Juice: 11 Stories Ring in 2011

The soon-to-be year-that-was--2011--found California advancing its unique energy policy. The Legislature gave the gift of a 33 percent renewable energy mandate for 2020 to prevent Santa’s home from melting. The California Air Resources Board ended any doubt the state is bent on economy-wide greenhouse gas emissions trading, with power producers and utilities the first to be wreathed with the tinsel of the market. That’s only a couple of the highlights. Looking back from the still of a December night, Current offers the 11 biggest stories of 2011 for reading by the fire. Public goods--A majority of legislators put coal in the public goods program’s stocking in September, but it didn’t take long for state regulators to transform it into a diamond-in-the rough weeks later. The California Public Utilities Commission voted this week to keep $150 million/year of ratepayer funds flowing to state energy research and development and renewable energy subsidy programs. In a separate decision the CPUC authorized collecting $250 million annually to replace expiring public goods charge funding that’s traditionally been a major source of revenue for the state’s massive $1 billion/year energy efficiency program. While lawmakers earlier this year scrutinized shortcomings in agency public goods charge-funded programs created during the deregulation era and paid for by ratepayers, they gave scant attention to energy efficiency program bonuses paid for by ratepayers that have regularly overflowed from utility stockings hung by the hearth. They approved $62 million in utility bonuses for claimed efficiency savings Dec. 15. PG&E’s PR--It was an early chorus of Auld Lang Syne for Pacific Gas & Electric with the replacement of former chief executive officer Peter Darbee with Tony Earley. The utility’s been in the federal, state, and media spotlight since the San Bruno gas pipeline explosion. During a Dec. 12 press conference on his third-month anniversary as chief, Earley said the auld acquaintance of unsafe ways should be forgotten and new customer trust should take a cup o’ kindness. PG&E faces new state and federal natural gas pipeline safety requirements. The utility revamp includes separating the electric and gas businesses, because the latter tends to get “underfunded,” according to Earley. It also plans to charge nearly all of the gas pipeline upgrade costs--$1.98 billion--to ratepayers. Also, there’s this year-long problem with digital meter acceptability. CPUC C-change--The addition of a new international banker to CA’s energy scene, a law professor fond of the Socratic method, and a formerly fashion-challenged consumer advocate, morphed the California Public Utilities Commission from a body that guarded utilities’ financial viability to one questioning ratepayer spending on renewables and efficiency. Spending on programs remains relatively unabated, and it’s not back to “command-and-control.” But, it was not business as usual this last year. Expect the New Year to bring further changes. Window pane contracting--In response to fears of high costs and frosty ratepayer backlash, as well as years of grumbling about lack of transparency, the CPUC will soon open an Advent Calendar window to reveal the aggregate cost of past renewable energy deals utilities have entered. It’s mandated by SB 836 by Sen. Alex Padilla (D-San Fernando). Before the law takes effect next year, an unharmonious commission revealed the $1.25 billion price tag of a 250 MW solar deal five years in the making. A present goes to regulators for finally shining star light on renewable contracting. New efficiency star--Utility energy efficiency rebate programs hit the point of diminishing returns as the state holiday tree’s low branches were overloaded with compact fluorescent bulbs. It became apparent to utility regulators that to take the state’s efficiency programs to the next level would require “deep” building retrofits. The problem is that most home and business owners can’t afford deep retrofits without financing. The CPUC appears to be setting its sights on creating a state-backed financing program to provide consumers and businesses affordable, low-interest loans. Utility customers would pay off the loans with on-bill payments collected by their utilities, which would pass the money on to the banks that lend it. In a bid to provide holiday cheer to lenders, the state would guarantee the loans using a portion of the energy efficiency program funds paid by ratepayers. Blackouts--As holiday lights burn bright, organizations and regulatory agencies are still investigating how 7 million people in San Diego and Imperial Counties and parts of Arizona and Baja California lost