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Clean Energy Target Still Unmet, PG&E Signs More Renewables

Craig Miller

California’s three big utilities have another two years to reach their mandated target of having 20% of their electricity generated from renewable sources, and today PG&E announced two new deals that could inch the company closer to that goal:

  • Wind:  An agreement with NextEra Energy Resources, for 25 years of wind power from the company’s 163 megawatt North Sky River project in Tehachapi, CA.  PG&E says the energy from this project could meet the needs of about 90,000 typical homes.
  • Solar:  A 25-year contract with Sempra Generation for 150 megawatts of solar power from an expansion of the Copper Mountain Solar complex near Boulder City, NV.  Just under 2/3 of that power is expected online in 2013, with the remainder available by 2015. Ultimately, the company says, this project could power 45,000 homes.
  • Continue reading

Out On a Limb

PG&E green program helps preserve forests already saved by state taxpayers

By Susanne Rust
California Watch

California’s largest utility company promises its customers green salvation through its ClimateSmart program.

For every bit of energy a PG&E ratepayer uses – turning on a vacuum cleaner, powering up a computer or heating up an oven – a little part of a tree or forest is saved to erase the carbon sins of the customer. The voluntary program costs ratepayers an average of $60 a year.

But the company isn’t telling its customers one crucial fact: Those forests were purchased years ago by a Virginia-based conservation group that used nearly $50 million in loans and grants from California taxpayers. That group, The Conservation Fund, then sold PG&E carbon credits on the land it had already purchased for preservation and selective logging.

Thousands of PG&E customers are effectively paying twice for the same Mendocino County forests. Continue reading

PG&E Abandoning Wave Power

Challenges prove too much for one of California’s largest utilities

Waves crash along the Monterey coast. (Photo: Craig Miller)

One of the nation’s more progressive electric utilities is bailing out of wave energy.

Pacific Gas & Electric is giving up its pilot projects along the California coast.

“There’s definitely still a future for wave energy,” PG&E renewable energy spokesman Denny Boyles told me in a Sacramento interview. “Our hope is that one day it will become a more viable source,” PG&E had secured development permits for three areas along the California coast but with the technology for converting wave action into electric power still in its nascent stage, the company never got as far as getting any hardware into the water. “We did several different studies,” said Boyles. “There is wave energy conversion  technology that’s out there that’s working. It’s just not at a point where it’s widespread enough for us.” Continue reading

Major California Utilities Rejecting Prop 23

(Photo: Craig Miller)

While some oil & gas companies are behind it, none of California’s three major electric utilities appear to support Proposition 23, the ballot measure to upend the state’s comprehensive climate law, known as AB 32.

The growing list is a Who’s Who of the state’s electrical grid:

This week, Sempra Energy made it’s declaration against the measure, completing a sweep of the big-three utilities. Sempra is the parent company of San Diego Gas & Electric, Southern California Gas Co., Sempra Generation, Sempra Pipelines & Storage and Sempra LNG. A Sempra spokeswoman told Climate Watch that the energy giant is against 23 because it’s for AB 32.  “AB 32 plays a critical role in helping California develop a low-carbon economy,” she said, and added that Sempra is “heavily invested” in clean technologies, like “smart meters” and the infrastructure designed to support mass adoption of electric vehicles in the next few years. Continue reading

Nichols: No Solo Cap-and-Trade

Cap-and-Trade is a lonely business these days. But according to the state’s top regulator in charge of implementing it, California won’t go it alone.

Air Board Chair Mary Nichols, flanked by Google Green Energy Czar Bill Weihl (left) and PG&E Sr. VP Tom Bottorff, at a panel sponsored by the Silicon Valley Leadership Group. (Photo: Craig Miller)

Mary Nichols, who chairs the state’s Air Resources Board, made the remark in a Silicon Valley panel discussion today. The ostensible topic of the event was renewable energy but it turned into a pep rally against Proposition 23, the statewide ballot measure designed to halt California’s comprehensive climate law, AB 32. Nichols was joined on the panel by executives from Google, PG&E and venture capitalist Vinod Khosla, all of whom voiced strong opposition to Prop 23.

When asked about the cap-and-trade provisions of AB 32, Nichols said: “We won’t launch this program without partners to trade with. It doesn’t make sense for an economy even as big as California, to try to do this all by ourselves.” The comment came days after congressional leaders threw in the towel for the summer, on a federal bill to address climate change and energy security. “To get the kind of leverage that you really need to make this program succeed, the US has got to step in,” said Nichols.

