intended to help.
John Farrell:
I love that you touched on sort of all of the different components from like how you as a worker can get screwed by this, how as a consumer you’re going to pay more for food, how as a producer you’re going to have trouble getting your products to market. There’s one other thing I think from the energy sector that is sort of a useful lesson here is like we also lose access to our like political leaders. That utility companies, for example, are among the biggest donors to state legislatures and state legislative campaigns. And they undercut then the ability of our regulators to actually control and manage the size of these companies. They sort of become too big to be properly accountable. So I think there’s a cost across the entire economy when companies get too big and the merger guidelines are at the heart of that.
Stacy Mitchell:
Fascinating to me going back and reading a lot of the congressional record from that 1950 law, it is almost entirely focused on the political implications of consolidated power. And in the world we live in where we talk very narrowly, not even about economic implication. We talk very narrowly about consumer prices. And so narrowly even that we have mergers that directly harm consumers that get through even we’re so narrow about it, but you go back and look at that legislative history and they touch some on the economic issues, but mainly it’s about political power and this notion that if you want to live in a democracy where people control their own fate, then you have to decentralize economic power. There’s a great quote that we have in our comment letter to the agencies from Senator Estes Kefauver who is the lead co-sponsor of the bill.
Stacy Mitchell:
He says, “Through monopolistic mergers that people are losing power to direct their own economic welfare. Local economic independence cannot be preserved in the face of consolidation, such as we’ve had during the past few years. The control of American business is steadily being transferred from local communities to a few large cities in which central managers decide the policies and the fate of the far flung enterprises they control.” It is really a message of local self-reliance and democracy that’s embedded in that. And it’s amazing to me, looking at that legislative history, to think of like how the hubris of the people who came in the 1980s and we’re just like, “Nope. We’re just going to erase all that, write our own rules, and write a pro monopoly policy in the face of very clear direction from Congress.”
Ron Knox:
And it’s wild to go back and read some of that stuff from the ’80s because literally there are people who were like, “Yes we know what Congress said. Yes we know what they were trying to do, but we don’t care now. We’re just going to do the other thing because we think we’re right and we think this is better.” It’s very like anti-democratic by its very nature. Not only in what it was trying to do, which is overturned the will of Congress, but also in its effect in that it kind of like de-democratized the economy and put a lot of power in very few hands.
Jess Del Fiacco:
Yeah. I feel like we’ve implied this, but I don’t know if we’ve explicitly really stated. I mean, is it correct to say that mergers are just out of control? Like if this is a highway to monopoly power, like I don’t know. There’s no speed limit. I don’t know how to change that imagery to fit this, but like is that correct?
Ron Knox:
Yeah. I mean, that is correct. I wrote an article for the American Prospect late last year really talking about this. So this is not hypothetical. The merger wave that we have experienced for the last four decades is now at its Zenith. It is absolutely the most breakneck pace of corporate mergers America has ever seen. At one point late last year, the federal agencies were having to review 12 mergers a day. That was the number that was coming across their desk. Unbelievable pace of mergers. Why is this happening? In some cases, a lot of really big powerful companies who are sitting on big piles of cash throughout the pandemic and waited for other companies to start struggling and then they’re buying and they’re not buying to just spend the money, they’re buying to acquire market power.
Ron Knox:
And that’s what we’re seeing at the moment. The agencies are really struggling under the weight of all these mergers. And I think these new guidelines, the idea of changing the guidelines, is to not only create some structure around the way that mergers should be reviewed in this country and the way that corporate consolidation should be thought about, but also, as a signal to corporate America, like you have to stop. Some of these cannot happen. And we can start talking about this. I don’t know, Stacy, if you want to start to get into this, but the way that you stop some of these mergers and you blunt the force of this wave of mergers that we’re experiencing is you create structural boundaries where you tell corporate America, “Look, if you’re concentrating an industry beyond this point, forget it. Don’t come to us because we’re going to tell you no and we’re going to sue you and we’re going to go to court and we’re going to win.”
Ron Knox:
That’s really the idea behind the guidelines and that’s some of our, we hope that’s the idea behind the guidelines. I shouldn’t say that. That was the idea behind our recommendations to the agencies about like what they should do to actually stop some of these bad mergers from happening. But Stacy, I don’t know if you want to talk more about that.
Stacy Mitchell:
Yeah. I mean, I think our chief recommendation was instead of calling them the merger guidelines, we should call them the anti-merger guidelines in keeping with Congress’ intent and setting like being clear about the new direction and policy that at least we’re hoping to see out of Washington, but yeah and that’s absolutely right. Like this wave, it’s hard to describe and it’s strange that we’re at this moment of a resurgence of interest in anti-monopoly policy. We are experiencing one of the biggest pushes by corporate America to consolidate power. And I think the reason that rewriting these guidelines, this policy, has been such a top priority at the Department of Justice is anti-trust division and at the Federal Trade Commission is just exactly what Ron was saying. Like we need to try to figure out how to put a halt to this and really slow this down.
Stacy Mitchell:
One of the recommendations that we made and I think was certainly echoed in other comment letters was this idea that we need to have some bright line rules that say, “Look, if a market is highly concentrated or if the companies that want to merge have a lot of market power or they’re very large, any of these sorts of triggers that above those thresholds, the answer is no.” That that is just presumed to be illegal and those mergers are treated as presumptively illegal. And therefore, the agencies don’t have to spend a lot of time analyzing those mergers. They can save those staff resources to address a set of mergers that don’t clear those guidelines.
Speaker 5:
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Jess Del Fiacco:
I’m curious if you, maybe Ron, what else are we calling for in our recommendations for anti-merger guidelines?
Ron Knox:
Well I’ll just name three things I think really quickly that I think are really important. So one is obviously the structural piece that I talked about before. So we’re calling for the agencies to essentially reinstate some really clear, bright line, structural limits on mergers. And when I say structural limits what I mean is mergers that would concentrate an industry beyond a certain point should be considered illegal. And that if companies bring those kinds of mergers to the agencies, these guidelines are telling the companies the agencies are going to sue to stop it and you’re going to have to go to court and we’re going to fight it out in court. And the hope is that’s usually enough to deter these kinds of mergers from happening. And the reason is because as Congress knew and understood in passing the anti-merger laws and as the agencies correctly noted in the original merger guidelines, which were published in 1968, bad industry structures lead to bad outcomes. They lead to bad behavior.
Ron Knox:
So if you have an industry that’s an oligopoly, that just means there are three, four companies that absolutely dominate, you tend to have bad outcomes throughout the economy that I described. Bad outcomes for workers, bad outcomes for small businesses that have to interact with these companies, bad outcomes for shoppers, bad outcomes for communities, right? High prices, low wages, all the things. So rather than having to go through these mergers one by one at the agency level and say, “Okay. What do we think this merger’s going to do? What do we think? The companies are telling us it’s going to be okay. It’s going to be more efficient. They’re going to save money. What do we think?” Instead of doing all that, which is a waste of time and money and resources and you’re also having to look into a crystal ball and try to figure out what a merger’s going to do, instead and you just say, “No.” You just say, “If there are five massive companies in an industry and this merger’s going to reduce that number by one, you’re going to leave four, forget it. Don’t bring it to us. We’re not going to do it.”
