San Diego Panel to Assess Powerlink Alternatives

By Published On: October 26, 2007

A San Diego agency plans to examine alternatives to the Sunrise Powerlink project and make recommendations early in the New Year. The review by the San Diego Association of Governments’ energy working group is set to take place against the backdrop of a report released late last week that suggests distributed generation, coupled with energy efficiency, could potentially eliminate the need for the San Diego Gas & Electric transmission line. SDG&E has been promoting its project to local officials and there are concerns that the officials lack adequate information on the alternatives, said Henry Arbaranel, SANDAG energy working group co-chair. “It’s going to take a mixture of sources to meet the anticipated needs of the area,” said Arbaranel, who will help head up the panel’s review, expected to begin in December. “We probably need a 1,000 MW [of new power]. The region grows by about 100 MW a year.” The utility maintained its plan for the line is still necessary. The proposed $1.3 billion line would move large amounts of potentially renewable power from the Imperial Valley into the coastal metropolitan region. The California Public Utilities Commission is considering whether to approve the project (Circuit, Oct. 5, 2007) Abarbanel, also a professor of physics at the University of California, San Diego, said that the panel would give priority to the state’s so called “loading order” for utilities. That regulation gives top billing to energy efficiency, followed by renewable energy for new power. Energy efficiency, coupled with more rooftop solar energy and other forms of distributed generation, could go a long way toward meeting the county’s future power needs, Ararbanel said. Yet, he thinks the region may still need a new transmission line within five to ten years. However, the best proposal may well be the Lake Elsinore Advanced Pumped Storage project, according to Abarbanel (Circuit, Aug. 17, 2007). It would be far shorter than Sunrise line and the transmission path associated with LEAPS alone would cost far less than Sunrise. The panel will make a recommendation to the full SANDAG council. However, local governments have little direct authority over the project and it is unclear how influential their recommendations may be with the California Public Utilities Commission, said Scott Anders, University of San Diego Energy Policy Initiatives Center director. He maintained the area ultimately would need a mix of solutions to meet future energy needs and should avoid getting forced into “either/or decisions.” The distributed generation/energy efficiency alternative to the Sunrise Powerlink project was outlined in a report, San Diego Smart Energy 2020, funded by the San Diego Foundation and released October 18. It lays out a strategy that calls for installing up to 2,040 MW of rooftop solar, mostly on large commercial buildings, and adding 700 MW of clean energy from combined heat and power installations within SDG&E’s service territory. It also calls for an absolute reduction in energy use of 20 percent through efficiency measures, as well as green building standards for new construction and upgrades to the utility’s distribution system. The plan could be funded, said engineer Bill Powers, who authored the report, with much of the same money SDG&E plans to spend on the Sunrise Project. The report said that distributed generation would guard the area against potentially volatile future prices for natural gas, which is the primary fuel used for making electricity for the San Diego region. “These assertions are misleading and, in many cases, simply untrue,” countered Mike Niggli, SDG&E chief operating officer. “As we learned from California’s energy crisis earlier this decade, a balance of infrastructure, resources, and conservation is needed.” He said that the utility’s long-term energy plan–which includes building the Sunrise Powerlink project–provides that balance. SDG&E questioned assumptions in the study, saying that it underestimated the cost of solar power “by a factor of 10” and dramatically over-estimated the amount of savings from air conditioning. Powers responded that the report’s assumptions about the cost of solar are based in part on a signed power purchase agreement between the city of San Diego and SunEdison. Under it, the company is providing energy to the city from a 956 kW system installed at a water treatment plant for $0.12/kWh compared to the $0.17/kWh the municipality pays SDG&E for power. Such power purchase agreements help lower the cost of solar to municipalities because the companies that install and sell the solar panels are able to take advantage of federal tax credits for photovoltaic systems, as well as state incentives, pointed out Abarbanel. However, he noted, that for cities to take advantage of such arrangements the utility has to work out tariff agreements. Powers said that the reports estimated savings from air conditioning is based on average usage in hot inland areas of the county, not an average usage figure between cooler coastal areas and inland communities. He said that retrofitting buildings with high efficiency air conditioning equipment available on the market today could cut energy usage for cooling by more than half. The report ultimately recommended that the key to distributed generation will be for the CPUC to provide utilities with incentives similar to those outlined in the commission’s recent energy efficiency decision (Circuit, Sept. 21, 2007). It called the current arrangement, under which “utilities earn a fixed profit based on the value of the property” they own, “[a] major hurdle” to moving toward decentralized solar projects. It urged the commission to establish incentives and penalties “to reflect the priorities of the loading order.”

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