California is part of a nascent regional trading pact known as the Western Climate Initiative. But among the seven US states and four Canadian provinces signed on to the WCI, only California, New Mexico and Quebec are prepared to move forward with a working carbon trading market. Others still lack enabling legislation, and Arizona has overtly pulled out of the carbon trading plan, raising the question of how many “partners” California will have, even with WCI in the mix.

“I don’t expect to be faced with this dilemma,” Nichols told me after today’s event, “but if the worst were to happen and none of these states were able to move forward with their own programs, I think we would think long and hard about whether we would actually start enforcing the program, unless and until we were really confident that our  state had the ability to do it in a way that would not put us at a competitive disadvantage.”

Proponents of Prop 23 contend that full implementation of AB 32 will give other states and nations a competitive edge over California, resulting in “leakage” of jobs and businesses to regions with fewer regulations.

The panel, entitled “Electric Bills and Oil Spills: Will California Continue To Be a Clean Energy Leader?” was held on the Google corporate campus in Mountain View.

Dumbfounded by “SmartMeters”

UPDATE: In late January, 2011, The New York Times published a good overview of how the controversy over smart meters has evolved since this post.

When utilities and the California Public Utilities Commission hatched plans to bolt a “smart meter” onto every household, the premise–and the promise–was that by digitally tracking just how much they were using and spending, customers would be able to make smarter choices about their energy use, ultimately saving money and cutting carbon emissions.

Smart meters are also a critical component of the nascent but much vaunted “smart grid,” in which household appliances and electric cars communicate with the vast power transmission network, and optimize things like when to recharge.

But as I report in my radio story for The California Report, many PG&E customers consider them more bane than boon (PG&E uses the trademark “SmartMeter,” whereas I may refer to them generically as “smart meters”).

Part of what’s riled up customers in Bakersfield and elsewhere in California is that PG&E hasn’t provided the devices to help watch the watts. Customers can go online to track their energy use over the last 24 hours, but that’s about it. And in the meantime, consumers are paying the cost of the new meters, and in some cases, higher bills that they blame on those meters.

Liz Keogh shows me the "SmartMeter" outside her Bakersfield home. Photo: Sasha Khokha

Liz Keogh shows me the "SmartMeter" outside her Bakersfield home. Her summer 2009 bills went up by half after it was installed. (Photo: Kristin Torres)

Julie Fitch, who heads the energy division of the California Public Utilities Commission, told me she thinks those real-time tracking gadgets won’t actually change consumer habits that much. “There’s a certain percentage of us who are interested in seeing what our energy use is at all times, and are fascinated by it, but I think it’s probably a small percentage in the grand scheme of things,” Fitch said.

Fitch says consumers will see more of an advantage from smart meters when home appliances can communicate with the devices.

“The reality is the grid right now is that it’s actually fairly dumb,” Fitch said. There’s a lot of manual decisions that need to be made in order to get the electricity from a generator to your house. I think what we’re looking at is a much more automatically controlled situation where appliances are automatically linked in with smart devices.”

For example, a fully integrated system could “decide” to run your clothes dryer at off-peak times, to relieve strain on the grid and possibly save money. But the whole idea of charging more for power at different times of day, known as peak pricing, troubles consumer advocates like Mark Toney. He heads The Utility Reform Network (TURN), a consumer advocacy group based in Oakland.

“We want to make sure this doesn’t unduly harm seniors, for instance, who are home bound,” Toney told me, pointing out that folks don’t have a choice sometimes about whether to run their air conditioner in the sweltering Central Valley heat.  “We don’t want them to be faced with the choice of being safe in their home or being subject to heat stroke because they shut off their AC because they can’t afford it,” he said.

Toney is also concerned that struggling customers are more likely to see their power shut off,  if they can’t keep up with the bills.  Smart meters allow utilities to turn off power remotely, without having to send a crew out to someone’s home–and that, he says, gives the company less incentive to negotiate payment plans.

The CPUC’s response? Utilities will still have to follow standard procedures, including advance notice of shut-offs.

Meanwhile an independent lab appointed by the CPUC continues to test PG&E SmartMeters to try to determine why some of them are malfunctioning. Some customers now have “side-by-side” test installations, with both analog and digital meters tracking electricity use in tandem. Strangely enough, the deployment of smart meters by Southern California’s two major utilities has gone relatively smoothly, with just a fraction of the complaints that PG&E has logged.

