Friday, October 29, 2004

Blackout Blamed on PG&E

PUC officials are pointing the finger at NorCal Utility Pacific Gas & Electric:

A power outage that left a third of San Francisco in the dark last year on the busy weekend before Christmas could have been prevented if Pacific Gas and Electric Co. had fixed problems the utility itself identified years earlier.

That was the major finding of a report released Thursday by the California Public Utilities Commission. PG&E officials agreed. The company's investigation of the incident, publicly released in August, had made the same conclusion.

Last Dec. 20, a fire went undetected at a PG&E substation at Eighth and Mission streets for more than two hours, cutting off power to 120,000 businesses and residents. The utility's customers -- some who were in the dark for more than 24 hours -- have received $2.3 million in damage claims so far from PG&E. Nearly 2,400 separate claims were made, and all but 43 have been resolved, said John Nelson, a spokesman for the power company.

Not only do utilities have to have power, they have to reliably get it to their customers, too!

Utilities urged to boost reserves

California utilities will be boosting their electricity reserves, as the PUC acted on Governor Schwarzenegger's request:

Investor-owned utilities such as San Francisco's Pacific Gas and Electric Co. must line up the extra power -- 15 percent to 17 percent more than the expected need -- by June 1, 2006.

The California Public Utilities Commission already voted in January to require those reserves but gave the utilities until Jan. 1, 2008. Schwarzenegger asked that the date be moved up, arguing that blackouts could strike sooner than expected.

Since 2006 is the projected next date for a possible energy crisis, it only makes sense to plan now to have extra power in the bank.

Thursday, October 28, 2004

Governor Promises Cheap Power to Lure Businesses

High taxes. Expensive cost of living. Strict regulations. All of these barriers to attracting new businesses are just compounded by souring energy prices. Governor Schwarzenegger, however, believes he can get them under control, and is offering low power rates to try to get at least one company to expand in California:

Amy's Kitchen, purveyor of frozen organic entrees, wants to expand. And its search for a new manufacturing site has triggered a high-profile tug of war between Schwarzenegger and Oregon Gov. Ted Kulongoski, with both states vying to host the new plant.

As a result, California energy regulators today will consider cutting Amy's electrical bills, an idea hatched by the governor's office and pitched for approval by Pacific Gas and Electric Co. The firm could save roughly $2 million in the next five years.

Although power bills aren't the only factor in Amy's decision, company officials say lower rates would help them expand here.

"We've got a business model that survives on extremely low margins, so actually, that reduction in electrical rates would be extremely significant to Amy's Kitchen," said Chief Operating Officer Scott Reed. "You wouldn't think it would make a big difference, but we're growing rapidly."

Even better would be to find a way to lower electricity costs for all Californians!

Alternative Energy as a Business Model

Someday, it will make sense to invest in the development of alternative energy sources--from a business perspective--but that day may not yet be here:

Energy prices may be climbing, but the market for alternative sources of energy wasn't promising enough to keep the lights on at Carlsbad's Metallic Power.

The 9-year-old company shut down its operations last month after spending more than $40 million in venture capital to develop zinc fuel cell technology, two board members said yesterday. About 40 employees lost their jobs.

Despite the successful demonstration of a prototype, the company was unable to attract additional venture funding, said Thomas A. Page, a director who was the former chairman and chief executive of Enova Corp., the predecessor company to Sempra Energy.

Wednesday, October 27, 2004

Biogas energy faces hurdles

A creative renewable energy source--turning what otherwise would be considered crap into something useful (power)--is facing obstacles as California tests Biogas power:

By the end of the year, 12 of 14 state-funded pilot projects on dairy power are expected to be operating, and three more dairy generators are planned next year for southern Sacramento County.

The stakes are high, as the state tries to reduce dairy odor, meet renewable energy targets and curtail emissions of greenhouse gases linked to global warming.

But so-called biogas plants, already more than two years behind schedule in California, are not sure bets. The Central Valley's potential for manure-based energy could fizzle without more evidence about environmental benefits, cooperation from power companies and new incentives to turn pollution into power.

Since its creation during the 2001 energy crisis, the Dairy Power Production Program, under the auspices of the California Energy Commission, has been hampered by technical problems at dairies, along with low milk prices and state budget cuts.

Much of the problem has been pinned on power companies, where obstacles became so severe they were addressed by a state Senate committee in August.

