It’s the Infrastructure, Stupid

CPUC's Trick or Treat on Sunrise

On all Hollows Eve, the CPUC offered a treat to SDG&E:  competing proposed decisions on thier proposed Sunrise Powerlink.  The trick:  the two proposed decisions either partly or fully oppose the project.

The first of the proposed decisions, authored by an administrative law judge, denies the application for the 150-mile Sunrise Powerlink altogether, saying the project could significantly raise electric rates and do extensive environmental damage if built, and “is not needed to meet California's current renewable (energy) requirements.”

The second proposed decision, written by Commissioner Grueneich, approves the project but denies SDG&E its preferred northern route.  Grueneich argues that Powerlink is needed to meet state goals in reducing greenhouse gases, but the utility should use a southern route through

San Diego

County

that avoids

Anza-Borrego

Desert

State Park

and all tribal lands.

The full commission is not expected to vote on the two proposed decisions until December 4 at the earliest.  The commission will hear comments from interested parties and oral arguments at a public hearing in

San Francisco

on November 7.

McCain vs. Obama on Energy – Who Wins this Battle?

So, we have heard a lot from both of the presidential campaigns on energy this week, but have either of the candidates delivered knockout punches on the issue?  In my opinion, neither candidate has done that – but for now I would score the fight in favor of McCain, only because he is not loading up his plan with more spending.  Take a look for yourself, and make your decision.

 

What Does John McCain Say About Energy?

www.johnmccain.com

ü      Expanding Domestic Oil And Natural Gas Exploration And Production

ü      Taking Action Now To Break Our Dependency On Foreign Oil By Reforming Our Transportation Sector

ü      Investing In Clean, Alternative Sources Of Energy

ü      Protecting Our Environment And Addressing Climate Change: A Sound Energy Strategy Must Include A Solid Environmental Foundation

ü      Promoting Energy Efficiency

ü      Addressing Speculative Pricing Of Oil

ü      Does Not Support A Windfall Profits Tax

 

What Does Barack Obama Say About Energy?

www.barackobama.com

ü      Reduce the Burden of Rising Gas Prices on Working Families

ü      Reduce Carbon Emissions 80 Percent by 2050

ü      Invest in a Clean Energy Future

ü      Support Next Generation Biofuels

ü      Set America on Path to Oil Independence

ü      Improve Energy Efficiency 50 Percent by 2030

ü      Restore U.S. Leadership on Climate Change

Do We Really Want to Stop Global Warming?

There were a couple of stories yesterday about cities having small carbon footprints…  The San Diego Union Tribune carried one and so did The San Jose Mercury News – both good stories, but how do these cities fair when we keep hearing that the state will not achieve it’s 20% renewables target by 2010 (as is mandated under current law)?

 

Let’s assume that we could not only meet that target, but better yet, we exceeded that target…  How would these cities then be impacted (on a global scale) by events such as the eruption of the Chaiten volcano in Chile last month that spewed lava and blasted ash more than 12 miles (20 kilometers) into the sky or the devastating earthquake that rocked China this month?

Seems to me, that we will really need to step up efforts around the globe if we really hope to impact global warming…  But back to my question, and closer to home (at least as far as generation is concerned), how will we accomplish this without the infrastructure to allow us to deliver the low emission generation? 

California really needs to re-evaluate our views on this matter and allow for creative thinking.  Do we really want to have a lasting impact on global warming?  I mean in the positive sense…  Since the answer is a resounding "yes," I would submit that we had better allow for the infrastructure to be developed, including transmission, solar, wind, hydro, natural gas (we need the gas generation to run when the wind is not blowing) and yes, even rethink nuclear generation.  Admittedly, nuclear is not in the cards anytime soon, but we need to begin that dialogue today.  How can it be that France and Japan are doing so well with nuclear and we can barely even say the word? 

Last month I wrote about the comments that Governor Schwarzenegger made at the Yale Climate Change Conference .  He’s right – we all need to take a deep breath and get out of the way and allow the infrastructure that is needed to be built to actually be built.  Otherwise we should be honest and admit that we really don’t want anything to change.  The more we stand in the way of the infrastructure development that is needed, the harder it will be to turn global warming around.

Arizona Critical of SCE Devers Transmission Line in Letter to FERC

The Arizona Corporation Commission (ACC) has responded to the Federal Energy Regulatory Commission (FERC) concerning Southern California Edison’s (SCE) appeal on the proposed Devers-Palo Verde No. 2 transmission line.

The ACC defended its June 2007 decision to deny an application for the 230-mile, 500 kV line that would run from the Palo Verde hub area in Arizona to the Devers substation in Southern California.