Ron Knox:
So I think that’s one recommendation. A second that I think is really important is a renewed and maybe heightened emphasis on the potential for what we call vertical mergers to harm competition. We say vertical mergers we mean mergers between companies at different points in industry. So one company that makes car parts merging with an automobile manufacturer, for example, but you know what I mean. At the moment, the current guidelines essentially say, “All of these mergers, they’re not only not bad. They’re often good and they lead to all these efficiencies.” I’m not going to get too into efficiencies, but it’s basically corporate speak for we’re going to make more money and it’s fine, to give you a short answer. So these mergers happen. And even when the government tries to challenge these mergers in court, which they have over the last five, six years, they often fail. Largely because the guidelines say, “They’re fine. Don’t believe it. Don’t believe that these things are going to be bad.”
Ron Knox:
And the result has been increased industry concentration, corporate concentration, more power in the hands of a few very powerful corporations that then have the ability to really close off industries to new companies, outside competition, and so on. So we think they’re quite bad and we think that the new guidelines really need to reflect that. And the third thing is, kind of like I mentioned earlier, we want there to be a spotlight on this idea that mergers can create buyer power, the power for massive corporations to control the price that are paid for everything from labor to raw goods to farm goods to all those kinds of things in the economy. We think that that’s really the kind of power that tends to hurt small, independent businesses and to really drain resources and money out of communities and leave communities more hollow, more reliant on massive out of state corporations and so on. So we think that the agencies should really be focusing a lot of their analysis of mergers on the possibility for those mergers to create really powerful buyers in the economy.
Jess Del Fiacco:
Stacy, did you have anything else you wanted to add about our recommendations?
Stacy Mitchell:
Well I realized that we’re going into a list, which is exactly what you wanted to avoid. The two things that I would say is one of the things we talk about is that the agencies should look at the overall health of a market or an industry. And in doing that, they should look at, are there a diverse mix of businesses of different sizes? Is it easy for new businesses to start in that market? So really we’re kind of bringing back a lot of the original goals that Congress laid out in 1950, which was this idea of decentralized markets with lots of local, small businesses, lots of competition for labor and therefore higher wages, all of those kinds of ideas. And so one of our recommendations to the agencies is not only to look at the two companies that are merging, but to really look closely at like whether the market that they’re in is actually a healthy market.
Stacy Mitchell:
And if not, that’s really a merger that should be scrutinized. And then the other thing I would name is that we’ve said a no remedies policy. And for people who aren’t familiar with this notion of remedies, like the agencies have become very, not only do they not challenge huge numbers of mergers, but even if they feel like one is going to be problematic, what they more often than just saying no or trying to block it is that they impose a remedy and they say, “Oh, okay. Well just don’t behave this way and we’ll monitor you over time just to make sure you don’t behave in that negative way with your market power.” And the evidence is that corporations merge and then they violate all of that stuff and there’s no putting the genie back in the bottle, right? These remedies are not in fact remedies, they don’t fix anything. And so one of the things we’ve really called for is stop doing that. If a merger is bad, you should just block it period. There’s no solution to it.
John Farrell:
That’s actually really interesting because there are parallels in the electric industry. There’s a pretty egregious example where Pepco, which is a fairly large utility that has since been subsumed by another one, but bought a smaller utility in Maryland. The regulators were concerned about sort of the balance of benefits for shareholders and customers. So Pepco said, “Well we’ll give everybody a rate credit of like $50 in the next year off their electric bill.” And then subsequently went in and asked for a rate hike that ate out the entire rate credit, which was approved. And so it’s just a perfect illustration. And there’s routinely in these merger guidelines and Scott [Hamling 00:28:11], who was a guest on Building Local Power last year, talked about this. There’s sort of this like buy off provision essentially where they say, “Okay. We recognize that shareholders are going to get like a billion dollars in benefits from this.”
John Farrell:
“So we want you to give like 10% of that to the customers in these short-term benefits,” and sort of ignoring the fact that those companies can come right back to regulators and often do and ask for a rate hike of the cap. And these are captive customers. They don’t have choices. In the electric industry it’s particularly egregious because you don’t have competition at all. And then these merged companies simply can continue to milk the cow of the captive customers. So it really is incredibly problematic to assume that it will be sufficient to have oversight as a substitute for keeping companies of a manageable size.
Ron Knox:
And I’ll just point out that these short-term benefits that the companies often promise the regulators to let these mergers through, they don’t happen half the time anyway. Particularly when it comes to things that really benefit communities, like we’re going to create jobs, we’re going to do these kinds of things. Once the deal closes and it’s out the door, that’s it. The companies can then do whatever they want and they tend to do that, which is why this no remedies policy that we’re advocating for we think is so important because you can’t go back and undo it. I mean you can, but that’s much harder than just saying no in the first place.
John Farrell:
I just want to say that it’s sort of like problems you have with parenting. It’s like once you give your kid permission to do something, it’s a lot harder to go back and be like, “Actually I don’t want to let you eat candy at five o’clock every day,” than it would’ve been to say no in the first place.
Ron Knox:
Yes. Correct.
Jess Del Fiacco:
So we’ve talked a lot about the consequences of bad merger policy, but I’m curious just in attempts to end on an optimistic note here, like say the agencies read these comments from us and they’re like, “Great ideas. We’re going to do all this.” What would that change in different industries or for local economies if we were to have stronger anti-merger laws? And anybody can feel free to jump on that.
John Farrell:
I think one of the things is that electricity is an essential service for all of us. You need it to power your devices, to refrigerate your food, to provide heating and cooling to your home. Utilities turned off the power millions of times during COVID for people who couldn’t pay their bills because they lost their jobs. And we have found, in two examples, a recent study by Center for Biological Diversity and some research by the Institute for Local Self-Reliance, that it’s larger utilities that tend to shut off the power more like on a per customer basis than smaller utilities. So one of the potential significant benefits here, and it has, I want to just emphasize it’s sort of a two phase benefit. One is they’ll stop turning off the power to people who can’t afford it to be off, right?
John Farrell:
Like you can’t be a participant in the modern economy without power. So number one, that benefits broadly everybody, but number two, it’s specifically important for the most marginalized and vulnerable communities. The folks on the margins, the ones who have high energy bills, the ones who have low income, often communities of color, they’re the ones that get their power shut off the most through these really harsh policies. They’re the ones that take the brunt of the pain from these very large utility companies that are like simultaneously cutting off power to people and increasing CEO compensation. That’s the kind of thing that we can stop if we are more effectively managing the size of the corporations, making them more accountable locally to our state officials, to our local communities.
Stacy Mitchell:
I think that’s absolutely right and one of the things that we said in our comment letter is that the agency should measure success by the degree to which the economy actually de-concentrates. So instead of becoming more concentrated, we want to see industries become less and less concentrated and that’s the key to success. And there’s lots of incredible changes that would happen if that comes to pass. We know for example that in regions of the country and in industries where there are more smaller scale businesses that we see higher wage growth, we see a bigger middle class, less extremes of rich and poor. We also, and we talk a lot about this sociological research in our comment letter, but there’s a whole body of research that finds that communities where there’s a degree of local control over economic resources where you’re not just colonized by Walmart and big outside corporations, but you actually have a local economy that’s controlled locally.