Sounds even better than turning lemons into lemonade!

Tuesday, October 26, 2004

FERC Approves Dynegy Settlement

Federal regulators have agreed to a deal to give California utilities their money back from overcharges during the 2000-01 Energy Crisis:

Federal regulators approved a settlement late Monday between Dynegy Inc., California power companies and state agencies that wipes out $281.5 million in unpaid electricity bills during the state's energy crisis.

The Federal Energy Regulatory Commission approved the settlement -- which was agreed upon in April -- by West Coast Power LLC, which is a 50-50 joint venture between Houston-based Dynegy and Minneapolis-based NRG Energy.

The settlement resolves refund claims and accusations the companies charged unjust or unreasonable electricity rates after October 2000.

Monday, October 25, 2004

Angelenos moving to transit-oriented development

Perhaps it is wishful thinking by assignment editors at the Los Angeles Times, but the paper goes into depth today about people moving closer to mass transit to avoid rising fuel prices:

Nationally, the average metropolitan household owns 1.6 cars; a household near a transit station averages 0.9 cars, according to the federal study. A separate recent survey, funded by the California Department of Transportation, found that residents near rail stations are five times more likely to commute by transit than the community average, according to report coauthor Richard Willson, chairman of Cal Poly Pomona's department of urban and regional planning.

By comparison, the gas savings from Hybrid development are miniscule.

California Blackouts Back in 2006

The California Energy Commission has released its latest assessment of California's energy future, and it is dark...literally:

Clogged transmission lines and aging power plants could create electricity shortages in Southern California as early as summer 2006, according to a report by the California Energy Commission.

The report, released Friday, paints a dire picture for Southern California in the near future -- with electricity reserves falling well below the reserve margin grid operators say is necessary for a reliable system.

When reserves fall too low, the Independent System Operator, which manages much of California's electricity grid, can order rolling blackouts, cutting power to some areas in order to keep the rest of the grid stable.

In addition to supply and distribution woes, the report notes that demand is rising across the state. Peak electricity use rose more than 6 percent this year, an increase three times what was predicted.

A hint of what could come was seen this summer, when the state broke the all-time record for peak electricity use seven times -- even though temperatures were moderate, said Stephanie McCorkle, a spokeswoman for the Independent System Operator.

Friday, October 22, 2004

LA Airport home to Hydrogen filling station

Last year, gubernatorial candidate Arnold Schwarzenegger spoke about building a hydrogen highway for the alternative-fuel vehicles. Fast forward one year, and he has already begun. Dan Weintraub reports, "Schwarzenegger today unveiled a hydrogen-powered version of his favorite vehicle -- the Hummer -- at Los Angeles International Airport, where he opened the state's first retail hydrogen refilling station."

Future for a Natural Gas OPEC

Reuters reports that a Rice University Professor is studying the possibility of an OPEC-like cartel for LNG:

With gas fields in the United States aging and expected to see their yields fall off in the coming years, LNG is seen as a vital supplement for U.S. energy needs. In its vaporous form, gas can only be transported through pipelines, which prevents imports from overseas.

But through the LNG process, gas is super-cooled into liquid form, loaded onto a tanker, and shipped from virtually anywhere in the world. The LNG is then regasifed at port and moved out through a pipeline.

Peter Hartley, energy economist at Rice University's Baker Institute for Public Policy in Houston, believes Russia's overwhelming resources could negate any "gas OPEC."

"They can be a monopolist by themselves," Hartley said. "They're going to be exporting everywhere, to Europe and to Asia, and elsewhere when they get into the LNG business."

Sempra recently signed agreements to purchase LNG from OPEC-member Indonesia for its proposed receiving terminal in Baja California. Regulators should be wary of relying on any natural gas supplies from such a cartel.

Environmental Injustice alive in Sacramento

Officials at the Sacramento Municipal Utilites District proved, once again, that if your neighborhood is rich and organized, it will be spared the environmental impacts of building new infrastructure:

Seven people who usually devote their public service hours to the stolid realities of electricity were drawn Thursday morning into a passionate exploration of beauty, poverty and class.

Should one neighborhood, peopled with articulate and well-off homeowners, have a proposed power line rerouted when equally unsightly lines brand other neighborhoods?