In their letter to FERC, the ACC complained about higher levels of nitrogen oxide pollution from Arizona power plants and loss of water used in generating power that will be sold to SCE. The project also “raised concern about its negative impact on the environment, particularly in and around the Kofa National Wildlife Refuge.” The ACC went on to say that SCE has other options to satisfy its needs, which include building new power plants and using renewable energy.

SCE has appealed the Arizona denial to FERC because the DPV2 line falls within the U.S. Department of Energy’s Southwest Area National Interest Electric Corridor, as authorized under the Energy Policy Act of 2005. This is a very interesting test to the Federal Corridors portion of the act – and will prove interesting as the Sunrise Powerlink continues its path to construction.

Republican Legislators and CMTA Call on Governor to Delay AB 32 Implementation by One Year

Republican legislators and the California Manufacturers & Technology Association (CMTA) called on the governor to delay implementation of AB 32, given the slumping economy, to help California’s businesses – state operating costs are 23 percent more than the national average.

With a price tag of between at least $100 billion by 2020 and $511 billion by 2050, according to the Electric Power Research Institute, AB 32 will raise business costs and further erode the state’s economy, according to CMTA.

At issue is whether the CARB, which is charged with developing a plan and rules to carry out AB 32, should begin enforcing emissions cuts in two steps, the first in 2010 and the next in 2012, or delay each milestone by a year.

CMTA and some legislators urged the state to take an extra year to study how to achieve the law’s objectives at the lowest possible cost. A one-year delay also might give the federal government time to move on climate change after the Presidential election next fall.

Two Observations: First, I don’t expect that this will be the end of this story, we may hear more on this given the growing budget shortfall (on May 14, the Governor is scheduled to speak on the budget -- some are calling it a $14 to $20 billion shortfall). Second, even with that, I doubt that the Governor will slow down AB 32 -- since this is the political issue that put him on a world stage, I think the Administration will politely thank everyone for being creative, but say no.

CAISO Summer 2008 Outlook: Clean Energy Presents New Benefits and Challanges

CAISO has issued the Summer 2008 outlook and in it they say that the clean energy future we are moving toward will present new benefits -- but also new challanges. While the summer outlook looks good, the grid operator will have continued reliance on conservation and demand response (demand response: this is a program that allows the utilities/CAISO to shot down participating businesses when the grid is stressed for electric capacity -- when we are short electricuty -- typically on really hot days or when the grid experiences disruptions -- like fires near transmission).

The challanges that California will face as we transition to the new cleaner energy sources is exactly that "the transition." How to get to greener from the existing mix of supply? I think it will require a bridge -- earlier I called it a blue bridge (referring to clean burning natural gas). The blue bridge will be in the form of new state of the art generation that will provide grid support and reliabilty as the new green generation is developed and interconnected by new transmission. So I am back to my old song and dance: we need everything--new transmission, new gas fueled generation, conservation, demand response, and renewables of all kinds. Guess what? The CAISO agrees. They also agree there needs to be a delicate balance for how we bring these resources ton-line.

As for the summer... well, I am not as confident as the CAISO, I think that when the temperatures hit the century mark, all bets are off and folks just do not conserve. The demand response programs are grossly under subscribed, so I would not lean on those too much. Having said that -- the reserves look good, but that means that all the conservation that can occur and all the demand response that can occur, will occur. It also means that we get all of the transmission flowing without interruption (the energy imports from other part of the West) and that we have no major, fires or hydro disruptions. That's a lot of if's.

So, until we build the infrastructure we desperately need, we will be counting an many moving parts and leaning on hope to keep our lights from flickering. Good luck to us all this summer!

To see the CAISO release, go to: www.caiso.com

Governor Schwarzenegger Message to Republicans, Democrats and Environmental Activists: “Let things Move Forward”

On Friday last week, Governor Schwarzenegger delivered a very important keynote Address at the Yale Climate Change Conference. In his speech, the Governor speaks bluntly and basically tells environmentalists to get out of the way and let important projects that can bring environmental benefits move forward. The Governor states very clearly Democrat’s and environmentalists need to do the right thing and move out of the way:

“But the important point I want to make is that environmental activists and Democrats many times are just as much an obstacle in moving forward. Rhetorically, of course, they love to talk about renewable energy and geothermal and wind all those kind of things. But many times we have seen they are trying to slow down the approval process. It's kind of a schizophrenic behavior. They say that we want renewable energy but we don't want you to put it anywhere, we don't want you to use it.”

In what I see as the second time that the Governor has essentially endorsed the Sunrise Powerlink, the Governor says:

“San Diego Gas & Electric wants to develop solar geothermal fields in Imperial Valley and build 150 miles of transmission lines to go and take this power right into San Diego, but it faces opposition even though it would replace an old carbon based power plant.”

