Unions seek to re-regulate energy in California

The Golden State's labor unions are looking to flex their power over the energy industry and are planning a ballot measure to do just that:

The initiative would ban future purchases of power on the open market, called "direct access," and require customers to purchase power from regulated utilities.

Schwarzenegger wants some market access in the solution to the flawed deregulation that led to soaring power costs in San Diego in 2000, pushed the state's largest utility into bankruptcy, contributed to blackouts, and left ratepayers with large long-term debts.

Electricity Industry Prepares for Long Summer

California's electricity industry is taking special measures to make sure it keeps the lights on this summer:

-- Industry has identified and contracted for additional electricity supplies

-- Transmission owners are set to complete critical transmission upgrades to relieve bottlenecks

-- ISO will hold its Summer Workshop training series for ISO and industry dispatchers so they are familiar with summer operating procedures

-- Save-A-Watt Voluntary Load Reduction Program in place, with industry associations ready to call on their members to curtail electricity usage when asked to do so.

-- Flex Your Power NOW! media bulletins will let consumers know when conserving electricity will help out the grid

Court may halt conservation measure

Californians hoping to make it through the summer without blackouts suffered a blow yesterday as a Court ruled against a key conservation measure in San Diego:

The California Public Utilities Commission judge reviewing so-called critical peak pricing plans from San Diego Gas & Electric and two other large utilities concluded there was insufficient time to implement the programs this summer.

The judge, Michelle Cooke, instead suggests considering similar plans for next year or 2007 as part of a comprehensive rate redesign.

At the earlier urging of the commission, SDG&E had presented a proposal to triple rates for the largest consumers of power during peak demand periods, bringing rates to twice the highest seen, including during the state's power crisis of 2000 and 2001. These large consumers have advanced meters that allow for time-sensitive rates.

By discouraging power use during the critical periods, SDG&E concluded that the region's peak power demand would be reduced by about 28 megawatts. The region's all-time record usage was reached last summer at slightly more than 4,000 megawatts.

Congressman to push Hydrogen Highway

While Japanese Automakers push hybrid technology, German and American carmakers are looking to the next fuel technology: Hydrogen. For hydrogen cars to be successful, however, a network of hydrogen fueling stations needs to be built. Now, a California Congressman is leading the charge:

U.S. Rep. John Doolittle, R-Roseville, and other dignitaries at a Tuesday morning press conference, praised $5 million in federal funding that is coming to California to help establish a network of hydrogen fueling stations along a "Hydrogen Highway" designed to extend the mobility of emission-free vehicles.

The Department of Energy grant will help fund the California Hydrogen Infrastructure Project, a partnership among public agencies, car manufacturers and other private corporations pushing for a hydrogen economy.

The project, led by Pennsylvania-based Air Products and Chemicals Inc., is a five-year plan to build 24 fueling stations throughout California. The sites are expected to be in Northern California and the Los Angeles basin.

The Hydrogen Highway is one of the environmentally-friendly promises made by Governor Schwarzenegger, and with this money, it may actually become a reality.

Transit agency seeks natural gas source in Ventura County

SCAT, the regional transportation agency in Ventura County, looks like it will finally secure a new supply of natural gas to fuel its busses:

South Coast Area Transit might finally get natural gas pumped to its Oxnard fueling station today, nearly a month after its fuel supply was suddenly cut off and bus service disrupted.

A bypass around a ruptured pipeline that normally carries natural gas to the station was scheduled to be installed and working today, but whether that would happen on time or not was unclear Friday.

The Southern California Gas Co. pipeline near Piru ruptured in a landslide Feb. 28. After canceling all bus service the next day, SCAT resumed limited service using diesel buses borrowed from nearby transit agencies. Gas has also been trucked to Oxnard by the company, but not on a consistent basis, according to SCAT officials. A modified bus schedule has been in place for the past several weeks.

Gas Co. officials said they hope the bypass will be in service today.

Ironically, a dedicated source could be online for SCAT and other local customers in a few years if State and Federal agencies approve the Cabrillo Port liquefied natural gas terminal.

However, the same local leaders struggling to find natural gas they can compress and put on City streets, are quesitoning the safety of having a natural gas facility 21 miles offshore from Oxnard!

Gas price predictions fuel thoughts of Transportation Spending

Gas experts in California see prices continuing to rise--but only up to a point. The market will not bear widespread prices over $3 a gallon:

Like most businesses and consumers, Mendez is pondering the possibility that gasoline might hit $3 per gallon this year in Orange County. New signs would include the number "3" with a decimal point.

"We're as high as we've ever been,'' she said. Still, she's not sure if Orange County will see $3 for a gallon of regular soon. "It would have to go up a lot."

Industry experts agree, saying $3 is not in the cards for California. Prices should rise between now and mid-April, before leveling off, but "$3 is hyperbole," said Tom Kloza, chief oil analyst at the Oil Price Information Service, a trade publication that tracks prices.

Monday, the state's average for a gallon of regular gasoline reached $2.376, up 6.4 cents from last week.

