David and Goliath in Bronzeville or BUD v Com Ed

David  and Goliath  in Bronzeville or BUD v Com Ed
The bigger they are.

Full disclosure-

The author of this blog is a founding member of the not for profit discussed herein.

There is a teeny-tiny grassroots not for profit in Chicago specifically dedicated to economic and sustainable education and development in the Bronzeville community. This is the “David” of the story. On the opposing team is “Goliath” or more specifically the utility monopoly, Commonwealth Edison. This story is one you won’t see in major newspapers but maybe you should.

Somewhere around 2003 two Bronzeville seniors (me and my husband) started thinking about a way to utilize the rail embankment running through the area. The structure was part of the system that once took cattle and people to the Chicago Stockyards. Since the mid 1970’s it stood there as a home for raccoons, weed trees and some incredible murals but no rail travel.

Some people in the community wanted the structure demolished. Unfortunately the price tag for that was up in the millions. Some people suggested a walking trail similar to the 606 but some local home owners were opposed considering the impact on real estate taxes, i.e. increases that might force local, long time property owners to be displaced. Others opposed loss of privacy since the trail would pass by the windows of private homes of which many had spent considerable amounts of money renovating turn of the century mini-mansions back to single family homes from tenements and apartments. There had to be a use and we were determined to find a way to make what some called an “eyesore” an asset. We came up with an idea that we  took to Illinois Institute of Technology through a program designed to further entrepreneurial ideas from the grassroots of Bronzeville.  Thus was born the idea of Bronzeville Urban Development of which I am a founding member.

We two seniors (my husband and I) studied with Al Gore in the Climate Reality project and filed for not for profit status. We put a board of directors together. In the intervening years we discovered that a simple community solar project was not sufficient. It’s harder to fund a small project than it is to get something in which investors can sink their teeth. The answer was to morph from a 2 mega watt (MW) solar farm to a 20 MW microgird, utility scale project. The question was is it feasible?

In 2017 BUD took that question to IIT via the inter-professional project or IPro. The IPro pairs students and entrepreneurs/ community members to look at projects and technology. The IPro teams work with professors, local experts to explore the proposed projects. The team worked with one of the largest privately owned engineering companies to do the research. Not only was this feasible it was deemed an ingenious use of vacated rail embankments. BUD had a winning idea. It could be replicated nation-wide. What was even more important for BUD was that it addressed the democratization of utilities. (More in-depth information on democratization of utilities. Put simply that is allowing the public to own their own energy resources. BUD members thought here is a chance for people, community members to invest in their future through crowdsourced means.

BUD did further research and team members thought it appropriate to visit Com Ed with the idea of working together. Enter “Goliath”.

Com Ed had proposed the installation of five microgrids in the state of Illinois. Those microgrids would be paid for by the rate payers, that is the customers. The benefit to the customers was questionable, especially for rate payers not in Bronzeville. The idea was vetoed but Com Ed is again applying to the Illinois Commerce Commission for permission to charge rate payers for at least one microgrid in Bronzeville. A decision by ICC is due in mid February.

In case you haven’t heard of microgrids here is a link to briefly explain. This also explains why the BUD team set down with ComEd. ComEd is supposed to be in the business of distributing energy. They own the grid. Importantly also is ComEd is not supposed to be in the business of generating energy. Microgrids generate so it seemed appropriate to sit down and discuss how we work together. ComEd didn’t much like the idea.

The reasons for why this is not in the best of interest of ComEd are many and not to be covered in this blog. It’s primarily disruptive of their monopoly.  Suffice to say on September 7, 2016 we had our first meeting with Com Ed and outlined how we thought we could use the land we had for solar panels and the stations on that land to house batteries. The land was only a block from the proposed Com Ed microgrid installation. We also suggested that a vacated sub-station (out of use since 1949) immediately adjacent to BUD land and on the historic watch list might be a great place to put a center for microgrid, renewable energy and sustainability education.

There may have been as many as 12 people from Com Ed sitting at that conference table and none of them looked too happy. In fact, Goliath was not having any of it.

Since then Com Ed has not made any overtures to discuss this with us. What they have done is marshal all their resources to influence courts, politicians and everyone else that they, Com Ed should be allowed to enter into the generation business and bill the rate payers for the privilege. Recently they have made some concessions that would suggest that they would take bids from renewable energy third party generators. That doesn’t remove them from the equation of generation. I hate to sound skeptical but it also would open the door to what might be some questionable practices of choosing generators. Why not let this little not for profit build a microgrid?

Good question since the two are not mutually exclusive. BUD wants to lease the land to a cooperatively owned entity to be created that will allow small investors via crowdsourcing, angel and patient capital investment including program related investments by major foundations to build this puppy in Bronzeville and provide the kind of visual excitement that an urban solar farm would bring to Chicago’s south side not to mention putting brownfield to good use for renewable energy. BUD would work with the new entity to provide public education and to work with low income investors from the crowdsourcing pool on investment procedures and the importance of investing for generations to come. BUD has its first customer in line, the Natural Resource Defense Council. That’s pretty good for a little not for profit on the south side of Chicago.

There has been some interesting developments over the past few months.  The executive director of another organization aligned with Com Ed suggested that if BUD were to back off on the attempts to build the Bronzeville microgrid, Com Ed might just give them the old substation for their education programs. Needless to say the BUD board wasn’t too fond of that idea. A micro-gird would mean economic and sustainable business for the community since either lease fees or grant funding from any foundation resulting from arrangement between the energy company and BUD would mean funds for other sustainability projects in Bronzeville. BUD has already begun to work with other social entrepreneurial projects to develop business ideas that are sustainable and would be more affordable because of the locally owned microgrid energy supply. It also means developing jobs in the community for the community. Understand that jobs to install the microgrid are limited but the projects stemming from the first urban cooperative in the energy business do mean economic growth.

ComEd hasn’t come calling but a major developer has sent emails and made phone calls to the principals at BUD offering to buy some of the land for guess what? A solar farm. BUD is standing firm against that idea. Who is this entity offering a fill in the blank amount? No one knows but it does seem suspicious.

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  • But what I want to know is what is the fully loaded cost of electricity generation per KWH in this microgrid? I suspect it's quite a bit higher than the current cost of electricity. If this is true then ratepayers should not be paying for it.

  • In reply to Gary Lucido:

    Hi Gary,
    Sorry it took this long to get back to you but the flu has had our household by the throat.

    I actually asked a friend who is once ran a microgrid to chime in on this. Here is her response:About the cost per kWh question, I assume that ComEd will be running natural gas turbines. The cost per kWh will be tied to the cost per therm of natural gas. How they add capital costs, or create the microgrid through Exelon and have a PPA with ComEd would determine the cost per kWh.

    Also, if we get low-cost electricity from the nuclear facilities now, a lot will go into the comparison of the cost of local microgrid versus energy from the nuclear energy facilities or other natural gas generators in the area who have an existing PPA with the utility. Add to that the long-term cost of upgrades or decommissioning costs for the nuclear facilities, a lot of variables will go into creating a side by side comparison of existing generating costs versus microgrid energy generation. This is a complicated question and a complicated analysis. In the long run, local distributed generation through a microgrid could be cost-effective but will be tied to the cost of fuel if natural gas engines are included. If an exclusively renewable energy microgrid is developed, the fuel cost variable is a moot point.

    The true value of establishing a system of microgrids or distributed generation is resiliency and reduced distribution losses.

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