The answer, for four of the seven directors of Sacramento Municipal Utility District, was "yes, but ... ."

Whenever projects are proposed remotely near less affluent communities, cries of environmental justice arise...and SMUD officials have only added fuel to those fires.

Edison Forgoes Ratepayer Bonuses

One problem critics allege with incentive bonuses is that they incentivize making stuff up...Southern California Edison is learning this now:

Edison told the California Public Utilities Commission staff that it would forgo or return to the agency $35 million in payments that the company said were based on flawed safety ratings. Many of the ratings were distorted by inadvertent omissions, others by what Edison called "inappropriate" efforts by managers to hide reportable incidents.

In some cases, Edison found evidence that supervisors contacted outside medical personnel to influence treatment, change medical records or downgrade the seriousness of an injury. Other times, Edison said, its managers encouraged employees to dodge safety reporting requirements by undergoing physical therapy or using vacation days during recovery.

"I was pretty flabbergasted," said Robert Cagen, a PUC staff attorney who attended a closed meeting Thursday with Edison executives. "What this appears to be is an incentive … to underreport injuries. That's what's happened here."

Unlike Wonkette, for example, Southern California Edison is a utility--not a blog--and the cost of making stuff up is significant.

Wednesday, October 20, 2004

PG&E Fined for San Francisco campaign

Politics and power collided two years ago in San Francisco, and it looks like the powerful utility interests may have crossed the line in funding their campaign:

Under settlements with the city Ethics Commission and the state Fair Political Practices Commission announced Tuesday, PG&E and the political committee it funded admitted that they had failed to disclose -- before the election -- $800,000 in donations from the utility that paid for last-minute advertising against Proposition D...

Prop. D would have allowed the city Public Utilities Commission to take charge of securing electricity supplies for all of San Francisco.

PG&E's No on Prop. D campaign spent $2.7 million; proponents of the measure spent $70,000. The company's outlays, unprecedented in local elections, paid off -- Prop. D was defeated 54 percent to 46 percent.

Tuesday, October 19, 2004

Sempra to go to trial for market manipulation

San Diego-based Utility Sempra will go to trial over accusations it manipulated energy prices during the 2000-01 California Energy Crisis:

The plaintiffs say Southern California Gas Co. and San Diego Gas & Electric – Sempra's utility subsidiaries – conspired with El Paso Corp. to manipulate the natural gas market and caused some $9 billion in damages to customers statewide.

Among the issues in the dispute is what took place during a 1996 Arizona hotel room meeting between representatives of the Sempra companies and El Paso.

The plaintiffs say the meeting, attended by 11 senior executives of companies that were historic competitors, was held to reach agreement on carving up the regional natural gas market.

As a result, SoCal Gas stopped competing on a project favored by El Paso, while the Texas company similarly ceded a pipeline project in Mexico to a Sempra utility, according to the plaintiff allegations.

Now, Sempra wants to become a major supplier of Natural Gas to all of California by building an LNG terminal in Baja California.

Monday, October 18, 2004

Hearings sought for LNG Terminals

Environmental groups are calling for hearings on proposed Liquefied Natural Gas ports on the West Coast:

Ratepayers for Affordable Clean Energy says the California Public Utilities Commission should conduct hearings to determine whether the gas is needed. The coalition opposes LNG development on the West Coast, arguing that it won't reduce gas costs and is unneeded.

That depends on what "need" we really need electricity?

Friday, October 15, 2004

Greenspan allays fuel fears

Although I pai more then $30 this morning to fill up my tank for the first time ever, Alan Greenspan puts it in perspective:

Greenspan, however, noted that even with the recent jump, energy prices are still only three-fifths as high, after adjusting for inflation, as they were at their all-time peak in February 1981.

He said this means that the overall impact on the economy should be lower this time around than during that period, when the oil shocks of the 1970s and early 1980s were enough to push the country into a series of recessions.

Greenspan said that so far this year, the rise in energy has probably trimmed the gross domestic product by about 0.75 percentage point, far less than the shocks of two decades ago.

Of course, these oil prices make hybrid vehicles and alternative energy sources seem much more attractive.