The upside of rising gasoline prices is an increase in revenues on the sales tax charged on gasoline. The increase, as well as other rising State revenues, could mean that funds previously taken away from Proposition 42 transportation projects could begin to flow again:

State finance director Tom Campbell said Monday that gas-tax money that's been diverted to balance the state budget could soon be used for its voter-intended purpose of repairing and building roads.

Prop. 42, approved by California voters in 2002, dedicated gasoline sales-tax revenue to road and transportation projects.

The measure contained a provision that let lawmakers borrow the money in lean years to close state budget gaps.

That's what the state has done, directing $2.1 billion of Prop. 42 money into the state general fund since the 2003-04 fiscal year.

Ethanol plans fuel debate, price fears

Plans to build an ethanol plant in California are spurring debate and fears over even higher gas prices for Californians:

Backers say the $20 million Goshen plant, two months from completion, could be the opening shot in an ethanol-production boom that will bring investment, employment and economic development to rural California. Developers are close to obtaining financing for big plants in Madera and Pixley, and more could follow.

"Ethanol itself has become a mainstream fuel in California," said former California Secretary of State Bill Jones, an investor in the Madera plant. "It clears the air; it provides jobs when plants are built."

California officials, however, have mixed feelings about ethanol.

They like the idea of a new California industry and acknowledge how prevalent ethanol has become. But though its backers tout ethanol as a cheap and clean fuel additive, state officials say it sometimes can make gas more expensive - and not always cleaner.

With gas prices in California averaging $2.37 a gallon and climbing, state officials are pressing the federal government to waive the mandate that requires the use of ethanol in most California cars.

"We don't think it's needed," said spokesman Jerry Martin of the California Air Resources Board, the state agency that regulates fuel recipes.

Without the federal mandate, "the bulk of refiners would sharply curtail their use of ethanol," he said.

Weintraub: Long Term Solutions Unavailable for Now

The Sacramento Bee's Dan Weintraub examines just how close Southern California may be to an energy crisis this summer and laments that the real solutions are not quick enough to fix what ails us:

The area in Southern California outside the communities served by public utilities will need 27,000 megawatts at peak to handle a prolonged heat wave this June, and as much as 29,000 megawatts for a similar scenario in September. But projections show that supplies will provide only a 7 percent reserve margin if that weather occurs in June, the bare minimum that managers say is necessary to safely run the grid. By September, if a similar scenario unfolds, even that reserve margin would be gone.

The one thing that can fix this problem in the long-term - building more power plants to serve the growing demand - is not available as a solution in the short term, because it takes too long to get a plant sited, financed, permitted and built.

About 1,400 megawatts of new or restored generation are already in the pipeline and have been counted on for the summer's projections, but even that new juice is balanced by the expected retirement of nearly 800 megawatts that the state used to get from two aging and obsolete plants.

Another possible solution - charging customers based on the actual cost of the electricity they use - would help by ending the inefficient practice of letting people and businesses who use power when it is most in demand pay the same as those who shift their use to times when the resource is in relative abundance. But that change would require the installation of modern "smart meters" and a new, dynamic rate structure that politicians and regulators have been slow to embrace.

Ratepayers subsidize LADWP Pensions

Over at BoiFromTroy, who has been blogging prolifically about Social Security reform and Governor Schwarzenegger's pension reform, we learn the following..."The Los Angeles Department of Water and Power is setting aside $100 million a year in ratepayer money to gradually cover a $1.3 billion unfunded liability to pay lifetime health care benefits for its retired workers, the Daily News has learned."

That's right, money is being secretly set aside from electricity rates to pay for people's retirements. Now DWP still gives its customers a good deal compared to the investor-owned utilities, but as a public agency, the problem seems endemic.

Evironmental Groups sue over Electric Generation

The ongoing struggle between energy and the environment ratcheted up a notch in Southern California:

In legal papers filed with the state Supreme Court, environmentalists have accused California energy regulators of violating state law by approving an expansion of the El Segundo power plant without requiring operators to study the potential harm to marine life.

Santa Monica Baykeeper and Heal the Bay alleged in the filing last week that the California Energy Commission went against state recommendations to study the effects of large water pipes that suck in and destroy trillions of marine organisms every year.

El Segundo plant operators plan to increase the amount of Santa Monica Bay seawater pulled in by 25%, for an annual total of about 127 billion gallons. The water is used to cool the plant's generators.

While the environmentalists claim that they do not oppose the plant and do not want to cause another energy crisis, so they would rather let both happen as an unintended consequence of their actions.

California energy sufficient but tight for Summer 2005

California may be escaping summer blackouts by a whisper if the latest energy forecasts hold true:

California appears to have sufficient energy supplies to meet summer demand, an updated California Energy Commission outlook presented Wednesday said. But supplies may be a touch tighter than previously expected in Southern California during hot weather, according to the assessment...The commission expects 802 megawatts of new power to come online in Northern California this summer, and an additional 1,164 megawatts to come online in Southern California, a commission official said.

