[BETA] Fortnightly

Micro maverick Bill Althouse sees a grand conspiracy to blot out customer-owned generation.

Distributed generation is out of the box. It's time for regulators to wake up. The paradigm has already shifted."

That's Bill Althouse talking, president of Althouse Inc. of Albuquerque, N.M., a seat-of-the pants business (he says he's near bankruptcy) that helps homeowners and businesses install on-site generation. I met him via email as I researched why, on Jan. 12, in its first official act, the newly elected New Mexico Public Regulation Commission had suspended a rule approved only six weeks earlier by the now defunct Public Utility Commission that had allowed net metering for customer-owned renewable energy and distributed generation.

Althouse, a missionary for distributed generation designed to capture waste heat (CHP, or "combined heat and power"), takes his role seriously.

"I was once the head of Arco Solar's largest distributor," he told me. "We pioneered large heavy batteries in the heyday of tax credits. But I got my heart broke when I found out we could sell all the power in the world and it would never begin to cover our costs.

"But this [DG] is market-driven. You get greenhouse savings by capturing the waste heat. Think about district heating. That's eco-industrial symbiosis. In Denmark, there's a place where they get 97 percent efficiency for the entire city. Sometimes they use the heat two or three times. But our Four Corners plant would be lucky to get 20 percent efficiency, with five times the NOx and SOx."

In talking with Althouse, I got more than I bargained for. On the local level, he's battling the PRC and Public Service Co. of New Mexico (PNM), trying to get an interconnection agreement to move ahead on his deal to install a 400-kilowatt simple-cycle gas turbine on-site at Santa Fe's landmark La Fonda Hotel, located right off the city's historic 500-year-old Plaza. He charges PNM with foot-dragging. But on a grander scale, Althouse has launched a crusade. In these waning days of rate-case regulation, Althouse accuses the entire electric utility industry of conspiring to sabotage the private market in distributed generation - saving it for themselves, to exploit fully when competition arrives.

"Every utility engineer knows that distributed generation technology is the reason power plant investments are 'stranded,'" he says. "And utilities know that obsolescence does not justify stranded cost recovery."

"WHAT BOTHERS ME ABOUT ALTHOUSE," notes Bob Hagan, spokesman for PNM and liaison between the utility and its shareholder alliance, "is that he isn't entirely disinterested or altruistic. He would have us destroy the existing utility infrastructure - and all for an expensive technology that is far from proven."

When I asked him, Hagan confirmed why the PRC had suspended New Mexico's net metering rule. The original version apparently had failed to limit the size of the customer-owned generating unit (an amended rule set the limit at 1 megawatt), whereas in the discussion sessions leading up to the rule, PNM and other utilities had understood that net metering rights were restricted to facilities no larger than 10 kW.

That PUC