Wisconsin jettisons LADWP Coal strategy

At Beyond Brilliance, Beyond Stupidity, Wisconsin Energy is being panned for its plan to build coal-fired electric generation in the Southern suburbs of Milwaukee. Although not in California, these purple-staters could take a lesson from the Los Angeles Department of Water and Power...which also burns coal. Rather than putting the polluting power plant near its customers, however, LADWP believes in environmental justice--and has placed its coal-powered generation in Utah.

Thursday, October 14, 2004

Edison Shareholders are in the money!

Who needs to re-regulate California's energy markets when your Investor owned Utility is taking in the cash hand-over-fist:

Rosemead-based Edison, in a public filing and in a meeting with analysts in New York, raised its earnings forecast for 2004 by 3 cents a share. The parent of Southern California Edison also sees 2005 earnings topping expectations as it benefits from moves to cut back debt and expenses.

The company, which operates coal, oil and gas power plants in Pennsylvania, West Virginia, Illinois and Washington in addition to its Southern California utility, is selling off international assets and reducing debt.

Edison also said it planned to recommend a 2005 dividend of $1 a share to its board, up from its current annual dividend rate of 80 cents a share. The company aims to pay out 45% to 55% of its earnings, excluding those from its Mission Energy power plant unit.

Edison CEO John Bryson attributes the surge to improvements in the State's regulatory and political environment.

Toyota considers building Hybrids in USA

Since demand for hybrid vehicles is so high in the United States, it only makes sense that Toyota is considering ways to increase hybrid production:

Toyota Motor Corp. is considering building some of its popular Prius gas-electric hybrid sedans in the U.S. because production in Japan has not kept up with global demand for the car, a top executive said Wednesday.

Using a Toyota factory here to build the Prius as well as other Toyota and Lexus hybrids now in the pipeline "does make sense," said James Press, executive vice president of Torrance-based Toyota Motor Sales USA.

Toyota last month said it was increasing global production of the Prius by 50%, to 15,000 units a month, and would double annual shipments to the U.S. to 100,000 units next year. "But we like to build our vehicles where we sell them," said Toyota Motor Sales spokesman Xavier Dominicis.

Toyota owns plants in Fremont, CA, Georgetown, Ky., and Princeton, Ind.

Wednesday, October 13, 2004

Sempra to import Indonesian LNG

Liquified Natural Gas coming into Sempra's proposed Baja California Liquified Natural Gas terminal would come from Indonesia:

Under the 20-year contract with BP and Tangguh LNG, a group of mostly Japanese energy firms, Sempra Energy LNG would receive 3.7 million tons of LNG per year, or 500 million cubic feet of natural gas a day.

The gas from fields beneath a remote jungle of West Papua, Indonesia, would be liquefied and shipped in tankers to a Sempra-Shell receiving terminal at the Costa Azul plateau north of Ensenada. There, it would be regasified and delivered by pipeline to natural gas customers in Baja California, California and Arizona.

Sempra Energy LNG expects to start building its Energía Costa Azul project in the first part of next year and receive its first shipments from Indonesia in 2008.

Of course, if natural gas prices in Japan are greater then those in California, it is easy to see a scenario where the Japanese consortium decided money comes before the California consumer. Actually, it would be easy to see a scenario where Sempra felt the same way, too!

LADWP: Out of Control

Financial management at the Los Angeles Department of Water and Power is out of control:

The Department of Water and Power's managerial troubles mounted Tuesday when Los Angeles officials disclosed that the utility paid $10 million -- twice the purchase price -- to make functional the Pasadena building where it set up a temporary water lab.

The disclosure came as the DWP's massive rate hike faces a legal challenge and on the same day that the board overseeing the DWP voted to accept a settlement of $4.7 million for construction defects in its $70 million Sun Valley water-testing facility that became mold-infected, allegedly causing illness to dozens of employees.

Ratepayers in Los Angeles--not management at DWP or elected officials scared to admit error--are the ones who ultimately pay the price for mistakes like these.

Gas prices go crazy; media goes crazier!

When gas prices decline, we never hear about it, but when they go up, up, up, believe me, you will hear:

Contra Costa Times: "Gas prices near record"
San Francisco Chronicle: "Punishment at the pump"
Los Angeles Times: "Several Factors Blamed for Soaring Gas Prices"

Monday, October 11, 2004

Cicchetti: Sempra LNG plan bad for California

USC Prof and former Wisconsin Public Utilities Commissioner Dr. Charles Cicchetti examines Sempra's LNG proposals in Baja California:

Government approval is required to build an LNG plant. We should not tolerate companies that seek to use government and regulatory policy to unfairly favor their project over others.