Nonetheless, the State should be planning under the assumption that one summer--be it 2005, 2006 or 2008, there will not be enough electricity or natural gas to meet demands!

California Vineyard goes Solar

With soaring energy prices, some of California's traditional industries are looking to the heavens for power:

Cooper-Garrod Vineyards officially commissioned its solar power system at a recent ceremony timed for the first day of spring. Saratoga Mayor Kathleen King officiated, and was joined by over 100 local dignitaries, visitors, wine aficionados and equestrians.

Cooper-Garrod is a family owned and operated 28-acre estate vineyard and winery located above the village of Saratoga on un-irrigated hillsides in the eastern Santa Cruz Mountains. This is the second Santa Cruz Mountains winery to install an Akeena Solar system in a year.

The 17-kW system is used to run the tasting room, wine offices, stable offices and riding-arena lighting. The 96 rooftop solar modules will replace the equivalent 22,000 kWh of energy previously bought from PG&E each year.

Platform Grace LNG Plan scrapped?

Crystal Energy had proposed placing an LNG receiving terminal off the Ventura County Coast, competing with the nearby BHP Billiton Cabrillo Port project. But according to a Malibu-based website, those plans may be on hold. According to Citizens Against Crystal Energy, Crystal Energy's partner, Veneco, has applied for permits from the State Lands Commission to drill for oil at Platform Grace--which, if approved, would be incompatible with operating an LNG terminal at that location.

Fuel Efficiency=Patriotism?

There are lies, damned lies and statistics...and an advocacy group puching for greater fuel efficiency has some interesting statistics out:

The poll is cited in the launch of 40mpg.org, a nonpartisan group advocating for an average federal fuel efficiency standard of 40 miles per gallon. The survey also found three out of five of those who consider themselves conservatives (57 percent) agree that buying a more fuel-efficient vehicle is a patriotic act, as do 67 percent of Nascar fans

Australian Consul calls for California LNG

John Olsen, Australia's Consul General to Los Angeles, writes in today's Daily Breeze about potential energy symbiosis between California and Down-Under:

It's no surprise that I am suggesting that an Australian company be given the chance to provide a portion of the clean power this state needs. The proposal makes sense on numerous levels. First, BHP Billiton is the world's largest diversified resources company and an outstanding corporate citizen.

Also, while Australia is both reliable and competitive in global LNG markets, what distinguishes our nation from others is that it is the only western nation and ally of the United States that is a significant LNG exporter.

As America's demand for natural gas increases and its supplies dwindle, Australia will make an ideal trading partner, given its high standards in construction and maintenance as well as its highly-skilled and technologically advanced workforce. And Australia shares America's commitment to strong environmental and labor laws.

Most importantly, Australian companies have an impeccable LNG safety record. Of 1,600 shipments over 20 years, there has never been an incident nor a safety breach.

Australia has more than enough natural gas to supply Californians with a safe, reliable and abundant supply of natural gas for decades to come. And securing additional natural gas supplies will be critical in preventing another energy crisis in the state.

As this state-of-the-art technology demonstrates a lasting benefit for California, there is no reason why LNG cannot play a greater and more beneficial role in the South Bay and Harbor Area cities as well.

My country stands willing and able to work with America to help energize the future of the Golden State.

Ventura Residents decry LNG Scare Tactics

Residents in Ventura County are fighting back against the Anti-LNG scaremongerers:

As for safety, everything I have read is nothing but scare tactics.

I read an article about gas pipe lines being placed under schools. That means you would have to tear up the schools to place the pipelines. Scare tactics. I hear of large, high-pressure gas lines going into the streets that can blow up. Scare tactics.

The funny thing is, the gas lines are already there. They supply the gas to your house and mine. I live within a half-mile of a 30-inch, high-pressure gas line. This gas line has been in use for more than 35 years with no problems, and the general population does not even know it exists.

The main person against these projects does not want the platform off the coast because he thinks it will ruin his view of the ocean.

It seems the Malibu Environmentalist movement is contagious!

Edison rates to rise in April

Natural gas costs are forcing Southern California Edison customers to pay higher rates, beginning in April:

Average rates charged to Southern California Edison Co.'s 4.6 million electricity customers will jump about 5% next month, with the biggest share of the increase falling on residential customers, according to a pair of decisions issued by the state Public Utilities Commission on Thursday.

Beginning April 14, residential ratepayers who use more than 350 kilowatt hours per month — about 60% of the total — should see their bills go up by 7% to 8%, adding about $5 to their monthly bill, Edison said.

...Edison, a unit of Rosemead-based Edison International that serves much of Southern California outside the cities of Los Angeles and San Diego, blamed the increase on a combination of factors. These include higher natural gas costs and contracts with independent power generators to ensure that the lights will stay on during summertime surges in demand.

Prices for natural gas, the fuel of choice for most California electricity generating plants, are expected to continue trending upward. Natural gas, mainly imported from Texas and the Rocky Mountain region, has more than doubled in price since January 2002.

Kind of makes the case for LNG, doesn't it?!?

