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Which Raises the Question

Just how big a role will electric utilities play in the distribution of fuel cell systems? That they will play a role seems certain, and not just because of deals like the one forged by Flint.

Four of the five residential fuel cell developers poised to go commercial in the next few years have deep financial ties to the electric industry. EPRIGEN—a for-profit subsidiary of the industry's nonprofit Electric Power Research Institute—owns a 30% interest in American Fuel Cells Corporation. Avista Corporation is umbrella to both fuel cell developer Avista Labs and Avista Utilities, an electricity and natural gas provider serving more than 550,000 West Coast customers. Northwest Power Systems recently sold a majority interest to IDACORP Technologies Inc., a subsidiary of IDACORP Inc., which is the holding company of Idaho Power Company, an electric utility providing power to some 700,000 customers in Idaho, Nevada and Oregon. And Plug Power counts as one of its two parent companies DTE, Energy, parent company of Detroit Edison, which, with two million customers, is Michigan's largest electric utility.

So what does all of this industry involvement mean? Are electric utilities, faced with an increasingly deregulated market, simply looking for another product to offer consumers who will soon face a wealth of power choices? Or are they looking to corner the fuel cells market by attaching a meter or contract to every unit, thereby blocking the route to true power independence?

We put the question to Bernadette Geyer, deputy director of Fuel Cells 2000, a nonprofit, educational organization that tracks the industry. "Fuel cell developers are not putting all of their eggs in the utility basket," assures Geyer. "They are looking at retailing these [systems] to consumers."

But the two scenarios are not mutually exclusive. After all, Flint Energies has already announced that it will double as retail marketer, selling fuel cell systems outright to customers who opt to go that route. And, while only time will tell, other utilities are likely to follow suit.

Plug Power's Mittleman says that electric and gas utilities may well be a part of the distribution network, but he also predicts that consumers will eventually be able to walk into their local home appliance or hardware store and buy a system—and as manufacturing improves and markets boom, for as little as several hundred dollars (though he admits these bargain-basement prices may be ten or 15 years away).

Geyer says that utilities have "smartly taken an interest in the technology so that they are not totally usurped," and she foresees room in the market for various modes of delivery. "There are going to be people who want to be totally grid and utility independent," she says, "but there will always be people who find it easier to have someone else handle installation, service and upkeep issues, and so will prefer to have [these systems] offered as another function of their utility."

Also to be hammered out with the utilities are interconnection standards, says Geyer, noting that some fuel cell system owners may prefer to stay wired as backup, while others may find themselves with net metering opportunities, or the ability to sell excess power back to the grid.

Whatever the details, one thing's clear: Fuel cells are coming... and power as we know it will never be the same. Hallelujah!

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