Sempra, the San Diego-based energy company, seems to be doing just that ---- attempting an end run on the competitive market in California, garnering favorable transportation prices for its affiliates and proposing to spread their LNG system infrastructure costs over their regulated retail customers. If approved by regulators, this would mean that ratepayers effectively guarantee Sempra's investment in an LNG facility in Mexico ---- protecting shareholders at the ratepayers' expense.

Favoring California's regulated utilities, such as Sempra, means that independent LNG projects would not compete on an even playing field.

Innovation will cease. Choices will wither. Worse, California's consumers will be forced to pay the bill and assume risks best left with private investors, with no guarantee that the bulk of the gas generated at the Sempra facility will even flow to California.

California should insist that Sempra and other state-regulated utilities build LNG facilities for California under the same terms and risks they face elsewhere in the world where they propose to build similar facilities.

Found via Energize California News and Views...

Hybrid Wars Heat up Hollywood

"Hybrid" seems like the word of the day today, with even more news about the vehicles-du-jour. Defamer reports that hybrid fever is catching on among Hollywood's agent set, and is leading a fevered race to go greener and greener.

Diesel Hybrid hurts efficiency!

D'oh! Mercedes Benz has been testing a new Diesel Hybrid engine. Hybrid moseld work by using the energy generated from braking the car to turn into electricity which is used in lower gears. Turns out, according to Jalopnik, this means lower fuel efficiency at freeway speeds. So why, exactly, is California encouraging hybrid cars to drive in the faster HOV lanes?

Hopeful Hybrid Owners have to wait

The new Lexus hybrid SUV is delayed until January, but the three month push-back is not the reason for long waits for hybrid vehicles. Jalopnik reports that the wait for hybrid vehicles in some cities can be longer than that for organ transplants! Perhaps the auto manufacturers would notice that demand for hybrid vehicles is greater than the supply and, like, make more of them?

Friday, October 08, 2004

Support for LNG in Ventura County

Letters to the Ventura County Star are sure to rile up Tim Riley:

We need natural gas

I attended a conference on energy choices presented by the World Affairs Council of Ventura County. One of the panelists, Joe Chow, public affairs manager of Southern California Gas Co., cited the need for more natural-gas sources. He stated, "liquefied natural gas is a source that is needed in California to ensure there is enough natural gas for the future." I agree 100 percent; this source of energy is needed in California.
-- Robert Burnett, Port Hueneme

Offshore project vital

We have been exporting liquefied natural gas to Japan and other countries for 20 years. We need it here. Our natural-gas prices are going up each year. We have the supply; what we need is a place for it to be processed and distributed. Finally, someone is willing to invest millions to build an offshore facility here in California, and right away people begin saying "not in my back yard." Shame on them.
-- Loralee Parker, Port Hueneme

Energy Future in Perspective

Businessweek has a good run down of energy alternatives:

PROS A clean substitute for gasoline and other fuels
CONS Consumes more energy to make than it yields

PROS A safer, more efficient design, plus no greenhouse-gas emissions
CONS Many still hate nukes, and there's a waste-storage problem

PROS A super-abundant source of clean-burning natural gas
CONS Sea floor deposits cannot be tapped using conventional wells

PROS Lets the U.S. and others import big amounts of cheap natural gas
CONS Facilities are costly. Neighbors fear explosions

PROS Renewable and non-polluting source of electricity
CONS Still more expensive than fossil fuels; needs a sunny setting

Thursday, October 07, 2004

Enron Claims to be Dropped: Court Order

California has been asked to drop its claims against failed energy giant Enron:

A federal judge Thursday ordered California to drop fraud claims seeking $2 billion in refunds from Enron Corp., saying the company is protected from such suits under bankruptcy law.

U.S. Bankruptcy Court Judge Arthur J. Gonzalez ruled that no new claims could be filed against Enron after an Oct. 15, 2002, deadline he imposed following Enron's 2001 bankruptcy. He denied California's request to put the ruling on hold until the state could file an appeal, saying, "The state has failed to establish that it would suffer irreparable harm by dismissing" the suit.

The state will file an emergency request to block Gonzalez's ruling in Bankruptcy Court in New York, Atty. Gen. Bill Lockyer said in a statement.