power. Initially, the Sept. 8 blackout was blamed on the error of a single Arizona Public Service employee. But, regulators turned up 20 distinct events that occurred in five separate balancing areas over an 11-minute period before the complete power failure occurred. Grid telemetry data gathered both by the California Independent System Operator and Western Electricity Coordinating Council signaled no danger. Then, it was Mother Nature causing another massive blackout. Hurricane-force Santa Ana winds ripped through the Los Angeles earlier this month, causing power poles to snap, trees to topple over power lines, and transformers to pop and sizzle across Southern California Edison and Los Angeles Department of Water & Power territories, as well as areas served by other public power agencies. Almost as soon as the winds began to howl, more than a million people lost power. It took as long as a week to fully restore electricity. Cap & trade--The California Air Resources Board unwrapped its greenhouse gas cap-and-trade market this year. California’s pursuit of a carbon market leaves the state largely out in the cold now that other states said “bah, humbug” on the Western Climate Initiative. Former Gov. Arnold Schwarzenegger launched WCI with great fanfare back in the heyday of public concern about global warming in 2007. Schwarzenegger envisioned a linked carbon market that would span western states and many Canadian provinces. Enthusiasm waned in other states. The result is a California-only program that is smaller in scale and ambition than initially envisioned. Many financial industry veterans believe as much in Santa as they do in the robustness of the soon-to-launch market. Nukes--Reactor meltdowns at Fukushima Daiichi in March took the glow off America’s own nuclear plants--even in this state. Attempts to extend Diablo Canyon’s life for another 20 years are in question, but still very much on the table. Federal regulators spoke with forked tongue, keeping the relicensing plans at full tilt while PG&E, Diablo’s owner, spends $17 million in ratepayer funds for more seismic studies. Edison’s plan for asking for a license extension for the San Onofre plant got put on the back burner. Edison, along with part-owner SDG&E, is still seeking $63 million for seismic studies this year, while PG&E is requesting the CPUC to approve $47.5 million more for seismic studies this year--in addition to last year’s $17 million gift. 12,000 MW of renewables--There may be reindeer on roofs, but there is nowhere near the 12,000 MW of distributed electricity promised by the governor. The state chief has promoted local development of wind and solar supplies that can feed into power lines, avoiding the need for costly and time-consuming new transmission projects to reach remote green power projects. Expected to count towards the 12,000 MW (Mega Wishes) are the hoped-for 3,000 MW of subsidized rooftop solar power that began before Brown was in office, and another 1,000 MW of investor-owned utility solar rooftops. The plan still won’t fly until the cost is resolved. Utility lords are not yet leaping on the 12,000 MW distributed renewable bandwagon. Fossil plants--There were few lights around the Energy Commission’s permit project door. A grand total of one approved fossil-fueled project came online this year--Anaheim’s 200 MW peaking facility. Two projects were permitted: the 624 MW Oakley Generating Station and the 200 MW Mariposa Peaker Project. In 2010, the commission approved nine such plants, representing 2,214 MW. Construction of nine other big projects, representing an additional 3,500 MW, began in 2011. Breaking ground in July was the CPV Sentinel Energy Project, an 850 MW natural gas-fired plant, and in June, the 624 MW Oakley Generating Station, another natural gas plant. The projected online date for the Oakley project is sometime in 2012, while the CPV Sentinel project is scheduled to be up and running by August 2013. Also on the horizon is the 630 MW El Segundo Power Redevelopment Project to replace a once-through cooling system with a rapid response combined-cycle, dry-cooling plant. It’s expected to be online by August 2013. Sunrise Powerlink--San Diego Gas & Electric’s 117-mile, $1.83 billion Sunrise Powerlink moved past the halfway mark in construction during 2011, with the utility now saying that the project’s on schedule for completion during the second half of 2012. When completed, the so-called “electric superhighway” is expected to have a 1,000 MW capacity, enough energy to light holiday decorations and meet other needs in 650,000 homes.

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Juice: 11 Stories Ring in 2011

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