Sempra takes annual meeting to London

San Diego Utility Sempra is taking its shareholders across the pond for this year's annual meeting:

Some local shareholders of Sempra Energy – parent company of San Diego Gas & Electric – have in the past complained about needing to travel past the county line to attend the company's annual meetings.

This year, those reluctant travelers may really have something to complain about when the San Diego-based company holds its annual shareholders meeting next month in London.

Doug Kline, a company spokesman, said the city was chosen to allow the board of directors to review European operations, to provide access for foreign investors and to raise the profile of the company, whose subsidiaries include Southern California Gas, as well as San Diego Gas & Electric.

Of course, choosing London for the meeting is also a convenient way to avoid all the environmentalists, surfers and others protesting their site selection for an LNG project across the border in Mexico.

Refinery regulations stiffen

Bay area drivers already pay among the highest gas prices in the nation, and due to a recent move by the EPA, they will be guaranteed to be paying more:

In a rare move, the U.S. Environmental Protection Agency has ordered regional air regulators to amend pollution permits issued to four local refineries, saying changes are necessary for "better protection of public health and the environment."

The decision, announced Thursday, partially addresses concerns by two environmental groups and several labor unions that the air permits issued by the Bay Area Air Quality Management Board did not aggressively control or monitor the refineries' emissions.

"As far as the EPA went, it's good. But they should have gone farther," said Will Rostov, staff attorney for Communities for a Better Environment, one of the groups filing a petition.

At issue are so-called Title V permits addressing nearly 65,000 conditions governing every facet of operation at four Bay Area refineries: Chevron in Richmond, Conoco Phillips in Rodeo, Tesoro in Martinez and Valero in Benicia.

While we're all for environmental protection, the timing couldn't be worse. With one gas station in California already surpassing the $3/gallon mark, further regulation and potential retrofitting of refineries will only add to consumers; costs.

Likewise, expect Southern Californians to see similar effects from the BP settlement with the AQMD over its Carson refinery.

San Diego Utility Continues Push for Time-Metered-Power

San Diego Gas and Electric has finally put the details on its much-talked-about proposal to charge customers by when they use their power--not just how much they use:

The plan that SDG&E has presented state utility regulators would require spending $420 million over four years to remove old power meters and install advanced meters for each of its 1.3 million customers. But the investment would provide savings of $660 million to customers over the long run, according to SDG&E.

The utility said the meters and new rate plan would trim peak power demand by 360 megawatts – equivalent to what's used by nearly 360,000 homes – and eliminate the need for several so-called peaker plants, units that are run only to meet demand on the hottest days of year.

The new meters also would eliminate the need for human meter readers and provide the utility with more immediate power-grid information, potentially reducing the likelihood or the duration of outages.

Oil prices keep rising

After seven semesters of economic courses, one basic theory seemed to apply to everything...everything boils down to the equilibrium value. The first equilibrium value you learn is that between supply and demand.

As demand increases and supply stays steady, prices increase. That's what's happening in the global oil markets as developing nations begin to draw upon limited global resources.

Likewise, if you create new supplies, prices will go down. Hence, the push to drill in ANWR, which was approved by the US Senate yesterday.

Economics is easy. People should pay more attention to it!

Berkeley to offer incentive to Hybrid Owners

If you are lucky enough to get your hands on the new Lexus 400rh, you will get an added benefit on top: free parking in Berkeley, and not just on Indigenous Peoples' Day!

Free parking in Berkeley soon may be added to the laundry list of perks for driving a hybrid car.

City budget and energy commissioners will hammer out details of the City Council's idea to allow those who buy hybrid cars in Berkeley up to one-hour blocks of free parking anywhere in the city for one or two years.

"There's nothing in the city of Ber-keley more prized than free parking," Councilmember Linda Maio said. "People love free parking and hate parking meters ... what a benefit to pull into a parking space and not having to fish around for change. And we are sending a message that this is important and we are willing to make a contribution."

Also of note in Hybrid news is the launch of a diesel-electric hybrid train engine in Southern California.

Gas Prices continue to rise

It feels good to be presient, except when I have to fill up my tank:

The state's average price for a gallon of unleaded hit $2.31 Tuesday, according to the AAA of Northern California auto club. That's 8 cents higher than last week, 22 cents higher than a month ago and 36 cents more than January's low.

Much of the Bay Area has seen gasoline prices shoot up 24 cents during the past month. San Franciscans now pay $2.35, compared with $2.10 in mid- February. San Jose's prices rose 26 cents during the month, reaching $2.26, while Oakland's jumped 24 cents to hit $2.38.

"The price of gasoline is going up almost every day," AAA spokesman Sean Comey said in a statement.

Actresses Arrested in EV Protest

It's a story that is truly, "only in L.A." Two actresses were arrested yesterday trying to block the scutling of GM's electric vehicles:

Alexandra Paul (“Baywatch,” “Christine”) and Collette Divine (who may or may not be an actress as well) were arrested yesterday while blocking the path of trucks hauling the cars to the crusher. The two, part of a group of activists who offered to pay $1.9 million for the vehicles, were booked for “suspicion of failing to obey an officer...”