The lawsuit, filed in June in Alameda County, accused Enron of manipulating power prices during California's energy crisis in 2000 and 2001 using a series of unlawful trading schemes.

Somehow, I don't think anyone at Enron has $2 billion to pony up.

Wednesday, October 06, 2004

Feds may block Hybrid Carpool bill

Last week, Governor Schwarzenegger signed legislation allowing hybrid automobiles to drive in the State's carpool (HOV) lanes. But the Federal Government may have something to say about the plan:

The law signed Sept. 23 by Gov. Arnold Schwarzenegger allows drivers of hybrid vehicles that achieve 45 miles per gallon to use the car-pool lanes without having to meet the current two-occupant rule.

But Congress also has to approve the law because federal money is used to fund the lanes for high-occupancy vehicles, or HOVs. And provisions of the law are tied up in the multibillion-dollar highway spending bill that may not be voted on for months.

Automakers are lobbying hard against the current proposal. They want the law broadened to include hybrids just now coming onto the market that don't yet meet the 45 mpg requirement.

"Whether or not it will survive is up in the air," said Mike Stanton of the Alliance of Automobile Manufacturers, which represents nine carmakers including Ford and Toyota.

Good luck getting anything through Congress.

Californians paying more for oil, natural gas

The LA Times reports that the price of oil and natural gas are going up, up, up:

Oil for November delivery climbed $1.18 a barrel to $51.09 on the New York Mercantile Exchange.

Market watchers have made something of a sport out of guessing how expensive oil might get, with some believing prices have been pumped up by speculators.

"I think it's a little crazy, but that doesn't mean that it can't get a little higher," said Gene Edwards, senior vice president of supply, trading and wholesale marketing at San Antonio-based Valero Energy Corp.

Heating oil, a key wintertime commodity in the East, rose 2.12 cents to a record $1.4068 a gallon in New York. And natural gas for November delivery rose 43.9 cents on the Nymex to $7.164 per million British thermal units, up 52% since Ivan made landfall in mid-September.

California's natural gas prices increased 49 cents to an average of $5.27 per million BTUs paid at border delivery points.

"The concern here is that this is a time of year when you should be building supplies for winter," said Flynn at Alaron.

Southern California Gas said Tuesday that higher natural gas costs could push residents' wintertime monthly bills 16% to 22% higher than they were last year. The company, a subsidiary of Sempra Energy, serves 18 million customers from San Luis Obispo to the Mexican border.

Natural gas fuels many of the State's power plants, so this could also mean an increase in the wholesale cost of electricity. That makes finding new supplies of Natural Gas all the more important.

LADWP seeks to boost Green Power

The City of Los Angeles wants to meet its goal of using 20% renewable energy--without accounting for hydropower from the Hoover Dam:

In a 12-2 vote, the council approved the plan by Councilman Tony Cardenas that requires the DWP to get 20 percent of its energy from renewable sources, excluding hydroelectricity generated at the Hoover Dam. Officials estimated the new mandate will eventually raise the average bill $2.60 a month.

"This does not preclude us from using the Hoover Dam for energy, but it forces us to determine that we will take other steps to meet our goal," Cardenas said.

Under state law, the DWP must get 20 percent of its energy from renewable sources by the year 2010.

Councilwoman Cindy Miscikowski, who with Councilman Tom LaBonge opposed the proposal, questioned why the Hoover Dam power was being excluded.

"All we are talking about when we include Hoover Dam is 2.5 percent of all our energy," Miscikowski said. "It makes no sense when we are looking at charging our ratepayers $2.60 a month more. That's asking an awful lot of ratepayers."

Brian D'Arcy, business manager of IBEW, Local 18, which represents DWP workers, urged the council to include the Hoover Dam electricity as a green power source.

"We want to see the DWP competing on a level playing field with other utilities in the region and the state," D'Arcy said.

I do not understand the logic behind the IBEW argument. LADWP does not face competition or deregulation as a municipally-owned utility. The only reason to include Hoover power as "renewable" would be to increase the amount of money taken in from green-power surcharges, which could then be kicked back to the unions.

Related: Damn the Dam [LA Voice]

Tuesday, October 05, 2004

Bipartisan consensus for LNG?