Stacy Mitchell:
That in those kinds of communities there, all things being equal, there are like higher levels of civic engagement, people know their neighbors more, they’re more likely to participate in community events, they even vote more often than people who live in communities that the big outside corporation is the dominant part of the economy. So there’s a ton of upside to actually thinking about how do we decentralize? And you think about in this moment when not only do we have all this consolidation, but we haven’t really touched on yet in this conversation, like our economy is like actually failing, like our ability to buy basic goods and services is like coming to a halt in a lot of sectors and there’s some supply chain issues certainly with COVID, but a lot of, when you start to look, what it is is that we’ve so consolidated production and distribution that we’ve actually got like massive market failures where like just the basic infrastructure of our economy is no longer succeeding.
Stacy Mitchell:
It’s become very brittle. It’s lost its resilience. And so you think about the potential of like a rebirth of businesses and economic activity by controlling corporate power and how beneficial that would be and particularly if we do it right, how beneficial it would be for, as John noted, communities that have been so marginalized by what’s happened over the last 50 years, black and brown communities, rural areas. I mean, there’s a lot that could really come from a concerted like decentralization of the economy policy initiative by the federal government.
Ron Knox:
I’ve got nothing to add. That’s exactly it. De-concentrate the economy and everything benefits, everyone benefits, especially communities and preventing big mergers, big concentrations of corporate power is a great place to start in that process.
Stacy Mitchell:
Also, I want to have a choice about airlines. I live in a small city and like if I want to go to any place, there’s only one option really for me. And just stuff like that is just amazing that we have been living with and tolerating that.
Ron Knox:
And just to put a cherry on that, it’s because of mergers just to make it clear. It’s because of mergers, because of mergers. 20 years ago there were nearly a dozen different national domestic airlines that flew all over the country and could connect smaller places, smaller cities, with bigger places. People had to go for work or just for travel, whatever. Now we have three. One, two, three real like national domestic carriers and then we have a couple low cost carriers that maybe go here and there. And I realize not everyone flies. I realize that an airline ticket isn’t like buying meat at your grocery store, but it all matters. It all matters and it’s all because of mergers.
John Farrell:
But speaking of grocery stores though, I mean, there are so many different ways in which the concentration does affect availability. So we’ve had this like laser-like focus thanks to the sort of like hijacking of our merger policy on the cost of an item, right? So the cost of airfare, the cost of meat, what have you. And yet the problem is availability. So we’ve done research on pharmacies, for example, in North Dakota and found that a robust, independent, de-concentrated economy of pharmacies means there are actually more pharmacies in more places closer to where you live and it happens to be very competitively priced. Grocery stores, right?
John Farrell:
We have these food deserts where people can’t get fresh food because the merged grocery store businesses don’t want to locate in those places, but they’re so big and dominant that there’s no air, there’s no oxygen in the economy to allow smaller groceries in to flourish and to offer those opportunities. You see that in airfare, you see it in cell phone plans, right? Like you go on the internet and it’s like there’s a million different names for cell phone plans, but they’re basically all rolled up as like subsidiaries of the big three carriers and you’re subject to their terms on all of them and all of them cost more than what we would pay in Europe in a truly competitive like mobile phone plan economy. So we have, I think, really good evidence for when markets are competitive we not only get more choice and options and convenience, but we also pay lower prices as well. All of those things are good as consumers that we can get out of this.
Ron Knox:
That’s such a good point. That is such a good point. And one step kind of further, it’s very true that this like merger wave has made the American economy more fragile, less resilient, less able to actually provide all the things that people need. It has made things harder to get. So it’s created food deserts. It’s created places around the country that were once bright and vibrant and like functional places now be essentially Dollar Store and Walmart deserts and so on. But the real impact of this is that you allow these mergers to happen and what that looks like on the ground, the fragility of our economy looks like on the ground, is that you have places like here in Illinois where there used to be a Maytag factory where people earned a middle class living working union jobs.
Ron Knox:
Maytag and Whirlpool merge and suddenly you don’t need that factory anymore. So now not only is the supply chain disrupted, but 1000 people who used to have real good jobs in a factory in a small town in Illinois are lost and they’re a wash and nothing’s coming in to replace those things. And all you have to do is stop the mergers and those twin problems of both harming the overall economy and crushing these small towns, these factory towns, they both stop. And that’s really what we’re trying to get at.
Stacy Mitchell:
I have one last thing on the hopeful note, which is that the fact that we’re having this conversation about merger policy and the agencies are going to rewrite them and this is like back in the news, back in public debate, back part of what everyday Americans are engaged in thinking about and is a very hopeful sign because not that many years ago, the only thing happening around merger policy was happening behind closed doors, controlled by economists and lawyers, very much out of democratic oversight. So that in and of itself is, I think, a really clear sign of the kind of progress that we’re making right now.
Jess Del Fiacco:
Right. And I just want to remind folks who are listening that if you want to dig into our recommendations around these anti-merger guidelines, you can find them linked on the webpage for this episode. Thank you everybody. Any final comments or notes you want to say before we sign off? I know we could probably talk about this for another hour, but we are running out of time.
Stacy Mitchell:
None for me. Thanks, Jess.
John Farrell:
Yeah. Thank you.
Ron Knox:
Yeah. Thanks Jess.
Jess Del Fiacco:
Thanks everybody.
Jess Del Fiacco:
Thank you for tuning into this episode of the Building Local Power podcast from the Institute for Local Self-Reliance. You can find links to everything discussed today by going to archive.ilsr.org and clicking on the show page for this episode. That’s archive.ilsr.org. While you’re there, you can sign up for one of our many newsletters and connect with us on social media. We hope you’ll also take the opportunity to help us out with a gift that helps produce this very podcast and supports the research and resources we make available for free on our website. Finally, we ask that you let us know how we’re doing with a rating or review on Apple podcasts or wherever you find your podcasts. This show is produced by me, Jess Del Fiacco, and edited by Drew [Birschbach 00:40:33]. Our theme music is Funk Interlude by Dysfunctional. For the Institute for Local Self-Reliance, I’m Jess Del Fiacco and I hope you’ll join us again in two weeks for the next episode of Building Local Power.

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Audio Credit: Funk Interlude by Dysfunction_AL Ft: Fourstones – Scomber (Bonus Track). Copyright 2016 Licensed under a Creative Commons Attribution Noncommercial (3.0) license.
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41 min
June 02, 2022 Maps Can Make or Break Communities’ Broadband Futures — Episode 152 of Building Local Power
On this episode of Building Local Power, host Jess Del Fiacco is joined by members of ILSR's Community Broadband Networks team: Ry Marcattilio-McCracken, Senior Researcher; Sean Gonsalves, Senior Reporter and Editor; and Christine Parker, GIS and Data Visualization Specialist. They discuss the importance of mapping for building broadband networks.
