As California regulators begin to contemplate a master plan for how to carry out the state’s climate protection law, AB 32, they are entertaining numerous suggestions and cautions regarding the electricity sector, with some public utilities warning about cost and potential cross subsidies and companies touting new technologies. The written suggestions trickled in earlier this month to the California Air Resources Board, which is planning a meeting November 30 that will kick off a year-long process to develop a comprehensive scoping plan outlining how it intends to carry out the landmark law. Environmentalists also weighed in on what that plan should include for the power industry. The Natural Resources Defense Council, for instance, suggested a variety of measures, including a requirement that homes be retrofitted for energy efficiency upon sale. The Air Conditioning and Heating Institute backed a similar approach, requiring upgrades to heating and air conditioning equipment upon sale of homes. The Center for Energy Efficiency and Renewable Technology backed establishing competitive renewable energy zones that would be targeted for green energy projects and transmission lines to move the power to cities. However, there were skeptical remarks. The Southern California Public Power Authority, for instance, expressed worry that shifting the transportation sector to greater reliance on electricity to cut greenhouse gases will increase the load on public utilities. The Air Board “should address how the electric sector is to accommodate the increased load,” urged Norman Pederson, authority attorney. It is expected that the Air Board eventually intends to require, or at least encourage, commercialization of plug-in hybrid vehicles, which can be charged up off the grid enough to transport most commuters to and from work using an electric motor and can draw on their auxiliary gasoline-powered engine for longer trips. Pederson also urged the Air Board and California Public Utilities Commission to scrutinize a plan by San Diego Gas & Electric and Southern California Gas to rate base millions of dollars a year of investment in natural gas vehicle fueling infrastructure. Existing gas customers should not be charged, the attorney said, particularly power plant operators that pay the utilities for “gas transportation service.” He noted that the utilities are asking the CPUC to approve expenditures of $10.2 million a year from 2009 through 2013 to develop natural gas fueling infrastructure for vehicles and to recover that money through rate hikes. The companies are responding to increasing pressure to clean up diesel soot, a carcinogenic pollutant that heavy-duty vehicles emit. The vehicles largely are used to move freight, such as goods shipped through the state’s ports. However, the American Lung Association of California and other environmental groups asked the Air Board to ultimately require electrification of much of the equipment, including trains, trucks, ships in port, and yard handling equipment, like cranes and shipping container movers known as yard hostlers. The groups also want electrification of ground support vehicles at the state’s airports. In written suggestions to the Air Board, environmentalists outlined further measures for reducing emissions from natural gas utilities (see article above) and through water efficiency. To help the power industry pay for greenhouse gas reductions, the Northern California Power Agency recommended that AB 32 implementation rules allow “tradable” renewable energy credits. “Under an unbundled REC regime, claim over the renewable attributes of energy produced by eligible renewable technologies can be transferred from the renewable generator to one retail service provider while the energy is delivered to another,” wrote Susie Berlin, agency attorney. Adding a tradable approach to an unbundled REC program would allow the credits to “be transferred from the renewable generator to any third party, not just retail energy providers.” Those parties then would be free to sell the credits to any buyer, including those who could use them to comply with greenhouse gas emissions reduction requirements. International Power Services suggested that the Air Board outline a voluntary measure to encourage operators of simple cycle turbines to install its new “technology package,” which it claimed increases generating capacity by 30 percent while cutting the heat rate by 20 to 30 percent. Overall, it can reduce greenhouse gas emissions from the turbines by 20 percent, the company said. Another company, Advanced Flow Battery, advocated providing monetary incentives to power companies to install large batteries in which electrolytes are stored in tanks after being charged and then flowed back into the electrolyzer to produce power when needed. Such batteries, the company said, can be sized to “economically store multi-MWs of power.” Finally, an entrepreneur whose company, Sun Frost, makes solar-powered refrigerators in Arcata suggested that the state establish a “paybate” program for electricity customers. Under the plan, the state would set a benchmark power usage rate for residents. Those who exceed the benchmark would pay extra money for their power. This money would be rebated to those who stay under the energy use benchmark. The plan would be “revenue neutral.” The money could help fund installation of solar equipment and energy efficiency measures. Eventually it could be expanded to cover commercial buildings. “Even a family renting with limited funds could participate in this program with no investments by wearing sweaters and shutting off lights when not needed,” wrote Larry Schlussler, who owns Sun Frost. Editors’ note: For a more detailed version of the CARB scoping story, please see our sister publication E=MC2--Energy Meets Climate Challenge. You can find it at www.energymeetsclimate.com