With the Renewable Portfolio Standard requirement looking like a failure (the in state utilities will not meet the 20% renewable energy portfolio requirement by 2010), it seems that the Administration has realized that the emperor wears no clothes and that the real problem in getting to the green future lies at the doorstep of the opposition. The Governor here calls on everyone to again do the right thing:

“So the point I'm making is it's not just businesses that have slowed things down, it's not just Republicans that have slowed things down, it's also Democrats and also environmental activists sometimes that slow things down.”

“So as one of my environmental friends and advisers said: There are no silver bullets, only silver buckshot. We need to find creative ways to overcome those obstacles. There's no two ways about it. Neither business nor environmentalists nor Republicans nor Democrats can be set in their ways. I suggest to them: Relax, exhale, just exhale and relax and let things move forward.”

If you have read my posts on this issue, this will all sound familiar. The Governor is absolutely correct in this instance. If we really want a green future, we all need to “relax and exhale and let things move forward.”

SUNRISE POWERLINKLIVE BLOG: HEARINGS CONTINUE IN SF THIS WEEK...

This morning I am trying something totally new... I am sitting in the hearing room at the CPUC and will provide some commentary as the hearing moves forward.

So, far the Administrative Law Judge (ALJ) has opened the hearing and invited SDG&E to call the first witness -- this was quickly inturrupted by rulings on motions to strike from last weeks testimony (nothing too exciting).

The more colorful Bill Powers will not continue his testimony until tomorrow...

As a recap -- the hearings continue on environmental impacts this week... lots of environmental representatives in the room.

Renewable Portfolio Standard Task Force Coming Soon?

A senior California Public Utilities Commission official recently shared that Governor Schwarzenegger will soon announce a task force that will seek to secure renewable generation for the grid beyond the current 20% threshold. The current requirement is that utilities achieve 20% renewable energy for their customers by 2010 - an issue which I have written several posts on and by the way, a mandate which utilities will likely not meet. Not because they are unwilling, but because the ability to get the renewable energy to the customers does not really exist.

A great example is the delay we are seeing with the Sunrise Powerlink. Regulatory stumbling blocks and snares will continue to delay the 20% renewable energy goal, but maybe the task force will take this on? Maybe they can figure out a way to streamline the process? Well, if I understand it correctly, the intent is to figure out how we can get beyond 2010 - and to a 33% renewable energy requirement.

My suggestion would be to secure the 20% requirement first - but that's just me. If we can't get to 20% -- how will we get to 33% and what's so special about 33%?!

These are questions I intend to explore and educate myself on - when I get answers, I will share them.

Will California Meet It's GHG Goals? CPUC and CEC Offer Recommendations to CARB

Last week, the California Public Utilities Commission's (CPUC) President Michael Peevey issued a proposed decision concerning implementation of California's greenhouse gas emissions legislation, AB 32. The decision recommends a cap and trade program for the electricity sector in California that would impose regulations on owners and operators of generation in California and out-of-state generators delivering electricity to the California electrical grid.

Under AB 32, the California Air Resources Board (CARB) is primarily responsible for adopting the regulations required to reduce California's greenhouse gas emissions to 1990 levels by 2020. The CPUC and the Energy Commission also play a role in implementing AB 32, however, and initiated a joint proceeding to produce recommendations to CARB on how to regulate the electricity and natural gas sectors in California. Once the CPUC and the Energy Commission adopt those recommendations, they will be passed on to CARB for incorporation into CARB's scoping plan. Although all three agencies are working together, and any recommendations provided by the CPUC and Energy Commission will be given careful consideration, CARB is not obligated to follow such recommendations.

President Peevey's proposed decision first recommends that the CPUC and Energy Commission continue to implement energy efficiency improvements and efforts to increase the percentage of renewable generation in California. Currently in California, investor-owned utilities are required to obtain 20 percent of their electricity from renewable sources by 2010. Publicly owned utilities are required to adopt a plan for increasing renewable generation in their portfolios, but are not required to meet any specific standards. The proposed decision recommends that the 20 percent requirement for investor-owned utilities be increased, although it leaves for future proceedings what the increase should be. The proposed decision also recommends that publicly-owned utilities be required to obtain at least 20 percent of their electricity from renewable sources by a date certain.

The proposed decision makes recommendations concerning the allocation of greenhouse gas emissions allowances under the cap and trade program. It recommends that at least some allowances be auctioned rather than allocated administratively, and that at least some of the proceeds from the auction of allowances be used to benefit electricity customers by minimizing the cost of greenhouse gas emissions reductions to consumers.

The CPUC and the Energy Commission will receive comments on the proposed decision and will then vote on it. If approved, the decision will be forwarded to CARB, which will make the final decision on how to implement AB 32.

The proposed decision leaves many open questions on implementation – and fails to cover considerations on transmission – specifically, how the lack of new transmission may impact the State’s ability to achieve not only GHG reduction goals, but also how investor-owned utilities will secure the 20 percent electricity requirement from renewable sources by 2010.