In my radio story, I interviewed Bakersfield Resident Liz Keogh, who saw her electric bill spike after her SmartMeter was installed.  Keogh is very energy-conscious; her home is a veritable showcase of energy-saving gadgetry. There could be any number of technical reasons why the new meters led to larger bills. Keogh developed her own personal theory (since disproved by independent tests), which she demonstrates in the video below, using some unlikely props. It’s a good example of the broad spectrum of consumer objections to the technology.

The Backlash Against “SmartMeters”

A "SmartMeter" mounted on a Fresno home. (Photo: Sasha Khokha)

A "SmartMeter" mounted on a Fresno home. (Photo: Sasha Khokha)

The California Public Utilities Commission says it will name a consultant sometime this week to start testing PG&E digital “SmartMeters,” which customers have blamed for spikes in their utility bills.

The announcement came after state Senator Dean Florez (D-Shafter) held a press conference in Bakersfield to question why the CPUC hadn’t taken action. Last October, the Commission agreed to quickly hire an independent contractor to test the meters.
Florez got involved in the flap last year after some of his Central Valley constituents saw their bills triple with the new meters, even if customers bought energy saving appliances, or in some cases, when no one was living at the home. “The biggest savings recognized so far has been to PG&E, who were able to lay off numerous meter readers,” said Florez in a press release.

PG&E has blamed the higher bills on rate increases and hot weather (not a new phenomenon in the Central Valley, where people coddle their air conditioners as if they were household pets).

The Bakersfield Californian reported last month that the backlash here in the Central Valley is catching the attention of industry analysts and utilities nationwide, who want to avoid a spreading backlash against the new technology.

One of the groups sounding a warning is the Division of Ratepayer Advocates, an independent consumer advocacy division of the CPUC. Last week, it advised the Commission to reject a Southern California Gas application to fund its own $1 billion smart meter program. DRA argued not that utility bills would spike with new digital meters, but that money could be better spent on energy efficiency measures and appliances. DRA says SoCalGas is overestimating how much customers will reduce their usage if they can see a digital display of how much energy they’re paying for.

Part of the concept behind smart meters is to help utilities with “demand response” strategies; providing timely feedback to customers, who can use their home computers to see exactly how and when they’re using power, customers might then alter their consumption patterns to avoid peak demand periods, and cut utility bills.

But some of that strategy has already backfired. The San Francisco Chronicle recently reported that a document PG&E filed with the CPUC says the advanced digital smart meters will let the company shut off power to more customers who fall behind on their bills, since they can do so without having to send a crew to a customer’s home. The meters may be smart but consumer advocates say it’s a dumb strategy that will make it easier for the utility giant to leave customers out in the cold.

Climate Lobby Bulks Up

Some California corporations figure prominently in a new tally of climate-related lobbying activity.

A continuing study from the non-partisan Center for Public Integrity (CPI) shows that climate-relating lobbying reached a fever pitch in the third quarter of this year, with 140 new organizations showing up in government-required registrations. That brings the total number of registered climate lobbyists to 1,160, with most activity centered on two climate bills–one passed by the House and another pending in the Senate.

The Center’s latest report is called “The Climate Lobby from Soup to Nuts”–and they mean it literally. CPI reports that registered climate lobbyists now include such diverse interests as the makers of Campbell Soup and Blue Diamond Growers (“a can a week” may not be all they ask, after all).

Not surprisingly, “Big Oil” is a big spender. San Ramon-based Chevron Corp. clocks in at more than $36 million since 2003. And PG&E, one of California’s largest utilities, is shown spending more than $34 million just in the last two years ($19 million in the third quarter of 2008 alone).

Silicon Valley is well represented on the list, including some firms whose stake in climate policy is less obvious; eBay, Google, Hewlett-Packard and Intel are all in the half-million-plus club. Government records show Intel declaring more than $12 million on climate lobbying since 2003.

Marianne Lavelle, a staff writer who helped compile the figures for CPI, says that companies with a stake in green energy technologies are seeking more of a voice in the process, to counter fossil fuel interests, and that technology-oriented venture capital firms are becoming more of a visible presence on the lobbying radar.

