Monday, July 13, 2009

Conway’s Law of Big Energy

Arizona Thought BoxThe most recent long-term resource plan from Arizona’s largest electricity provider, Arizona Public Service (APS), begins with a plea for absolution.

Not only is the Resource Plan chinless, it is also a stale, unimaginative and uninspiring vision with myopic horizons. It is as if one of Arizona’s largest corporations — a company that enjoyed $3.5 Billion in revenue last year — is pleading not only for absolution, but for inspiration. When your CEO is paid $8 million in a single year, one might expect that some inspiration and leadership would be generated.

In the second paragraph of the Resource Plan, the utility proclaims an eleventh-hour awakening to the value of energy efficiency and renewable resources; and then makes a somewhat timid request, “to preserve the option for potential future development of a new baseload nuclear resource.” How many pacifying qualifiers does one sentence need?

The second paragraph’s final sentence disparages what have long been the utilities' favored toxic fuels: coal and methane. The disparaging statement about coal is revealing, “APS believes that the risk of future climate change legislation and the potential for significant resulting cost increases make the acquisition of new coal resources unattractive at this time [emphasis mine].” Please notice that the company’s concern arises from the risk of cost increases due to legislation, not from the risk of global warming itself.

Before detailing the Resource Plan’s primary components, growth projections are given that match those projected here on Rate Crimes. The first component listed is, “Increased energy efficiency programs … because they are cost effective, reduce environmental impacts, and provide a means for customers to manage their usage and costs.” While this is an admirable statement of fact, it stands in as stark contrast against the reality of the long-standing, repressive rate schedules as does their second component, to “accelerate acquisition of renewable resources”.

The third component listed is “baseload power.” They define this power as, “energy that is available 24 hours a day, 365 days a year.” The utility claims, “there are currently two options available: coal and nuclear.” However, having disparaged coal, there would now appear to remain only a single “option”. But is even the leftover option of renukeable energy viable? The resource plan leaves it to us to ponder that question.

The Resource Plan neglects three critical points: First, in great part, the long-standing policy of rate schedules that repress solar energy and energy conservation is what has led to an inordinate need for further “baseload power.” Second, a single coal or nuclear generating unit cannot meet their definition of “baseload power”. Even an expensive plant of multiple generating units is at risk for failing to meet this demanding and problematic standard. The previous point regarding redundancy hints at the third point. For “baseload power” there is, at least, a third option: superior distributed network design.

Within the framework of distributed network design, their third component and their fourth, “peaking power”, merge into one.

Because central generation has so long appeared to be the easy solution, gargantuan organizations have agglomerated around the colossal generating plants. The thinking within these distended organizations naturally petrifies to where the world is seen predominantly in terms of colossal generating plants that promote further expansion of the organization, ad infinitum: a self-perpetuating version of Conway’s Law.

Conway’s Law

Organizations which design systems are constrained to produce designs which are copies of the communication structures of these organizations.

No matter how many extraordinary engineers such an organization might employ, the institutionalized professional deformation and the contingencies of daily operations result in the viewing of energy delivery challenges as a problem of resource acquisition.

Let there be no doubt: The utilities, the Commission, the Legislature, the Governor, and all citizens will soon experience unprecedented stresses in preparing for Arizona’s future energy demands. However, the problem of energy in Arizona goes far beyond the issue of energy generation; and is beyond the purview of the Arizona Corporation Commission.

Abandoning the sun for far too long was bad enough. Allowing a sprawl of poorly-designed, poorly- constructed, and tragically temporary structures to proliferate in a desert is epically criminal. It is hard to plead ignorance as a defense when clarion calls for sustainable solutions were being made a half-century ago.

The challenge that must now be met is not so much a resource acquisition problem as a systems design problem. Returning to Conway’s Law, the appropriate systems that gather and share energy must be reflections of appropriate organizations and political systems.

No one appears to be considering this underlying issue. The APS Resource Plan abdicates. The ACC is chartered to regulate, not to create policy. There are people in the legislature whose understanding is so meager that they would promote nuclear energy as somehow being renewable.

It is very possible that the system that brought us to this juncture is incapable of extricating either Arizona’s citizens or itself. There can certainly be no absolution.

It will be difficult to repair the damage done by decades of mismanagement. We can now choose to continue this tradition and send compounded costs to the future, or we can accept the burden for ourselves.

The first step must be to free the market from repressive rate schedules. Just as immediately, rigorous and mandatory building standards must be established with adequate monitoring and enforcement. The third crucial element is to design, develop and deploy a distributed energy network. The monitoring capabilities must be part of the rapid deployment of this system. These are all things that should have been initiated at least a decade ago. With Arizona’s solar resources, the knowledge in it universities, and its expertise in solar energy, the state should long ago have been the birthplace of the modern, distributed, sustainable energy network.

But before this network can be created, the system that can create this network must be created.


  1. Given your incisive assessments of ASP's shortsighted and pathetically conventional approach to providing energy (as your graphic aptly illustrates), as well as its feeble attempts at disguising itself as forward thinking, what is your prescription for wresting away its grip on a complacent public? Or, tropologically speaking - Are there any audacious and accurate shepherds out there to fell such a Goliath? Or will it take a corps of St. Georges, spawned at your ballot boxes to harness the beast? You eloquently and justly deride the emperor for having no clothes. How do you propose he be rebedecked? Or (more apropos of the theme of this blog), how shall we reclothe our fairytale characters of Genesis in their garments of light?

  2. Perhaps one begins by establishing a meme? Before my article on solar electricity as an investment vehicle was published in 2004, nearly everyone spoke of solar's economic benefits in terms of "simple payback", even though such numbers were not very attractive. Now, it seems as if everyone is using the idea of "return on investment" to market solar. I believe this meme already existed when I performed the economic analysis and published the results earlier this decade.

    All stakeholders should have a keen interest in ensuring that the electric utilities are eminently and inherently flexible. The utilities cannot simply be responsive. If they remain limited to being only such, then unforeseen events may find them inadequate, and abandon them as obsolete. As they now exist, it appears as if they identify themselves too much with, and model themselves too much after the behemothic generating plants they propagate.

    Planning should include strategies for structuring the utilities in order to optimize flexibility. Not only are the utilities too rigid in structure and thinking, but so is the system that regulates them. At the very least, planning should exist for the possibility that the system may have to serve a community that no longer experiences the type of growth that has prevailed to this moment.

  3. It's doubtful that even the most mesmerizing meme, mobilizing massive matriculation to its membership would yet be enough to effect the kind of change you desire. In that repect, the notion strikes me a little like Joshua and his mythical assault on the ancient city of Jericho.
    It seems to me that only some type of Barnumesque advertising blitzkrieg or imperial coercion from Barack and Co. will be enough to wholly superimpose the necessary paradigm (in any timely fashion, at least). But what do I know? I'm just some guy from east-central Illinois who used to play in a second-rate cover band, grateful to have finally merited a response.