Down Time.

Today is a travel day for me... doesn't look like there's much going on anyway...

I hope everyone has a great weekend (even you JJ!)...

Feel free to argue among yourselves while I'm gone... the comment thread is open!

Man Bites Dog

Even environmentalists are complaining about excessive regulation in California!

The environmental publication Grist, today has a piece about why California has fallen behind in the race to be the nation’s wind energy leader. The report lists all of the usual factors: lack of transmission capacity, birds, expensive real estate, etc., but it contains some pretty notable gripes that seem more at home in the Wall Street Journal than in Grist:

“Regulations, well-developed through the years, make it hard for developments to get off the ground.”

“…Texas provides property-tax exemptions to people with windmills on their land, California does not.”

“…wind could supply 20 percent of California's energy needs by 2020 -- up from less than 2 percent today. That sounds like the stuff of dreams. A more realistic goal may be catching Texas…”

Less regulation? Tax breaks for corporations? Wind energy potential is over-stated? Wow, who knew?

The Long and Windy Road [Grist]

Letting Market Forces Do Their Job.

We tend to prattle on about the need for free-market solutions for the implementation of California’s green energy mandate, but CalCEF V.P. Dan Adler’s oped in the California Progress Report raises the undeniable point that the markets are incapable of effecting this transition if they are handcuffed by existing impediments. It’s a thoughtful piece that is well worth a read:

A Clean Energy Future for California Will Need More Than Market Forces [California Progress Report]

Accounting for Green Energy.

The CEC is introducing a tracking system and registry for renewable energy produced and deposited on the grid. The system, called WREGIS (Western Renewable Energy Generation Information System), is designed to measure the actual production and use of green energy.

According to a report in North America Windpower:

“Data in WREGIS include MWh produced, fuel source, facility location, and all state, provincial and voluntary renewable energy program qualifications. One WREGIS certificate is issued for each MWh of renewable energy produced and deposited on the grid. The California Energy Commission notes that to prevent double counting in the system, each WREGIS certificate has its own unique serial number.”

California Energy Commission Launches RE Tracking System [NORTH AMERICA WIND POWER]

Hot About Gas Prices.

According to a new congressional study, the warm summer weather is going to cost California drives $228 million in inflated gasoline costs. The issue has nothing to do with refining capacity or simple supply and demand—you can blame physics for this one.

In hotter weather, liquid gasoline expands and the amount of energy in each gallon of gasoline drops. Gas is priced at a 60 degree standard and fuel pumps don’t adjust for the temperature.

Barbara Boxer is on the case, and the trial lawyers are already firing off lawsuits throughout the country claiming “unjust enrichment” by fuel retailers (the argument being that consumers are paying taxes at a 60 degree rate for gasoline at much higher temperatures, and retailers are pocketing the difference).

Retailers are respond with the predictable assertion that it’s too costly to make technological fixes to pumps that account for the change.

Is 'hot fuel' costing motorists? [Associated Press]

The Debate Over Carbon Taxes.

So yesterday Dan Sperling had an oped in the LA Times talking about why carbon taxes make no sense for the transportation sector in California (40% of CO2 emissions in California are from transportation sources). Instead, Sperling wants a low-carbon fuel standard.

Well today, the good folks at the Carbon Tax Center, in a remarkably civil rebuttal (for the blogosphere, that is), are calling B.S.

[How refreshing is it to see an advocacy group actually own up to its true purpose in its name? These guys couldn’t be more up front about the fact that they want to levy new taxes. If this were Washington, D.C., that same group would probably be called something like, “Citizens for Energy Efficiency and Climate Enhancement” or something similarly stupid and misleading. But, I digress….]

According to the CTC: “we estimate that a statewide carbon tax would draw 60% of all of its carbon reductions from the electricity sector (which is responsible for 42-43% of that state’s CO2), but only 10% from gasoline (which accounts for 20% of emissions).”

In the end, anyone can make numbers say anything so you’ll have to figure out for yourself who’s right.

Cha Ching.

On the road today, so short and sweet... courtesy of the AP:

Energy companies pay $84M in settlements over Calif. power crisis
The Associated Press

WASHINGTON—Two power companies will pay $84 million to settle claims against them stemming from the 2000-2001 California energy crisis, the Federal Energy Regulatory Commission said Thursday.