The CPI data also includes major environmental lobbies such as the San Francisco-based Sierra Club, which logs $1 million over the past two years. Lavelle says what it doesn’t capture is lobbying at the state level, nor does it reflect spending on “grassroots” organizing or money spent on advertising campaigns designed to steer public opinion on climate issues.

The CPI study site includes a searchable database of all federally registered climate lobbyists.

Invasion of the Electrics

If the electric car was indeed “killed,” as a popular documentary suggested not long ago, the floor at the Los Angeles Auto Show this week would suggest a mass resurrection not seen since Night of the Living Dead. Climate Watch contributor Alison Hawkes reports on some implications for the power grid. Her radio report airs Friday on The California Report.

By Alison Hawkes

Electric vehicles may be few in number over the next few years, despite the hype around the release of off-the-assembly line EV models in 2010. It takes several decades to flip the American vehicle fleet.

Robert Susich offsets his charging with rooftop solar.  "This is the way of the future," he says. Photo: Alison Hawkes

Robert Susich offsets his charging with rooftop solar. "This is the way of the future," he says. Photo: Alison Hawkes

But there’s little doubt that EVs are coming, pushed on by anxiety over foreign oil and unexpected spikes in gas prices, growing environmental awareness, and government incentives. Starting at the end of December, EV buyers get a federal tax credit of between $2,500-to-$7,500 per vehicle, depending on the battery size. There are other tax credits for plug-in conversions and even electric motorcycles and electric three-wheelers. Now who doesn’t like a tax credit?

All this may sound promising but energy planners have some serious head-scratching to do as Americans begin switching their transportation fuel from gasoline to electricity.

For starters, how do you avoid building extra power plants? Who pays for infrastructure upgrades to electrical substations and transformers? How do you get EV drivers to charge during off-peak hours when the energy supply is now wasted?

Pacific Gas & Electric’s smart grid director Andrew Tang says utilities have faced similar problems before with the advent of air conditioners in the 1970s and plasma screen TVs in the 1990s. New technologies add to the demand on an already tight energy market. “It’s a form of load growth and we’ve managed to deal with it without having sudden power outages,” says Tang.

But, Tang admits, EVs could bring a heavier strain on the grid than any seen before. One EV can draw as much energy as a house. Put another way, that’s doubling a household’s demand for power. Fortunately, it sounds like the utilities have some time, and capacity, to see how the EV market develops.

PG&E is expecting to support some 250,000 vehicles by 2020, which may not seem like much for a 70,000 square-mile service territory. But they won’t be spread out evenly. The northern California utility is expecting EV drivers to congregate in certain neighborhoods, potentially sending substations and transformers into overload (read: blackouts) if not properly managed. Tang said PG&E did a study of hybrid electric vehicle registration over the last four years and found that Fresno’s portion of hybrids was 2.4 percent, while Berkeley’s was 18 percent. “That’s much more concentration,” says Tang. “We think that’s a fair proxy of what we could have with electric vehicles.”

So the California Public Utilities Commission is now exploring ways to regulate EV’s. The basic question is how to influence consumer behavior so EVs do not add to peak energy demand. No one wants blackouts, and no one wants to build more power plants. One idea bandied about is a differentiated rate system that encourages EV drivers to charge during off-peak hours at deeply discounted prices, called a “time of use rate.” Another idea promoted by the PUC’s independent Division of Ratepayer Advocates is a five-dollar monthly fee on EV drivers that would go into upgrading grid infrastructure, like adding or upgrading local transformers, as needed.

“If electric vehicles need (additional) infrastructure, they should pay for it and not spread the cost across all ratepayers,” says DRA’s deputy director Dave Ashuckian.

EV drivers may bristle at being treated differently than other power users, especially when they feel they’re doing society a favor by switching to a cleaner fuel source. Early adopters may be happy to help optimize the grid. But if EVs go mainstream, energy planners know the public is going to want a more convenient system.

Automated smart metering (you’re not in charge of your charging) may help. The hybrid plug-in Chevy Volt coming next year is supposed to come with a smart meter.  But planners eventually foresee public charging stations that will allow EV drivers to juice up quickly (through high-wattage charging equipment) and when they need to, during daytime peak hours. Already some California companies that want in on the emerging charging station business are fighting the idea of PUC regulation of their potential market.

A California PUC staff white paper reported that the benefits of lowered greenhouse gas emissions with an electrified transportation system are realized only when some 76 percent of EV drivers charge off-peak. And only if any extra power demand is met by renewable energy sources – not coal or oil. That’s a tall order.