Oil expert calls for LNG

Joe Sparano, president of the Western States Petroleum Association, knows a thing or two about meeting California's energy needs. Therefore, it is no surprise he's calling for the construction of terminals to receive liquefied natural gas:

Nearly all of our state's current and future electricity generating plants are, or will be, powered by clean-burning natural gas. In addition, consumers rely on natural gas in their homes for heating, cooking and hot water. Natural gas also is a growing additional source of clean fuel for thousands of buses and other commercial vehicles.

As a result, the demand for natural gas in California and across the western United States is increasing every year. Yet, California produces less than one-fifth of what it uses -- a mere 16 percent of the natural gas consumed in the state. Increased demand has led to dramatically higher natural gas prices that have shown up in higher utility bills. LNG is an important option to increase natural gas supplies for our state. LNG is simply natural gas converted into a liquid form so that it can be economically transported from places where natural gas supplies are plentiful to where natural gas is needed to meet energy demand. Increasing supplies of LNG and natural gas would help keep utility bills down for businesses and consumers.

PG&E Launches Clean Energy Investment Firm

Pacific Gas and Electric's bankruptcy may be good for the environment, in an odd twist:

One last twist in Pacific Gas and Electric Co.'s bankruptcy case may help create clean energy firms in California.

When the utility emerged from bankruptcy court last year, it agreed to spend $30 million to establish an investment fund that would nurture young companies focused on clean-energy technology. Their products could include ways to tap renewable energy, improve power storage or boost efficiency.

The investment fund now has a name -- the California Clean Energy Fund -- a nine-member board and a president. Today, the fund will announce that it has teamed with three Silicon Valley venture capital firms to search for promising startups.

That's a good start. Even if alternate energy will only provide a slim portion of our electricity needs, investments in it--and clean-burning fuels like natural gas--are important for the State's future.

DWP lowers rates for water customers

Although not directly energy-related, customers of the DWP will get a reprieve in their water rates for the next two months:

The record rainfall boosted Los Angeles' water supply so much that the city plans to reduce customers' water bills by 9%, but many other parts of Southern California aren't likely to see similar rate cuts.

The Los Angeles Department of Water and Power said it is able to reduce bills by an average of $2.60 per month because a prime source of local drinking water, the Eastern Sierra Nevada, has seen above-normal snow levels for the first time in six years.

Interestingly, water rates were just increased by 11% in the last year, so this effectively brings the price back to previous levels.

Auto Clun chastizes EPA

The Auto Club is questioning the EPA Mileage estimates and comes in with some interesting figures. Who knew that a BMW Z4, extimated to get up to 29 miles to the gallon by the EPA gets only 15 in the real world?!?

I know that the only time I come close to my EPA estimated MPG is on long road trips...but these differences are striking.

GM Daimler Hybrid gas savings minimal

Too often in California, we are caught debating whether to adopt technology-based standards or performance-based standards. When the legislature passed the Hybrid HOV bill last year, they chose both standards, whereby a vehicle had to be both hybrid and get a certain gas mileage to ride in the fast lanes. Good thing, because some hybrid cars won't save all that much gas. As Jalopnik notes:

In a market where the 60-mpg Toyota Prius sets our expectations for hybrid-drive fuel efficency, the GM-Daimler system, which can eke out 20mpg (just slightly more than a traditional V8) looks almost like a waste of pointy-headed resources.

GOP seeking Alaskan oil...again

If you thought the question of drilling in ANWR died with the last energy bill...think again. Republicans are pushing anew:

Senate Budget Committee Chairman Judd Gregg (R-N.H.) said he would add into a budget bill a measure to allow companies to drill for oil and gas in Alaska's Arctic National Wildlife Refuge.

Because Senate rules treat the budget measure differently from other legislation, successfully attaching the drilling provision to it means it could pass with support from 51 senators. That would end opponents' chances to block the drilling measure with a filibuster. A filibuster would force supporters to find 60 votes.

Incentives make Solar ownership profitable

Sacramento is considering measures to put 1 million solar panels on people's homes. Yet resourceful individuals are finding that they can make money photovalically already:

Just last June, Mill Valley, California, resident Greg Simon threw his first "10 Megawatt" bash, celebrating his solar electric system's generation of more than 10 million watt-hours of sun-powered energy.

But Simon had more to celebrate than the satisfaction of making his own electricity. A savvy solar shopper, he had taken advantage of several state and county renewable energy rebate programs, which he says cut the cost of his system in half and saved him almost $23,000. Although Simon's 4-kilowatt photovoltaic (PV) system cost $43,000, he immediately received $18,000 in rebates from the California Energy Commission (at $4.50 per watt). He also received state credits totaling $4,000 and a $300 rebate from the county's alternative energy program. When all was said and done, Simon says he paid less than $20,000 - less than the cost of a new car! - for his renewable energy system. And, the savings haven't stopped there: When his electric production exceeds his consumption, Simon's net-metering contract with the utility allows him to sell the excess energy back to the grid and realize a credit on his bill.