36 min
May 19, 2022 Policy Progress and Coalition Building — Episode 151 of Building Local Power
On this episode of Building Local Power, host Jess Del Fiacco is joined by several ILSR colleagues: Susan R. Holmberg, Katie Kienbaum, and Sophia Jones where they discuss ILSR's recent work at the state and local policy level, including dollar store restrictions, New York antitrust legislation, a new model for solar energy, composting and waste reduction in Maryland, and more.
37 min
May 05, 2022 In New York and Oregon, Canning Reduces Waste and Changes Lives — Episode 150 of Building Local Power
In this episode of Building Local Power, host Jess Del Fiacco and Neil Seldman, Director of ILSR's Waste to Wealth initiative are joined by several guests who are involved in the canning community. Canners, also called waste pickers or scrappers, collect recyclable materials such as cans and bottles from the streets and redeem them at recycling centers. The guests are Christine Hegel and Jessica Yauri of Sure We Can, a nonprofit recycling center in New York City, and Taylor Cass Talbott and Kris Brown of Ground Score Association, a ‘peer-led’ initiative in Portland, Oregon, organized by and for workers who identify as canners.
41 min
April 21, 2022Monopolistic Utility Companies Suppress the Use of Customer Data
On this episode of the Building Local Power Podcast, John Farrell, Co-Director of ILSR, is joined by Michael Murray, the President of Mission Data. Mission Data is a national coalition of innovative technology companies that empower consumers to access their own energy usage data. John and Michael discuss how structural market problems prevent consumers from accessing electricity data and possible solutions for utilities to create a more decentralized energy system.
Highlights include:
How energy usage data plays a critical role in lowering costs for all customers.
How monopoly utilities are exploiting smart meter data.
The difference between the U.S. and the U.K. in their approach to using electricity data.
“The usage data is really the fulcrum of the whole system because that’s how the aggregator goes to the wholesale market operator and gets paid for their service and in turn those payments can flow through and part to the consumers who are donating their flexibility and their power usage.”- Michael Murray
“We reward utilities for spending money on capital investment, but not for figuring out how to use it well.” – John Farrell
“How quickly do utilities acknowledge the existence of a problem and actually resolve it? […] I think it’s time for public utility regulators to take up the mantel and really think about themselves as overseers, as a tech support platform – that is an important part of accountability. – Michael Murray
Related Resources
Drone Data Helps a Minnesota City Conserve Energy
How Big Utilities are Impeding Clean Energy, and What We Can Do About It
Transcript
Jess Del Fiacco:
Hello and welcome to Building Local Power, a podcast dedicated to thought-provoking conversations about how we can challenge corporate monopolies and expand the power of people to shape their own future. I’m Jess Del Fiacco, the host of Building Local Power and Communications Manager here at the Institute for Local Self Reliance. For more than 45 years, ILSR has worked to build thriving, equitable communities where power, wealth, and accountability remain in local hands. This week, John Farrell, a co-director of ILSR speaks with Michael Murray, the President of the Mission Data Coalition. John and Michael discuss why clean energy advocates should be paying more attention to the value of customer electricity use data and how we can extract this data from the protective claws of monopoly electric utilities. Without further ado, here’s John.
John Farrell:
Michael, welcome.
Michael Murray:
Thank you, John. I am a big fan of the podcast and very happy to join you today.
John Farrell:
It was such a pleasure to meet and talk to you earlier this year for the first time, and then to get a chance to read your recent report, Digital Platform Regulation, because it really intersects well with the way that ILSR and other folks across the country are looking at this issue of, who controls the platforms that we do business on and who has access to the information about themselves? Some people might think of this in the context of Facebook, as a Facebook user, this company controls a lot of data about you that you’ve given them voluntarily, and then sometimes you’re trying to figure out like, “Wow, maybe I want to cancel my account or close my account. How do I have access to that data? How can I get back my data?” Or you have Amazon, which uses data about the different sellers on its platform in ways that can enhance its ability to compete or unfairly compete with the independent sellers on its platform.
John Farrell:
And then we have the utility business, and this is where I was so pleased to come across your work, because I wasn’t aware that someone had thought through so carefully, not just this idea of access to customer data as something that might be useful, but you’ve really thought through it in terms of, what are the structural market structure problems that prevent us from getting access to customer data? And I feel like there’s some good stories to tell as well. Maybe you could just talk about, in a heatwave or maybe in the Texas freeze context when these big events happen on the electricity system that constrain the system, why does customer data at this point in time matter? Why does it matter if we have access to how people are using their electricity? Why does it matter that customers might have access to their own data about that?
Michael Murray:
I’ll give you two great examples. There was a heat wave, there’s been so many heat waves now in the West Coast, I can’t even remember how many years ago this was, but the usage data from a large number of customers is extremely useful, both for demand side management in these emergency situations, but it’s also valuable for load forecasting. And it’s that load forecasting function which often contributes to blackouts if you get it wrong. So if your day ahead forecast is too low and the demand ends up exceeding that, you’re in a bind as a grid operator, and so there was some evidence on an article written by an advocate for community choice aggregators in California that the time delay that the community choice aggregators had experienced in getting access to large scale customer usage data led to them underestimating their peak usage in the coming days of this heat wave. And so, that actually led to reliability problems and more spot market purchases, which increased costs to everybody, to the system as a whole.
Michael Murray:
So that’s a great example of where there was a disparity or an asymmetry between the utility, the incumbent utility that had much faster access to this data, but then they would sort of say, “Well, there’s these processing delays and we have to run it through these big systems in order to provide it to you.” And that delay of 12 or 24, 48 hours could meaningfully impact your responsiveness on the supply side of things to the power grid. So, that was one example. Another, also in a heat wave context, is there are efficiency aggregators that will save a few hundred watts with one household and a few hundred watts with another household, and you wrap that up into tens or hundreds of thousands of households, and you end up with several hundred megawatts of flexible load on the power grid.
Michael Murray:
And the only way to value those services is with the meter data. So you need to know, what was your usage before the heat wave event? What was the usage after? There’s a little bit of complicated mathematics to calculate a fair subtraction of your usage compared to the baseline. But the usage data is really the fulcrum of the whole system, because that’s how the aggregator goes to the wholesale market operator and gets paid for their service. And in turn, those payments can flow through, in part, to the consumers who are donating their flexibility, if you will, in their power usage. So those are two great examples of where the data on every household measured often at a 15-minute interval plays this really important role behind the scenes in lowering cost for everybody.
John Farrell:
That’s so great. This reminds me actually, I had a great interview with Cisco DeVries from OhmConnect, I think it was last year, where we talked about their virtual power plant. So he’s, and folks should listen to that podcast if they want to better understand this idea of demand response aggregation, which I know is probably three words that most people don’t string together very easily. But this idea that you take a little bit from everybody, a little bit of energy savings from everybody, and you can put it together and you can make it as much as a big power plant.
John Farrell:
And so one of the things we didn’t get into very much, so we talked a little bit about the fact that there aren’t that many markets where you can even do this, where you’re even allowed to pull together these different customers, but it sounds like there’s this other piece of it too that matters, which is even if you had a market for that, you need access to that data. You need to be able to say, here’s how much my different customers are using. Here’s how much energy they’re saving. Therefore here’s how much we ought to be paying them to be providing this service.