PacifiCorp, a unit of MidAmerican Energy Holdings Co., will pay $27.9 million to resolve charges that it manipulated the California and Pacific Northwest power markets in 2000 and 2001. MidAmerican Energy Holdings is a subsidiary of Berkshire Hathaway Inc.

In the second case, a unit of Houston-based El Paso Corp. will pay $56 million to resolve all outstanding claims against it.

The California Attorney General's office and Public Utilities Commission, as well as other state agencies, have agreed to the settlements, FERC said.

"These settlements put us another step closer to finally resolving the lingering issues from the Western energy crisis and returning money to consumers," Commission Chairman Joseph T. Kelliher said. "Settlements, not prolonged and costly litigation, have given consumers more than $6 billion in refunds."

Shares of El Paso rose 22 cents to $16.88 in midday trading Thursday.

Underwater Turbines.

Last year we panned the idea of using underwater turbines in San Francisco bay to generate electricity-- tidal energy. Well now a pilot project is officially on the table.

The AP write-up notes that there are a lot of hurdles to clear-- commercial marine traffic, impact on marine life, and the need to get permits from about two dozen agencies that have jurisdiction over the bay.

Regardless, that didn't stop PG&E from ponying up$1.5 million for the study. (I wonder if they wrote that check before the San Francisco Supes voted to dump them??)

Stay tuned...

San Francisco seeks energy from tides beneath Golden Gate Bridge [Associated Press]

San Francisco Dumping PG&E.

From Indymedia:

"In a surprisingly unheralded decision made just blocks away from corporate headquarters of the state's largest for-profit, investor-owned utility (PG&E), the San Francisco Board of Supervisors voted to organize a local customer base, leave the big utility, and begin to significantly "green" California's energy production locally. The Board’s June 12th vote was the “first reading” of the ordinances; a final vote is expected at the next meeting, June 19.

The Board voted 9-2 on ordinances researched and advanced for more than two years by San Francisco Supervisors Tom Ammiano and Ross Mirkarimi, making San Francisco a leader among dozens of California cities and counties that have formally expressed interest in or are actively working to become Community Choice energy Aggregators (CCAs). As Community Choice Energy gains momentum, and communities like San Francisco succeed in assuming local control of energy production, they can green the state, help avert climate change, and ensure both local energy security and reliably low energy costs for ratepayers. The San Francisco Board's decision this week, with its veto-proof 9-2 majority, demonstrates that local governments are taking the lead to ensure a clean, safe environment and affordable energy."

SF Supes Vote to Leave PG&E [Indybay.org]

SCOTUS to Power Companies: Take a Hike.

Dow Jones is reporting that the Supreme Court has refused to hear a case that alleged FERC could/should do more to use the Federal Power Act to order refunds to energy companies:

WASHINGTON -(Dow Jones)- The U.S. Supreme Court Monday rejected a case that deals with the Federal Energy Regulatory Commission's power to deal with wholesale electricity refunds stemming from inflated power prices during the 2000-2001 California energy crisis.

Several companies have challenged a ruling by the 9th U.S. Circuit Court of Appeals, San Francisco, that said FERC had broader authority than it was exercising to order refunds under the Federal Power Act. The Ninth Circuit ruling came in a proceeding initiated by California in the state's bid to recover funds from inflated electricity prices during the crisis.

The companies appealing the Ninth Circuit decision include units of Royal Dutch Shell PLC (RDS), AES Corp. (AES), PPL Corp. (PPL), PNM Resources Inc. ( PNM), Sempra Energy (SRE) and Portland General Electric Co. (POR).

High Court Turns Away Power Cos Appeal On FERC Refund Powers [Dow Jones]

Taxing Our Way To A Greener Tomorrow.

The Los Angeles Times came out in support of AB 1470, the proposed tax on natural gas that would create a subsidy for home solar water heaters.

As one commentor on this blog put it so eloquently when we batted this horrible bill around in April, "Tax natural gas to promote solar? So energy isn't expensive enough already? WTF is this guy doing? Unbelievable."

Yup.

We have a green mandate in California that is practically unachievable and the legislature's response is to tax its way out of the problem.

