Shifting Grid Sands

19 May 2016

The impacts of changing technologies and creating a multi-state grid on California’s carbon-lite energy policies, jobs outlook and power rates were debated May 17 at the Power Association of Northern California’s annual seminar in San Francisco.

There were no clear conclusions.

“This is a very chaotic environment to make predictions” said Mike Picker, California Public Utilities Commission president, regarding how the changing grid paradigm will play out. He also noted the commission’s challenge of being focused on central planning at a time of growing decentralization of energy resources.

“This is the moment of new and old technologies conflicting,” he said.

Picker noted the safety problems of aging infrastructure, in particular millions of overloaded and failing utility poles. He said that rather than “chasing renewables” the commission “is chasing failing poles.”

Meanwhile, investor-owned utilities are investing billions of dollars annually to upgrade their aging infrastructure, part of which may become obsolete, while also investing in new technologies, including a bidirectional distribution grid.

Avoiding over-burdening ratepayers with investments in traditional and new infrastructure and technologies is a key issue. But where’s the line on reasonable costs?

“There is no bright line,” said Pedro Pizarro, Southern California Edison president.

The utility, for example, has spent $12 billion over the last three years on capital expenditures, with much of that directed at replacing aging infrastructure. The amount Edison has allocated for “grid modernization” is between $350 and $560 million for 2016-17. In the next three years the company plans to spend between $1.4 and $2.6 billion on grid modernization.

Other blurry lines include how allowing the California Independent System Operator to become a regional grid will impact California’s clean energy efforts. CAISO’s first proposed partner is PacifiCorp, which operates in seven Western states and has a coal-heavy electricity portfolio.

It provides service to 83 percent of Utah, a state which has concerns about joining a California-dominated grid. Utah has very different priorities, and embraces its coal power and its low rates, said to be the lowest in the West.

“We don’t feel we have a problem to solve in the state,” said Laura Wilson, Utah Office of Energy Policy director.

Picker acknowledged the challenges of protecting California’s long-term work to advance clean energy under an expanded grid scenario.

“PacifiCorp will be a tough thing to swallow,” he said, suggesting that if the company wants to join a western grid “it may have to dump Wyoming and Utah,” which are both coal heavy states.

Concerns were not limited to a grid with a broader geographic footprint possibly bringing dirty power into California. The impact on labor also was discussed.

“This is a big, bold idea by well-intentioned people,” said Tom Dalzell, International Brotherhood of Electrical Workers Local 1245 business manager, of the push to regionalize the grid. So, too, was the state deregulation fiasco, he added.

Dalzell said California jobs in the building trade sector would be hit hard if CAISO becomes a western grid operator because other states, including Nevada, have lower wages and fewer environmental protections. Dalzell noted, for example, Elon Musk chose to build his battery factory in Nevada and not California.

“SB 350’s promised jobs will disappear,” he warned. SB 350, which became law last year, opens the door to a western grid and also 50 percent renewable power and a doubling of energy efficiency in buildings by 2030.

Elizabeth McCarthy

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