Michael Murray:
Exactly. And that’s why it’s so critical that we solve this data portability problem, because we want 100 OhmConnects out in the world providing these services because it reduces the wholesale power costs. It makes so much economic sense, and yet what we’ve seen in many places, even in California which has a number of clean energy credentials, they ostensibly care about distributed energy resources and are trying to help customers on the local level through very generous energy efficiency programs and that type of thing. They still make it very, very difficult to effectively operate as an aggregator, and the access to that usage data has been a litigated issue for almost 10 years. Just to give you a sense of some of the complexities and the arrows that OhmConnect has taken in their back as they tried to pioneer this space.
Michael Murray:
I met one of the founders of OhmConnect maybe in 2013, so some time ago, and they were trying to get, this seems like a simple task, but they were trying to get the California Independent System Operator to agree to treat the usage data that was available on, let’s say the PG&E website. So when you log in to pay your bill, you can view your energy usage history, and OhmConnect was telling the California ISO, “You need to treat the data that is available on the webpage as so-called settlement quality data that’s sufficient for meeting all of the rules and regulations around settlement data at the wholesale market level.” And that seems like a really simple thing, you have energy usage data on the website and shouldn’t you just be able to send that to the ISO and get paid?
Michael Murray:
It was extremely difficult to get that and the utilities introduced all sorts of problems like, “Well, the data that we provide to customers isn’t really settlement quality data. It’s this other rough, raw data that is not sufficiently polished. And so therefore, you can’t take that to the wholesale market.” And every time you start peeling back one obstacle after another, it always seems there’s something else that’s in the way. And eventually we were able to overcome that problem, but let’s just say the system is not designed to help distributed resources get the information they need at a quality and timeliness that they deserve.
John Farrell:
So I want to come back at some point to this issue of what data is out there and this whole process of why utilities have this data and getting access to other parties to provide services that can lower costs for everybody. But before we get into that too much in terms of how data is used or is available or not available, could you just talk about how much more data is being collected these days than it used to be? What’s out there? What are we getting? What information are we getting that we didn’t used to be? And I’m starting this conversation by thinking about the story of the first net metered solar project, which they’d had no idea how they would measure the energy usage or bill somebody, it just so happened that they plugged in the solar panel and this dumb mechanical meter started spinning backwards instead of forwards. And hence this whole policy concept of net metering was born.
John Farrell:
But at that point, all we could collect really was how much energy is used in total on this meter over some period of time. So if I look at the meter today and then I look at it tomorrow and then I just do some subtraction, that was as sophisticated as it got, and the utility would literally go out and read the meter, a person would be sent to read it. Well, we’re a lot more sophisticated these days. What are we collecting out there? What are utilities collecting in terms of customer usage data and how could we be using that?
Michael Murray:
I think you’re being generous, John, in saying that utilities are much more sophisticated now than they were a few years ago. So a couple of things have changed since those electrical, electromechanical meters were widespread. The first is that we have so-called smart meters, and I put big air quotes around those. They’re not particularly smart, they have two core functions. One is to read consumption or the back feed, if you will, if it’s a net meter with solar feeding back into the grid every 15 minutes. Some states it’s once an hour, some states it’s 30 minutes like in Illinois. So there’s different measurement intervals, but just generally less than an hour.
Michael Murray:
And the second function is those meters communicate it over a radio network that’s sometimes proprietary back to the utility for billing purposes and this allows the utility to fire their meter readers. So, instead of having a person drive around in a van and go into your backyard and read the meter, they could lay off all those people and just solve the problem with a radio network instead. And that was sort of advanced metering infrastructure, AMI 1.0 you might call it. To date, there’s upwards of about 100, maybe 110 million of those meters that are deployed across the country. So it’s fair to say that the majority of American homes and businesses now have a so-called smart meter version one on their house or their business.
John Farrell:
We have a less dumb meter, is what you’re saying, it’s not really a smart meter yet.
Michael Murray:
Exactly. It’s less dumb, and to give you a sense of the dumbness, a lot of these meters came baked in with a second radio that was designed for local communications so that someone inside their home could get a sense of their real time power usage. And this was part of the vision, a somewhat techno utopian vision of smart meters that was put forth 10, 15 years ago. And in some states, those are turned on. Those radios are turned on and customers can actually use the information. Sometimes it’s broadcast every five or seven seconds, and so you could walk around your house and turn things on and off and get a very instinctive sense of what is using power. And it can be very, very useful for people who often don’t have a sense of watts and does their electric cooktop use more than their hot tub or their heat pump or whatever? So, there’s certainly some educational value to that.
Michael Murray:
What’s been frustrating for me, and other DER aggregators, is that it has been extremely difficult for utilities to universally enable that capability. So there are states where customers have paid for this meter, it’s referred to as the home area network, but the utilities refuse to turn it on. And so this is the case in Washington, D.C. where the smart meters have been deployed for probably 12 years or so, and even to this day, despite a lot of clamoring from individual customers, from businesses, from the Washington, D.C. municipal government, Pepco still will not turn on the home area network radio for being able to use it for energy management purposes. So, it’s a big frustration and that’s the state of the US today, it’s a patchwork. Some states, like California, you can access the home area network, but then there’s other places in Maryland and in Washington, D.C., parts of Ohio where you can’t use it.
John Farrell:
I’m just really curious about this specific example with D.C. So the meter hardware has this radio that allows this capability of home energy insight. And I feel like I’ve probably seen some of these glorified commercials or whatever of somebody having some device on their kitchen countertop that’s telling them like, “Here’s what’s using the most energy in your house,” so I’m sure we’ve all seen something like that, those of us who work in the field. Obviously we don’t think people are going to sit around just gazing at that all day, but there are some pretty interesting potential uses.
John Farrell:
I’ve heard, for example, some electric co-ops that have smarter meters will actually call customers themselves or munis, I think this was in Tennessee, for example, Chattanooga, one of the pieces of their smart grid rollout was that if somebody’s energy use spikes, they’ll call the customer proactively and say, “Hey, by the way, did you know your energy use has been spiking over the past few days? If you haven’t been doing something different, you may have a faulty something or other, and if you need help, we can help.” So it’s really funny to think, funny, it’s not funny, it’s disturbing to think that we’ve all paid for this technology, we’ve paid for this hardware as a customer of the utility, to be installed outside of our home and yet we can’t use it.
John Farrell:
So what’s going on in D.C.? I don’t know if you have more detail about D.C. in particular, but why wouldn’t they want to turn this on? What’s the problem?
Michael Murray:
You’ve begun to ask the question of, why don’t the utilities want to play ball? Why don’t they want to empower their customers with their energy data? And there’s rhetoric and then there’s reality. And it’s kind of like peeling layers of an onion. There always seems to be some excuse or another, “Oh, there’s cybersecurity problems. God forbid someone is able to access the energy usage of their neighbor, and therefore violate their neighbor’s privacy.” For example, that’s one of the arguments that they put forth. That sounds like it would be concerning if you care about privacy. The fact is that that’s almost impossible to occur as a technical matter. The meters have a cryptographic key that’s installed on them that ensures that only devices that are approved by the utility can, in fact, communicate with that individual meter.