Skies Clear, Sky Blue; Gas Prices Move

Not to sound prescient or anything, but as predicted here, gas prices are now responding to increases in the price of oil. And the media is going crazy:

It's only March, but gas prices already are topping $2.20 a gallon in the East Bay and Peninsula, and some analysts say prices could reach a record $3 a gallon later this year.

"Gas prices this summer in California could hit $3 a gallon," said Phil Flynn, energy analyst with Alaron Trading Corp. in Chicago. "If everything goes smoothly, we won't hit $3 a gallon in California. If anything goes wrong, we could hit $3."

It's a sticky situation. Crude oil prices are surging. Global supply is tight, barely meeting the demand fueled by China, India and the United States. Supply is particularly tight in California, where refiners have been pumping out gas at near-capacity levels and now are producing the more costly but cleaner-burning summer blend fuel.

Add in taxes of more than 50 cents a gallon, and you've got a formula for higher prices. Average local prices for regular unleaded gasoline have risen more than 20 cents a gallon in the past month to $2.26 a gallon in the San Francisco area and $2.21 a gallon in the Oakland area, AAA said Monday.

Try $2.45 for one of the "cheap stations" in Los Angeles this morning!

General Motors explores hydrogen storage as fuel alternative

Before we can build a hydrogen highway to promote the alternative to gasoline, it's important to have a safe, reliable way to store it. General Motors is now exploring the possibility:

General Motors officials gave a progress report Monday on the company's efforts to create the automobiles of tomorrow by developing hydrogen fuel cell technology.

The Detroit automaker is working with government scientists at Sandia National Laboratory in Livermore to design new methods for storing hydrogen fuel -- one of the biggest challenges to bringing hydrogen-powered vehicles to market.

"We're looking to literally reinvent the automobile," said Larry Burns, GM's vice president for research, development and planning.

Could Schwarzenegger's prodding be behind such a change of heart?

NorCal forum to focus on renewable energy

Northern Californians seeking more information on programs to boost alternative energy can attand a conference Thursday in Chico:

The event is organized by North State Renewable Energy, led by Chico State University Provost Scott McNall and past City Councilor Dan Nguyen-Tan. The group promotes renewable energy and conservation practices. The plan is to form a technical advisory group with industry and university specialists, develop ties with state and national groups and come up with a plan for promoting renewable energy in the future.

Members include representatives from major public and private entities who view solar energy as economically beneficial and a way to help with environmental problems.

Topics to be tackled at the conference include the California Energy Commission renewable energy rebate program, Gov. Arnold Schwarzenegger's approach to renewable energy, residential applications, large rooftop solar projects and solar, agricultural and local government use of alternative energy.

Flying J to take over Bakersfield Refinery

A truck stop has saved a California refinery from closing--and with an anticipated increase in gas prices, the timing couldn't be better:

The Bakersfield refinery once doomed to closure by Shell Oil Co. will be turned over next week to Flying J Inc., a Utah truck-stop operator that plans to double the plant's gasoline production.

Flying J, which runs one of the nation's largest truck-stop chains and had estimated revenue of $7.5 billion in 2004, plunked down a reported $130 million for the refinery. Its output represents only a small slice of the California market, but it's a profitable one, given high gasoline and diesel prices.

You'd have to imagine that consumers not using the truck stops would only benefit if excess inventories were sold to stations outside the Flying J chain.

LNG Critics promise money to grow on trees

While it's not quite a promise that money will grow on trees, critics of liquefied natural gas are claiming that domestic production of the resource will increase 20% in the next 20 years:

Powers, chairman of the Border Power Plant Working Group, disputed Meheen's argument that domestic natural gas supplies are dwindling. Powers said domestic production is expected to increase by 20 percent over the next 20 years.

He said California should concentrate on energy conservation and investing in renewable sources such as wind and solar power. "The cheapest way to go forward is with aggressive conservation," said Powers.

While Bill Powers' claims about domestic production are dubious, it is important to focus on alternative energy, but even the most aggressive plans--like Los Angeles' 20% renewables--will not mitigate the need for LNG in California.

Surfers oppose Baja LNG Plant

Global Surf News comes out swinging against Sempra and ChevronTexaco plans to build liquefird natural gas terminals in Mexico to serve the California market:

In an attempt to flee environmental and safety regulations in the U.S., Sempra/Shell and Chevron/Texaco are pushing forward with their proposed LNG regasification plants in Baja California. Pro Peninsula and a global coalition of organizations and citizens are continuing the campaign to halt the destruction of Baja California’s natural environment through ongoing workshops, press conferences, marches and other events in Ensenada, Tijuana, and southern California.

These projects are designed to serve the U.S. market. Mexico is not the environmental dumping ground of the U.S.

And, dud, that's totally bogus!

