The incandescent light bulb was invented more than 200 years ago, and the concept has been in production since the late 1800s. But only recently have we begun to replace those old, heat-wasting filament bulbs with something new, such as compact fluorescents and LEDs.
Yet the way we deliver electricity — a utility that produces power at one central plant then charges for its costs and its profits — has not changed in nearly a century.
"What's interesting about this is the business model the utilities work under is the same as it was in the 1910s," said Sean Kershaw, executive director of the Citizens League, a St. Paul-based policy advisory group. "At the time, we wanted a reliable built-out system."
Today, though, Kershaw said, utilities should be tasked with creating opportunities of efficiency and alternative energy where it is financially viable.
"In Minnesota, we've done a lot of things to modify that model," he said. "But the fundamental model isn't any different. The more energy we save, it puts more pressure on the utilities to raise rates."
Creating incentives to save power should not just be limited to rebate programs for LED bulbs, Kershaw said. A better model would find ways to stop the inefficiency in electricity generation and transmission.
"Minnesota still loses roughly two-thirds of its energy potential from generation to the point it's used in your home," he said. "The vast majority of electricity is lost as heat before it gets to your light bulb."
That means finding more ways to utilize solar and wind power while balancing that with the need to provide power even when the wind doesn't blow and the sun isn't shining.
"There are variables. How do you set up a model that works for everyone?" Kershaw said.
Adam Arling, project coordinator for Citizens League, agreed that today utilities need a new model of doing business.
"Today it's not about more, it's about better," he said. That means providing the alternative energy customers want.
"We ought to be paying utilities for those types of outcomes," Arling said. "Rather than this cost-of-service model, we want to pay for some outcomes."
Some of that change has come to Minnesota, Arling said. For example, the conservation movement has helped set goals for the state — goals that, so far, Minnesotans have been meeting. But conservation, he said, is like putting a bandage on a system that is just broken and needs to evolve.
The next step is to get rid of the patchwork of incentives out there and allow people more choices when it comes to power generation, whether that's rooftop solar, wind projects or community solar.
"The majority of people out there just care that they have reliable and affordable energy," Arling said. "But then there's a large chunk of customers who care about where their energy comes from."