Michael Murray:
So you hear cybersecurity concerns. You hear concerns about cost. This is, I think, ironic because the utility has no problem billing customers for the hardware that enables this capability, but then when it comes to actually turning it on, they say, “Oh, this would cost too much money. We might have to have skilled call center representatives who need to walk our customers through the device connection process to their meter and there’s a cost there. And it just would be unfair to put the costs of this enablement on all customers, even though only a small number of customers might use it.” So that’s another argument that we sometimes hear.
Michael Murray:
And it’s frustrating because it’s the classic incentive mismatch where the utility wants to deploy, they want capital expenditure, and they want it in the rate base, but then when it comes to actual using the meters for what they were designed for, they say, “Oh, well, we couldn’t possibly do that.” Or, “Our IT systems can’t handle it.” And that sort of thing. So we’ve been circling around that in Washington, D.C. for a number of years. I will say that the meters that Pepco has in Washington, D.C. are exactly the same meters that Pacific Gas and Electric has, and PG&E has been enabling the home area network since probably 2013 or 2014. So we know it can be done, it can be done securely, it can be done on a large scale, this is a solved problem, but some utilities just don’t want to embrace that.
Jess Del Fiacco:
We’ll get back to the show after a very short break.
Jess Del Fiacco:
Thanks for listening to Building Local Power. If you’re enjoying this episode, I hope you’ll consider heading over to archive.ilsr.org/donate to help support our work. Your donations not only make this show possible, but you’re directly supporting our work in energy democracy and beyond. You can head over to archive.ilsr.org/donate to contribute today. Any amount is appreciated, but if you can’t donate right now, I hope you consider supporting us by rating or reviewing this show over at Apple Podcasts or wherever you find your podcasts. Your reviews make a huge impact in helping us reach a wider audience. Thanks again for listening, and now back to the show.
John Farrell:
I really think it’s great that you’ve highlighted this issue about the financial incentive though, because what I hear you saying essentially is because of the way we generally allow utilities to profit, regulated monopolies to profit, it’s by building something and earning a return on it, expending capital. So they can make a profit on selling you an expensive meter that they can stick on the outside of your house, but if it costs money to run that meter, whether it’s through tech support or advice that they have to develop on the website, they don’t necessarily earn the same profit on that because it’s not in the rate base in the same way. So there’s not as much of an incentive to actually make good use of this.
John Farrell:
I feel like this is the same, this is the corollary to the whole fight we have about power generation right now, right? So advocates are saying, “Don’t build new gas power plants. In the long run, you’re not going to use them because either your state has climate goals, it’s going to reduce your ability to use that power plant, or simply it’s going to be uneconomical because as the prices of natural gas, methane gas have gone up so much, it’s no longer as competitive with renewable energy resources.” And so as another example of stranded asset, except this time it feels like it’s on purpose. It’s to say, “Yeah, we really just wanted to put the meter on your house to make the money, but we don’t really intend to use it.”
John Farrell:
So obviously that’s, I mean in terms of implications here though, what’s happening is that we’re spending a lot of our money collectively, the utility is spending this money for us, regulators are approving it and saying like, “Yeah, this is a great idea.” And then customers are essentially not getting to tap into the advantages, whether it’s for the individual customer who could maybe participate in some market where their potential to help save energy could benefit everybody, or we’re not taking advantage of it because the utility has to go out and build more resources to meet energy demand that we could be addressing if we collectively shared this information.
John Farrell:
So, one of the things that I’m interested in talking about a little bit here is I really love essays that are written by Scott Hempling. He’s now an administrative law judge with the Federal Energy Regulatory Commission, but formerly did, as a litigator and attorney, a lot of work on utility mergers and utility market structure. And he talks about this idea of what he calls unearned advantages, and specifically the things that a utility has simply because it’s the monopoly, because the government has said, “Here’s a public franchise. You will have no competition. We will regulate your rates, et cetera.”
John Farrell:
So as the incumbent, utility, just because they are the utility, because they read your meter, because they provide that customer service as the monopoly, they have access to data about your energy usage and what they’re essentially saying is, even though we didn’t earn that right to have your data, we didn’t do anything special, we collect it because it’s part of our business. We are using that as our competitive advantage against these other people that might want to do stuff. So we want to do a power plant and OhmConnect says that they could do the same thing for less money, well OhmConnect, because we can restrict their access to the data, we can keep them from competing with us in the field of power generation.” I mean is that what you’re seeing happening here? Does my description of unearned advantage capture what’s going on here with the data?
Michael Murray:
Exactly. I would add a little bit more color to it. I think, so stepping back in smart meters really fulfilled this role, this important role in utility capital expenditure that economically was threatened with the deregulation and the forced divestitures of generation, going back to the early 2000s. So there’s a lot of utilities that were forced, like in New York and to some extent, California, were required to divest of their power generation and utilities, I think, reacted very thoughtfully and strategically to that in part by saying, “Well, we’re not going to be able to make money as reliably on power plants,” this is only true in certain states, not all states. “And so how are we going to grow? How are we going to tell Wall Street a story about up and to the right goes our profits and dividends over time and so forth?”
Michael Murray:
And so they said, “Well, we need to invest in the distribution system.” And smart meters became a critical part of providing value, and it provided a CapEx opportunity that was arguably lost with power generation getting deregulated. What’s interesting is that utilities often don’t have the real digital capabilities in house to be able to use smart meters to their full potential. So there’s a new generation of smart meters, which maybe we’ll talk about in a second that provides a lot of opportunities for understanding where power’s being used in the home, and that requires a lot of data science and scale with managing data that’s provincially traditionally been within the scope of the tech sector, not really the monopoly utility world.
Michael Murray:
And so on one hand you have utilities saying, “Well, we have to be the generator of this energy data because we bill you for it and it’s essential part of our system.” But on the other hand, they don’t really have the capabilities, even though they might have the ambitions, of exploiting it and using it in a way that’s maximally valuable. And so I would say that I agree with what you said, John, but I think there’s a capability aspect in addition to the mismatch of incentives and it results in some frustrating results.
Michael Murray:
So for example, there’s some utilities that are sitting on lots of smart meter data and have not been putting it to use, but then when anyone else tries to go to them and say, “Here’s how we’d like to help you target your energy efficiency programs better using our mathematical prediction models. Here’s how we can deliver better load aggregation services, whatever it might be,” then the utility say, “Well, no, you can’t do that because of cybersecurity or privacy or this or that.”
Michael Murray:
And so on one hand, they know that the smart meter data’s valuable, but they really think it’s their exclusive right to exploit it. And so even though they really may not have the capability of following through with it, they end up boxing out some of these other entities that have, even with customer permission. So this is where mission data gets involved, because we’re always advocating for permission based exchanges of data. And so this is not the case where we’re asking for wholesale copies of the utility database just to go on a phishing expedition or to market products and services to customers. That’s not what we’re talking about. We’re talking about an individual customer gives their permission to a solar installer or to a demand response aggregator or an energy efficiency company, and it is the utility’s job, as a steward, to deliver that in a standardized, rapid, simple way. And that’s where the utilities say, “Let’s hesitate. Let’s draw this out several years so that we don’t have to face the music.”