Gas futures soar; expect higher prices at the pump

Oil and gas futures topped $55 a barrel yesterday before settling down on fears of declining production and soaring demand:

Oil's latest jump came on top of two weeks of increases, which have already reached the pump. Los Angeles motorists have seen the average price of regular self-serve gasoline climb 4 cents in the last week to $2.236 a gallon, AAA reported. Analysts warn that more increases are on the way, courtesy of the oil markets.

"We don't know how high it will go, but we don't see any way it will go down," said Carol Thorp, a spokeswoman for the Automobile Club of Southern California. "There doesn't seem to be any good news on the horizon."

U.S. light crude for April delivery zoomed to $55.20 a barrel before fading late in the day to settle at $53.57 a barrel, up 52 cents, on the New York Mercantile Exchange. Thursday's trading high was just below the intraday trading record of $55.67 set Oct. 25. The record closing price for the U.S. benchmark grade of oil, reached twice in October, is $55.17 a barrel.

Of course, once these prices are reflected at the pump, you can bet that some politicial (Barbara Boxer perchance?) will be shocked and levy complaints against the oil companies, charging that they are gouging consumers.

Who's running LADWP?!?

Los Angeles Mayor Jim Hahn has been silent in response to a memo suggesting that the insane are running the assylum at the City's Department of Water and Power.

In the six-page memo obtained by the Weekly under the state Public Records Act, DWP Assistant General Manager Mahmud Chaudhry warns Hahn that those who would stop the pillaging of the nation’s largest public utility are powerless to act in the face of "the union’s ability to affect the lives and careers of top managers, the implicit threat of strike and Local 18’s influence on politicians running for office or re-election." Since last summer, DWP’s problems have been the subject of ongoing City Council reviews.

"The DWP has become a fox-run henhouse of epic proportion," Chaudhry writes. "The union now runs the department. They blur the line between . . . bargaining and criminal extortion."

The memo describes Local 18, which represents 98 percent of the DWP’s 8,000 workers, as a relentless bully, prone to manipulating the selection and decision-making of top managers and punishing those who resist, while extracting vast concessions for its members, who already earn more than other unionized city workers. It points to pay raises far exceeding the rate of inflation, "outlandish applications of benefits that spring up overnight" and contracting entities funded with public dollars but controlled by the union with no public accountability.

"By choosing union peace at any price, DWP leadership finds itself paying an exorbitant price," writes Chaudhry, formerly in charge of DWP’s largest power unit and now director of customer service. "Anxious to avoid conflict, management finally relinquished the duty — and with it the power — to exert control. With no one minding the store, it may be a matter of time before the union’s extreme bargaining advantage begins to impact the annual [revenue] transfer to the city."

Chaudhry, in the September 16 memo, urges the mayor to amend the City Charter to restore executive positions to civil-service status, institute mandatory annual performance evaluations and take steps to protect the city’s water and power supply against a strike. He claims that former general manager David Wiggs and acting general manager at the time, Henry Martinez, were beholden to Local 18, which had secured appointments for them based on union preference unrelated to performance or ability. "Favorite sons are protected from the consequences of their misdeeds, while rank and file see how well union cronies are treated," Chaudhry writes. "Conscientious managers are despised by the union, and tormented daily with false accusations, ridicule and personal attack. Those who associate with them can expect the same fate. Others soon equate ethical management with relentless retribution that can only be alleviated by vowing allegiance to Local 18." Wiggs and Martinez could not be reached for comment.

Power Politics enter Los Angeles Mayor's Race

In the final days of Los Angeles' Mayoral Campaign, an embattled Jim Hahn is hoping to score points by linking his opponents to failed energy giant Enron. But he'd better hope the City's own ties to that firm don't get brought up in the news cycle by next Tuesday:

...if anyone should be accused of having a cozy relationship with "Kenny Boy" Lay, it would be Kenny's own boy, Jim Hahn, who has been defending the City against allegations of illegal energy trading and perjury to cover it up.

Whether that angle will make it through the media haze of the campaign's final days remains to be seen.

Bush Bonnevill Plan gets Booed

The Bush Administration plan to require the federally-owned Bonneville power plant to sell electricity at market rates is being derided:

Northwest lawmakers said Wednesday they have blocked a Bush administration plan to force the Bonneville Power Administration and other federal power suppliers to sell electricity at market rates.

Lawmakers from both parties had complained that the plan could boost energy prices in the region by as much 20 percent and cost Pacific Northwest ratepayers $1.3 billion.

Besides the Portland, Ore.-based BPA, which supplies power to four states in the Pacific Northwest, the plan also would affect three regional agencies that supply power to dozens of states in the South and West: the Colorado-based Western Area Power Administration; Georgia-based Southeastern Power Administration; and Oklahoma-based Southwestern Power Administration.

California regularly imports electricity from the Northwest and could be impacted by this move as well.

House Panel passed Hybrid Waiver

Although California legislators passed a bill last year to allow hybrid owners to drive solo in HOV lanes, enacting the measure required an act of Congress. The first step to gaining that approval passed yesterday:

The House Transportation Committee on Thursday approved a $284 billion highway bill that would include the waiver California needs under a state law that took effect Jan. 1 to open the HOV lanes to hybrid cars rated at least 45 miles per gallon.

