Quotes of the Day

There's nothing like a multistate summertime blackout to get environmentalists and industry groups throwing spitballs at one another. Extreme greens wag told-you-so fingers and dream anew about a grid-free country, with homeowners generating their own power courtesy of clean, renewable energy sources. Industry types speak instead about building new nuclear or conventional power plants or muscling up existing ones—and delivering all the juice through a modernized distribution system.

In this instance, both sides are right—to a degree. While centralized power will probably always be with us, the best way to upgrade the energy grid may well involve doing away with some of it, democratizing energy production by handing the job off to communities, blocks and even private homes.

Long before last week's blackout, environmentalists and industry researchers had begun evaluating the idea of "power parks"—communities or mere groups of homes that would generate their own energy courtesy of solar panels, wind turbines, fuel cells or natural-gas generators. The little clusters could be almost entirely self-sufficient, relying on the grid only in the event that they needed to top themselves off with a sip or two of outside power. Just as important, they would have the freedom to disconnect from the larger network entirely if a regional crash was threatening to knock them off-line along with the bigger consumers. Similar independent systems could be used to provide power to individual users with especially big energy appetites, such as factories or hospitals.

George Douglas, spokesman for the National Renewable Energy Laboratory in Golden, Colo., concedes that the concept is "idealistic in one sense" but compares it to distributive computing, in which the data-crunching once performed by a single supercomputer is broken up and scattered among numerous smaller computers. "Almost all computing was formerly done on mainframes," he says. "Now we all have that same power on a laptop."

What has always kept this kind of energy free-lancing from becoming more than environmentalist daydreaming is that the necessary technologies have remained unreliable and prohibitively expensive (with the exception of wind turbines)—particularly if you are talking about microgenerators that serve only a single home. Lately, however, the question of cost, at least, is coming under control. "The price of solar cells has fallen," says Douglas. "Natural-gas microturbines are more affordable too. The economics are coming closer to reality."

Where economics lead, government policy often follows. The few consumers who do generate their own power—typically with green technologies like solar panels, windmills or hydroelectric turbines—usually use it only to supplement what they draw from the grid. Still, this can present a problem when the power they generate with their windmills or solar panels, combined with what they take from the local power plant, exceeds their needs. Historically, they would simply kick that extra juice back to the local power company, which would buy it back from them at far below market value. A new system has been enacted in 36 states to rectify that inequity. Under the plan, called net metering, a homeowner's electrical meter simply rolls backward whenever the house is feeding electricity to the grid instead of pulling it down, reducing the bill at the same price per kilowatt hour the power company charges.

Proponents of the policy hope that it will boost energy independence, but not everyone thinks that's a good idea. Because so much of the American gross domestic product is involved in the coal, petroleum and nuclear industries, walking away from them would set off severe economic shock waves. "The grid is a $360 billion asset," says Clark Gellings, a vice president of the nonprofit Electric Power Research Institute. "It's literally a national treasure." Gellings believes that decentralization will play some role in the energy industry of the future, but he thinks it will always be a minority player. "It may be 20% of the supply in maybe the next 20 years," he says, "but it's not going to replace what we have." That may be so. But after the fiasco of last week, plenty of consumers would be happy to see the whole system replaced—or at least dramatically improved.   

—Reported by David Bjerklie and Mitch Frank/New York, Rita Healy/ Denver and Laura A. Locke/ San Francisco

• Jeffrey Kluger