Energize California's Jean Munoz gives a second-hand report on an energy conference held last Friday:

Last Friday a close associate attended an energy conference and reported back a variety of interesting topics of discussion on LNG and alternative energy, or "renewables."

Attorney General Bill Lockyer talked openly about the need for LNG and also the necessity "to get moving" on LNG projects in the state due to the potential for another energy crisis…since he is a leading contender for Governor and arguably he could be running against Governor Schwarzenegger in 2006, that means there appears to be a consensus building on the subject - cutting across partisan lines.

Governor Swarzenegger's representative Dennis Albiani talked about an "impending energy crisis" and the need for an appropriate mix of conservation, renewables, and demand side management as important to fixing the problem but also that the Governor has the goal of keeping power generators in-state --- "10 players in 10 years" --- was his mantra. Albiani reiterated one of Arnold's campaign promises that the Governor has "a true commitment to make renewables 20% of the state's energy portfolio by 2010…other goals include fixing the energy procurement process, moving municipal utilities towards using more renewables in their portfolios…Governor also working with other Western states governors to add a significant chunk of renewable power in the west…Albiani said that after the Governor is done with the California Performance Review that the Governor will turn his full attention to energy market restructuring with a significant emphasis on diversifying energy markets, fuel sources…he'll try first through legislation and then through the Little Hoover Commission process.

Interesting developments….sounds like bi-partisan consensus is starting to build at the highest level of governments on 1) the need for some level of renewables in the state's energy portfolio and 2) the recognition of the necessity of LNG in the state's energy future...

If you are not reading her website, you should check in regularly for updates on LNG, renewable energy and California's future...and I'm not saying that just because this site is listed under Energy News and Views!

Economic Summit considers Energy demand pricing

Yesterday, Governor Schwarzenegger convened his Council of Economic Advisors, and among the discussion topics was how to level off energy demand with market-based solutions:

What Schwarzenegger and the economists said to each other in private was not reported, but apparently the governor got some advice about how the state might approach its problems from a free-market standpoint.

George Shultz, the former Ronald Reagan adviser who chairs the council, told reporters later that they talked about such things as altering the pricing of electricity to reduce peak demand and thus lower the need for more power plants. And they got a briefing on California's deficit-ridden budget.

Market-based solutions should also be considered on the supply side of the energy equation--such as opening new markets for energy imports.

AES to build generation in California

In encouraging news for California as it hopes to boost electric supplies, independent energy company AES says it plans to build more generation in the State:

Independent power supplier AES Corp., encouraged by an improved outlook for California's electricity market, said Monday that it planned to build more generating plants in Southern California.

AES said the new power plants, which could take several years to begin operation, would "reduce the risk of power shortages" in the state. But some industry observers, while applauding AES' action at a time when state power usage is at record highs, caution that California still faces potential power shortages in the next three years.

Although AES is planning to add as many as 500 megawatts of electricity — enough to power about 375,000 homes — California is poised to lose 4,000 to 8,000 megawatts in the coming years from aging power plants that are expected to be shuttered
The "peaker" plants are in addition to AES's existing 4000 MW of natural-gas powered generation.

Monday, October 04, 2004

Sempra demand predictions questioned

Sempra Utilities--owners of San Diego Gas and Electric and the Southern California Gas Company--have been crying "crisis" over the future of natural gas supplies. Now, opponents have begun to question the need for more natural gas supplies--specifically LNG--based on a California Energy Commission projection:

"All experts agree that the current infrastructure and natural supply will be insufficient," PUC Commissioner Susan Kennedy said, before voting to approve LNG shipments. She also urged action to stem rising prices.

However, the California Energy Commission forecast late last year that supplies of natural gas will be adequate for the foreseeable future. The state imports 85 percent of its natural gas via conventional pipelines.

Although some outside sources are declining, the energy commission said, growing imports from the Rocky Mountains will offset production declines in California and elsewhere.

That forecast was issued before the PUC voted to require California to derive 20 percent of its electricity from renewable sources by 2010. Dave Maul, who oversees monitoring of natural gas supply and demand at the energy commission, said he expects that commitment to cut the growth in California's demand for natural gas from 1 percent annually to 0.5 percent.

While conservation on the retail level might reduce demand for Natural Gas, there is no denying that Natural Gas will play an increasingly important role in firing the State's electricity plants--and therein lies the basis for a true crisis.