The House committee's action sends the massive public works bill to the House floor, perhaps as early as next week. The Senate has yet to begin work on its version of the measure, but both chambers are under pressure to act before May 30, when the current law runs out just as the summer construction season is beginning.

The state Legislature approved a law last year to open HOV - high-occupancy vehicle - lanes to single-occupant hybrid cars as a way to encourage their purchase. The measure needs a federal waiver to give it authority for the car pool lanes in freeways, which are federally funded and managed.

EPA challenges Smart Car's claims

The Smart car may not be so intelligent after all. After claiming to get 60 miles per gallon, the EPA clocked it in at a mere 37 mpg:

Zap made a big publicity splash with its plans to sell the tiny two-seat coupe, promoting it as the most efficient gasoline-powered vehicle ever at 60 miles to the gallon and lining up thousands of orders.

But before the French-made ultra-mini could even think about hitting U.S. roads, the Environmental Protection Agency ordered the Santa Rosa, Calif., auto importer to scale back its fuel-efficiency claims.

The federal agency's fuel economy estimate for the Smart car isn't 60 miles per gallon — it's 37, sort of like a Honda Civic.

Steven Schneider, Zap's chief executive, said that the company's fuel trials showed the Smart delivering readings of 50 to 60 mpg and that he intended to ask the EPA for a retest. Meanwhile, Zap has pulled the 60-mpg boast from its website.

Energy Commission studies quality of Distributed Generation

The California Energy Commission has released results of its study on measuring the quality of distributed generation:

To help gather data from each site, Reflective Energies used a network of advanced ION® power quality monitors and software from Power Measurement (www.pwrm.com). According to Edan Prabhu of Reflective Energies, the findings of this study will help to promote an improved understanding of the DG-grid interface, “and in the long run, may help to support faster, more affordable and reliable interconnections between distributed generation assets and the California grid.”

To gather the necessary data, Reflective Energies equipped each site with one ION 7600 power quality monitor on the electric generator, and another at the “point of common coupling” where the utility power lines meet the customers’ power lines. These dual monitors helped to identify any changes in power quality, both when the DG was running, and when it wasn’t. Each device was configured to monitor multiple energy parameters — including voltage, frequency, waveform distortion, harmonics, and flicker — and report this data to a centrally located PC workstation, where it was evaluated using ION Enterprise® energy management software. The resulting information helped determine whether power quality events were initiated by the grid or the DG asset.

According to Edan Prabhu, the ability to continually monitor and analyze real-time and logged system data at multiple locations was a key element of this study, and an important step towards understanding the interaction between the grid and the DG assets. “As more such information is gathered,” Prabhu said, “the cumulative results of these studies will provide a better picture of DG-grid interface behavior, and help engineers to better understand and evaluate DG interconnections.”

If successful, distributed generation could allow companies to avoid potential price-gouging from incumbent utilities.

Power Paralysis Predicted

The North County Times criticizes Governor Schwarzenegger for promising energy fixes and leaving California with legislative gridlock:

Schwarzenegger promised to fix this mess with an energy policy. He missed several self-imposed deadlines, and still he has presented no comprehensive plan. After dropping some hints about reviving deregulation, the Republican governor retreated under withering opposition from Democrats who control the Legislature. Instead, the governor used appointments to the state's regulatory commission to force utilities into beefing up reserves.

The ad-hoc policy will protect against blackouts for a few years after some new generators are built, but there is much evidence that utilities are overpaying for the sudden buildup. Exhibit A can be found in southwest Escondido, where an unregulated sister company of San Diego Gas & Electric Co. is building a power plant. Instead of the company bearing the risk that its electricity will be needed, SDG&E's customers have already agreed to buy the plant at a premium price. A similar plant is being built in Otay Mesa by a private energy company ---- secured by a long-term contract with the utility that transfers most of the risk to local consumers.

On the surface, San Diego County's brave new energy future looks a lot like the central planning that ran California's electricity grid for a century. Indeed, the region will have far more power than it needs once the two new plants are completed (by summer 2006 in Escondido; maybe 2008 in Otay Mesa).

However, the reality goes to the heart of Sacramento's failure to fix its deregulation mess: San Diego County's other two non-nuclear power plants, in Carlsbad and Chula Vista, are more than 30 years old and nearly worn out. They are running only because consumers pay premium prices that allow them to operate with efficiencies that are horrendous by modern standards. When the new plants come online, power prices should logically fall with the region awash in surplus supplies of local electricity. But low prices would force the owners of the old plants to shut them down, thus ensuring a new round of blackouts and driving prices back up.

Schwarzenegger has said his vision of California's energy future involves private energy firms competing with local utilities to ensure that neither can gouge consumers. What he has delivered is precisely the opposite: Legislative paralysis and halfhearted initiatives have left consumers at the mercy of both regulated and unregulated energy firms alike.

Hopefully, it's not to late to prove their editors wrong!