Michael Murray:
And they’re afraid of what ultimately underlies a lot of the resistance and delays on the part of utilities to enabling data portability is, I think, an anti-competitive impulse that they really see this as theirs to exploit and they don’t like the idea of any other company doing a better job at using customer data and delivering useful services for people. To your example, John, that could be high bill alerts. So utility may have a rightful natural monopoly on a meter, it only makes sense to have one meter on the premise. That seems reasonable enough. But what about the digital services that are possible from the data collected? What gives the utility the natural monopoly over that? Things like energy disaggregation, where your power’s being used in the home based on analysis of trends, is that a monopoly function? I don’t think so.
Michael Murray:
And so to your point about unearned economic advantages, this is definitely a case where utilities want to be able to be the only provider of these insights about your energy usage, and that creates a market asymmetry for the companies that we work with that are really, really trying to do some interesting things with energy data analysis.
John Farrell:
I feel like we’ve actually covered a lot of different ways in which this sort of system that we have is problematic. So you have the mismatched incentives for the utility, right? Generally speaking, we reward utilities for spending money on capital investment, but not for figuring out how to use it well. So we’ve got this problem where utility rationally, as a utility manager, I’m rationally saying, “Let’s do smart meters,” but I’m also rationally not really concerned with whether or not it can be used well, which is funny because it’s not only do I not make money while doing that, but I’m also not really talented inherently at doing it, so it’s like the worst of both worlds, right? I have no idea how to use smart meter data, and I also don’t care.
Michael Murray:
Exactly. Exactly.
John Farrell:
And then you have this combined with the fact that the utility has access to this data as the result of this publicly granted franchise, not because of any merit, they haven’t proven to us, “We are the best holders of the data about energy use, because we will use it the most effectively.” They just have it because they’ve always had it, because like you said, it does make sense for them to be the only company that installs a meter on your house, we only need one of those, but they don’t have any particular advantage that they’ve shown, any competitive advantage they’ve shown in how that might be used. In fact, it’s the complete opposite. As you say, when people come and say, “Hey, we think we have ways we could use this data to serve customers better,” the utility is like, “No, let’s actually stop them from doing that.”
Michael Murray:
Exactly. And there’s a variety of techniques to stopping those entities from doing it. One is just a brick wall, “We’re not going to talk to you. This is our data. We’re not going to share it with you.” There’s some other tactic, like cybersecurity. So they’ll say, “Well, we couldn’t possibly share this data with you, even though the customer wants us to, because you might have a cybersecurity breach and we spend hundreds of millions of dollars a year on cybersecurity and you probably don’t spend that much.” And so therefore you’re a risk. And they plant that seed of doubt in the regulator’s mind who then becomes hesitant to create what they might see as a cybersecurity vulnerability in their jurisdiction.
Michael Murray:
So, there’s all sorts of tactics to delay the inevitable, but I will point out, the United Kingdom has thought about this a bit differently. In the UK, there’s one meter on each premise, but the data doesn’t go to the distribution utility, it goes to a centralized authority called the DCC, the Data Communications Corporation I believe is what it stands for. And from there, it’s available to the retail suppliers for billing, and it can be available to other third-party aggregators at that point as well.
Michael Murray:
And so, the British are very, in many ways they invented deregulation with Thatcher in the 80s and the national grid was split up into different segments. And so that’s an interesting way of thinking about how to structure the industry. So we take it for granted that the utility has to own the meter and the data that’s generated from that, but that’s an assumption. I think the empirical evidence, as you suggest for utilities being the best, most capable users of that information is certainly up for debate.
John Farrell:
I would love if you could talk a little bit more about, this is a perfect segue, I was just going to ask you about if there was a place that was doing this well. Are there specific examples of things that are happening in the UK market because the utilities don’t have a monopoly on this data granted to them by the government? And also are there examples State side where we’re getting it right, where maybe we’re not doing the exact same thing, but where we are making sure that data is getting out there and allowing competitive activity in the marketplace to lower cost for customers to make the grid run more efficiently, to encourage renewables, what have you?
Michael Murray:
There’s a great example in California with a community choice aggregator called Silicon Valley Clean Energy, or SVCE, the acronym is a bit hard to muddle through that. Silicon Valley Clean Energy is owned by the community. They’re a governmental organization. And if you compare how they provide customers with access to their own energy data with that of PG&E, you start to see some important differences. Now, I will say at the outset, PG&E has generally done a good job of providing data portability. They were one of the first utilities to adopt the green button standard, but nevertheless, the pace of improvement has been much slower with the investor on utilities, as compared to the CCA’s.
Michael Murray:
So Silicon Valley Clean Energy decided not to build their own data portability infrastructure from scratch, like PG&E did. SVCE hired a specialist called Utility API to be the software company that provides that exchange between the utility and numerous distributed resource companies. And Utility API has a lot of experience in this realm, they know how to serve the needs of the distributed energy community, so they know what the needs of the solar salesperson is who is trying to generate a price quote for solar and potentially a battery system with a net meter 2.0 customer in Southern California. And they know what an energy efficiency provider needs to sell heat pumps and help transition a customer off of natural gas heating to a heat pump in Massachusetts.
Michael Murray:
And these are skills that utilities often don’t have. And so to give you a sense of the variation in a place like Chicago, Illinois, where ComEd has offered their green button system for several years, to date there’s only something like three companies that are actually using that system for a variety of technical challenges and failures on ComEd’s part. And yet, at Silicon Valley Clean Energy, within weeks of them announcing that they were providing this data portability system, there were dozens, I think it was more than 50 companies who actively started using it, serving the large commercial customers and the residential customers.
Michael Murray:
And now there’s even an electric vehicle, a load management tool that’s extremely customer friendly where all the customer has to do to charge their electric vehicle at the optimum rate is just to share their energy usage from Silicon Valley Clean Energy to a smartphone app that coordinates with their electric vehicle charger and automatically has their vehicle charged at off-peak times and it selects the right rate that’s appropriate for them to save them money. And so this is an innovation that happened very, very quickly, and you compare that to some of the investor owned utilities and the pace of change and iterative development is just much, much slower.
John Farrell:
It’s probably worth noting that ComEd, which serves Chicago in Illinois, probably has something like 2 or 3 million customers, and Silicon Valley Clean Energy probably has in the tens of thousands. So the fact that there are 50 companies already using their platform versus three with ComEd in Chicago speaks volumes about on a per capita basis how useful that system actually is.
Michael Murray:
That’s right. And some companies have been trying to get the ComEd system to work. It’s ostensibly a green button standardized system, and what I hear is it’s just a slog. There’s technical problems. There’s unexplained errors. There’s bugs in the system that don’t get fixed. And so it really tests the resolve of these companies to continue working with ComEd, in some cases over the course of many years, to get the system working. And I think a lot of people don’t appreciate the level of effort that goes in on a third party’s perspective to make this work. They’re really the guinea pigs. They’re testing the software that the utilities often fail to test. They’re identifying problems that, sadly, a lot of regulators don’t pay that much attention to.
