Most people don’t recognize Samuel Insull as the “father” of the modern electric utility industry. Sure, Thomas Edison invented hundreds of ways to use electricity in our homes and businesses, including the iconic incandescent light bulb, and he created the first direct-current generation network in Lower Manhattan to string together those lights and appliances.

But it was Insull -- initially as Edison’s secretary and business manager, then as president of Chicago’s Commonwealth Edison utility -- who masterminded the incorporation of the General Electric Company, built the first regional high-voltage transmission grid, and tirelessly promoted the state-level utility regulatory system that has characterized the power business for well over 100 years.

Insull always thought in grand scale, and at one time in the 1920s his combined Middle West utility enterprises provided one-fifth of all the electricity generated and consumed in the country. That his financial empire collapsed as one of the major corporate victims of the Great Depression is largely the reason his name is rarely mentioned today, unless it is in comparison with those of disgraced Enron executives.

On the positive side, Insull had an obsession with continuous improvement of his networks.  If a new power generation unit became available that would increase productivity and output, he would tell his engineers to scrap existing units and replace them. At the same time, he was always pushing the big equipment vendors (GE and Westinghouse) to compete with each other for higher efficiency of output, better materials and lower costs. 

In Insull’s estimation it was entirely appropriate for a growing industry to constantly upgrade for the benefit of its customers. In pursuit of that end, he wielded the same kind of supply-chain market leverage that we see Wal*Mart exert over its many vendors. It was also good for Insull’s business, for his employees and his customers.

Insull didn’t use the term “sustainability” as he was more concerned with the notions of community prosperity and productivity as his utility system grew and flourished, providing more jobs and better services. But if he were alive today, I think he would agree that failing to seek out improvement and innovation is definitely an unsustainable business practice.

Author Daniel Goleman has written about “perpetual upgrades” as a key construct in industrial sustainability: “The logic of the perpetual upgrade tells us that we will have to constantly reinvent and rethink almost all industrial processes if we are ever to make them truly sustainable. Competition and marketplace transparency will create inexorable pressure to continuously raise the bar on ecological impacts.”

Somewhere along the way, the electric utility industry institutionalized and “status quo” became more important than innovation. Technology efficiency was measured and valued marginally, if at all, and it became more important to protect and preserve investments in existing infrastructure than to seek out improvements.

That’s not sustainability. It’s a situation that leads to stagnancy and deterioration of systems that is increasingly hazardous to our health and safety and to the environment at large. 

Need an example? How about Pacific Gas & Electric’s natural gas pipeline system, embedded underground for over 60 years in many places, and as deeply entrenched as the utility’s own attitude about maintenance or replacement of potentially faulty pipes.

At least not until forced by catastrophe, regulation and lawsuits.

It’s one of the problems that confront the “green tech” industry as we attempt to replace an increasingly antiquated system with new, more efficient and improved technologies.  Constant reinvestment in infrastructure is costly and disruptive.

But often it is necessary for environmental or social reasons, and potentially it can lead to major improvements that improve cost effectiveness.

We can find worthy examples close to home and across the country.

Currently, work is underway at the Altamont Pass wind generation areas about an hour east of San Francisco Bay, where major project developer NextEra Energy Resources is removing about half of its existing turbines over the next three years and replacing the rest with larger units.

The driver behind this effort was a 2010 settlement with environmental groups and then-Attorney General Jerry Brown, to find ways to reduce the killing of threatened bird species, including golden eagles and red-tailed hawks. The new turbines will be twice as tall and generate twice as much electricity, while replacing legacy “lattice” structure towers that made attractive but too-often fatal perches for hunting raptors.

And it will have the positive side-effect of forcing innovation with a host of system and technology improvements that would be beneficial even at wind farms that don’t experience Altamont’s avian mortality problem.

I find other examples all across the nation, including a “greening” of a 1960s-era New York City water treatment and pumping facility that design emphasizes use of sustainable building materials while reducing energy costs and greenhouse gas emissions, and providing a healthier work environment.

Of course, it is wise to build sustainability into new facilities, but more often the greatest opportunities for improvement come at existing facilities and systems.

As President Obama prepares his forthcoming speech on jobs and the economy, it might do well for him to think about the legacy of Chicago’s early utility system in creating a strong economy through continuous upgrades – with an eye toward sustainable futures.

America must invest in a sustainable future, in the long run it will be better for all of us.

Read more here:

“Sustainability and the Logic of Perpetual Upgrades” by Daniel Goleman, Harvard Business Review blog

http://blogs.hbr.org/leadinggreen/2009/05/sustainability-and-the-lo...

 “Altamont Pass Wind farm gets a Major Upgrade” by Daniel Hull, San Jose Mercury News (August 28, 2011)

http://www.mercurynews.com/business/ci_18778324

Manhattan Pump Station Sustainable Upgrades

http://www.hazenandsawyer.com/work/projects/manhattanpumpstation/

And for history buffs, some background on Sam Insull from the archives:

"The Rise and Fall of Samuel Insull" excerpt from The Guilty Enviro...

“Shaken Empire” from Time Magazine archives (April 18, 1932)

http://www.time.com/time/magazine/article/0,9171,743596,00.html

Arthur O’Donnell, The Energy Overseer, is an independent journalist and energy industry analyst. Follow him at www.energyoverseer.com and on EcoCloud.