Ed. Note: One thing EV’s already have going for them: a lobby. This week it was announced that after 16 years, deputy director Eileen Tutt is leaving CalEPA to become executive director of the California Electric Transportation Coalition.

Keeping the Sizzle in California Solar

Pacific sunset by Reed Galin

Photo: Pacific sunset by Reed Galin

California, as I noted last fall as part of the series “Solar Realities,” has more solar self-generation than any other state in the nation by far. Now, if you ask the folks in the solar division of the California Public Utilities Commission, this state of affairs has a lot to do with three policies:

  1. The California Solar Initiative (CSI) provides rebates to cover about a fifth of the cost of installing solar systems.
  2. Simplified Interconnection exempts solar customers from interconnection fees and the cost of the studies required to connect their equipment to the electricity grid.
  3. Net Energy Metering allows solar power generators, who run the meter backwards as well as forwards, a credit on their power bills at “full retail electricity rates”–as opposed to the wholesale power price.

The policies were designed to encourage civilians to install solar for their own use; not necessarily to create an incentive for thousands of home power plants to serve the grid (depending on the size and location of your home, you may not be able to meet all your own electricity needs, let alone deliver surplus to the grid).

But if you can generate more solar power than you need, why not?

Adam Browning of the Vote Solar initiative, put it this way to the San Jose Mercury News: “Why are we talking about stamping on the brakes when we should be talking about pushing on the accelerator?”

Enter Assembly Bill 560. Net metering is currently capped at 2.5 % of the system’s peak energy demand or “load.” Once the stream of solar electrons coming onto the grid reaches that level,  the utility is not obligated to sign more net-metering contracts. AB 560, courtesy of Assemblywoman Nancy Skinner (D-Oakland), would provide some more headroom for that program by raising the cap to 10%.

AB 560 has passed the Assembly. Tomorrow, it comes up before the state Senate Energy, Utilities, and Communications Committee.  No doubt, a staff report due out the same day from the CPUC on the status of the California Solar Initiative will give the discussion some extra “juice.”

Meanwhile another bill, AB 920, from Assemblyman Jared Huffman (D-San Rafael), would change the way customers with solar installations are paid for surplus power. As I noted, they now get credited on their monthly bill at the full retail rate. Some of that credit is offset by “regular” power the solar customer uses at night or on cloudy days. Then, at the end of the year, leftover credits are zeroed out. AB 920 would require utilities to pay for credits left over at year-end, albeit at a lower rate–or allow the extra to be rolled over to the next year.

The CPUC, by the way, has come out in support of AB 560, but not AB 920.

The state’s three investor owned utilities dislike both bills; especially Pacific Gas & Electric, which is closest to approaching that 2.5% cap. About 30,000 of PG&E’s 6 million customers have solar systems.

PG&E contends that expanding its home solar program would burden the rest of its customers, who bankroll the state rebates for solar installations. And because solar customers buy less electricity from the utility, PG&E argues they don’t contribute as much as others to cover the costs of transmission and generation.

PG&E has said it would support raising the net-metering cap to 3%–but wants to see a cost-benefit analysis from the CPUC before supporting any further home solar expansion. That report’s due out in January.

There are those outside the industry who share PG&E’s concerns. Framing it as a class issue, the non-profit Utility Reform Network opposes raising the cap unless changes are made to allow non-solar ratepayers to share in the benefits.  Even with the current subsidies, going solar requires an often daunting up-front investment. As green becomes the color du jour for businesses and politicians, an increasing number of projects pair solar with low-income housing. But more often than not, your typical solar-powered household in California is likely to be well heeled.

As utilities enthusiastically pursue their own large scale solar projects, some solar advocates suspect that the companies are really worried that wide-scale residential solar would cut into their income. PG&E counters that state regulations eliminate the financial incentive for investor-owned utilities to simply sell more power to make more money.

All this raises a key question: Without lifting the cap on net metering, can California achieve its goal of 3,000 solar megawatts by 2016?

Rachael Myrow is host of The California Report, produced by KQED and heard on public radio stations throughout the state.

Editor’s Update: The CPUC’s latest report shows a near doubling in the rate of  installed capacity, from 2007 to 2008, and so far, data would seem to indicate a continuing trend this year. Installed  capacity to date puts the CSI at 13 percent of the total program goal, with another eight percent pending.