Michael Murray:
And so this is what my paper that we issued about a year ago on digital platform regulation was trying to address, it’s thinking about utility regulator, not as just a rate setting authority over polls and wires, but as we enter a digital age, they have to become savvy regulators in a digital context, and that means holding utilities accountable for when their IT systems don’t perform very well. And just to give you an example, even California, which has aspirations to have a plug and play DER, high DER future, California has been sitting on allegations of data failures on the part of Southern California Edison for more than two and a half years. There’s a company that filed a formal complaint with the commission. They identified numerous alleged failures on the part of Southern California Edison. I’ve read the complaint, it seems very credible to me, and the only action that the Public Utilities Commission has taken to date is to grant themselves extensions on the statutory deadline to have the matter resolved.
Michael Murray:
So, we’re now 2.5 years into getting resolution on some major technical failures and it just doesn’t seem like the regulators have the capacity or the will to take on this challenge.
John Farrell:
It’s interesting to think about a comparison of another market. If you had a pothole in your street for two and a half years, the kind of rage and attention you could get to that as compared to this, when you have a digital pothole in access to data and the utilities just like, “Oh, we’re just going to take a little longer.” I just, I can’t imagine. And I think people would have a different sense of the expectation, but it’s really the same thing, right? The road is the way by which we can transact and move around and interact with so many people, right? Whether we ride a bike or drive a car or whatever, it’s how we connect to other people. And the data about the energy system, about the electricity system is the same thing. It’s how we’re going to be able to connect and interact with and exchange value with other people in a 21st century electricity system.
John Farrell:
And yet regulators are letting it be littered with potholes by the utility, and it’s deliberate potholes maybe. I mean we’ve kind of described here, I think really well, the fact that we have an incentive problem, we have an expertise problem, we’ve got a anti-competitive instinct problem. There’s so many reasons there are potholes, but the problem seems to be in general that we continue to allow there to be potholes.
John Farrell:
How do we fill the potholes? I wanted to ask you before we have to wrap up, what are some of the things that we can do? Maybe some things from your digital platform regulation paper, recommendations you might have for utility regulators, for legislators, how do we make sure that we can get the best and most efficient and most cost-effective energy system by making sure that this data about this isn’t just locked up in this concept of utility monopoly?
Michael Murray:
It’s a great question. So there’s several things. The first is, I think it’s incumbent on utilities to hire experts who actually know how to build these systems and they know how to operate digital platforms for the use of distributed energy resources. That sounds obvious and yet, we see a lot of examples of utilities that have decided to build their own system and they have clearly indicated just a lot of challenges and high costs and a lot of frustration on the part of distributed energy resource companies. And so in this area, I’ll give a shout out to National Grid in New York. They hired the company called Utility API that I just mentioned, and it’s a similar story where they had a strong number of third parties express interest in using their system, much more than their neighbor to the south, ConEd, or Consolidated Edison in New York City. So there was an understanding, I think, among the IT and leadership teams at National Grid that they needed to know the limits of their expertise and hire a firm that could do a good job. So, that’s the first thing.
Michael Murray:
The second thing also sounds really simple, but it’s really important, and that’s a bug tracking system. So if you’ve ever filled out a technical support request for your internet service being down or something like that, they create a ticket and that ticket works its way through the technical support system, it might get escalated if there’s higher levels of expertise that are involved. Many utilities don’t even have a trouble ticket system. They rely on email that many of them do not have phone calls. They’re giant corporations and they don’t want you to have anybody’s individual phone number, and so we hear stories from companies that we work with that have submitted support requests and they’re waiting months to get an answer.
Michael Murray:
Basic things like, “When I hit this web server, I should get a response and I’m getting an undescribed error. I can’t move forward until you fix this,” and then nothing happens. And many of the energy companies that are trying to serve customers, they’re entrepreneurs, they’re innovators, sometimes they’re really small firms, and they’re not going to challenge the utility in a formal context. They don’t want to bring a formal complaint against the utility, they don’t want to make a lot of noise with the regulator or with politicians because there’s a fear of retaliation. And so having a trouble ticket system that’s transparent in which the utility regulator gets to see, what is the response time on average to a ticket? How quickly do they acknowledge the existence of a problem and actually resolve it?
Michael Murray:
This is for any customer support organization, we had this figured out 20 years ago, but I think it’s time for public utility regulators to take up the mantle and really think of themselves as overseers of a tech support platform. That’s an important part of accountability.
John Farrell:
Michael, thank you so much for diving into this issue of data access. I think it’s an area in which a lot of folks who care about a clean energy future don’t really think about. There’s so much focus on this broader issue of, how do we force the utility to do something different? How do we pass a mandate for clean energy or for community solar or for distributed solar? And I feel like we’re increasingly getting more attention to these back office things, but they really need a lot more attention.
John Farrell:
And especially because it really gets into this issue that we’re starting to explore more broadly across our economy, which is when big companies have so much power over the systems that operate our economy, whether it’s retail online, shopping with Amazon, whether it’s Facebook and the way that we interact with other people, utilities are in that same role and in a space that is going to become so important as we electrify things in our economy, I mean electricity is already the backbone of our economy, it powers our phones and computers and all these other things, but it’s going to become even more important. So, thank you so much for the work that you do trying to expose the problems with access to data. We’ll be delighted to share more of the work that you’ve been doing on our show page, just really appreciate you taking the time to talk with me today.
Michael Murray:
Thank you, John. It’s been my pleasure and thank you for bringing some attention to these issues. I like to say that this is the plumbing that’s really behind the scenes that a lot of people don’t want to think about, but as you say, it’s critically important to realizing the vision of a clean energy future and thank you for spending the time.
Jess Del Fiacco:
Thank you for tuning in to this episode of the Building Local Power podcast from the Institute for Local Self Reliance. You can find links to everything discussed today by going to archive.ilsr.org and clicking on the show page for this episode. That’s I-L-S-R.org. While you’re there, you can sign up for one of our many newsletters and connect with us on social media. We hope you’ll also take the opportunity to help us out with a gift that helps produce this very podcast and supports the research and resources we make available for free on our website.
Jess Del Fiacco:
Finally, we ask that you let us know how we’re doing with a rating or review on Apple Podcasts or wherever you find your podcasts. The show is produced by me, Jess Del Fiacco, and edited by Drew Birschbach. Our theme music is Spunk and Delude by Dysfunctionale. For the Institute for Local Self Reliance, I’m Jess Del Fiacco, and I hope you join us again in two weeks for the next episode of Building Local Power.

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45 min

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Building Local Power brings you thought-provoking stories and new ideas for breaking the hold of corporate monopolies and expanding the power of communities to chart their own futures. We deliver insights from trailblazing lawmakers, scholars, business leaders, and advocates. Plus, conversations with in-house experts at the Institute for Local Self-Reliance help reveal the patterns and policies that shape our economy and communities. These stories and conversations help map solutions that distribute power to everyday people.