The best part of the Times' editorial though is the sub-headline:

"Special interests shouldn't be allowed to eclipse legislation making solar water heaters a better deal."

Let's parse that sentence, shall we?

First, "Special interests," from the Times' perspective are clearly the gas companies that are actively opposing the bill. However, the Times conveniently ignores the fact that solar power is beholden to more than a few "special interests" of its own-- all of whom are no doubt wearing out the soles of the Guccis walking the halls in Sacramento.

We've talked a lot on this blog about how solar has become the absolute darling of the venture capital community in Silicon Valley. Do you mean to tell me that a venture capitalist from Sand Hill Road doesn't qualify as a "special interest"?

Second, "shouldn't be allowed" to eclipse legisation... Really? Are we seriously talking about shutting people out of the legilsative process? That sounds like denying civil liberties to me... but, the Consitution be damned if your personal or corporate agenda does not mirror the media's!

Third, "making water heaters a better deal".... Here is a simple, unimpeachable truth: if a tax on every Californian who uses natural gas to light and heat their house is required to make solar water heaters economically viable, then solar water heaters are a bad deal to begin with-- period. Why are legislators trying to make a "bad deal" marginally better when they should be focusing on coming up with a legitimately "good deal" for consumers.

Solar power makes sense
Special interests shouldn't be allowed to eclipse legislation making solar water heaters a better deal.
[Los Angeles Times]

Arnold, What Have You Done For Us Lately?

John Krist of the Ventura County Star takes Arnold to task for talking tough on global warming but doing nothing to reduce California's reliance on carbon-based energy:

"It is unclear how California can increase its reliance on imported, carbon-based energy and simultaneously reduce the emission of carbon dioxide associated with it. Apparently, the state's climate-action governor is hoping someone else will resolve that paradox."

There's nothing inherently wrong with making a complaint cloaked as a question, but it's not productive to do so without offering a solution.

Krist completely ducks the lack of a feasible alternative to carbon-based energy. The fact is, things like solar and wind power are expensive and require a lot of infrastructure that doesn't exist right now and the law prohibits new nuclear power-- so what's the answer?

Krist points out correctly that state regulatory agencies are using California's legislated green mandate to expand their otherwise narrow authority and that will only continue to limit our energy options.

In the end, Krist is right-- the green mandate in California does conflict with the energy needs of the state. It is a paradox that neither Arnold nor anyone else is going to be able to solve any time soon.

Krist: An energy-policy paradox [Ventura County Star]

"What's In It For Me?" Works...

Sergey and Larry are proving once again that capitalism can save the world.

The Google Guys are teaming up with Intel to launch a new program called the "Climate Savers Computing Initiative," which will alter specs for personal computers to ensure that they are 90% energy efficient by 2010. The EPA’s Energy Star standard currently is 80%.

Because Google doesn’t make computers, they have had to build a coalition that includes Intel, HP, Dell, Microsoft, etc.—all the heavyweights-- not to mention the EPA and a variety of environmental groups.

By Google’s estimates, the program will cut 54 million tons of greenhouse gas emissions annually and save $5.5 billion in annual electricity costs.

Here’s the kicker (according to a Reuters report):

“Higher efficiency will raise the price of a personal computer by $20 and a server by $30, said Pat Gelsinger, senior vice president and general manager of Intel's Digital Enterprise Group, adding that more efficient systems would pay for themselves in lower energy costs.

Shipments of personal computers should rise 12.2 percent this year to 256.7 million as customers buy more laptop PCs, market researcher IDC said in a report, increasing its forecast from an earlier 11.1 percent.”

If I’m doing the math right, PC’s are going to cost $20 more, and there are going to be 256 million more PC’s shipped this year. 256 million x $20 = $5.1 billion.

$5.1 billion sounds awfully close (in the grand scheme of things) to the $5.5 billion Google claims is going to be saved in energy costs.

So basically, this initiative—if the numbers are even close to accurate—will simply transfer $5 billion from the energy companies to Google, Intel, Microsoft, and the PC makers. It’s a shrewd business move that carries the added environmental benefit of removing 54 million tons of greenhouse gas emissions from the atmosphere.

Which just goes to show, capitalism can save the world.

Q.E.D.

Google, Intel launch energy efficiency program [Reuters]

California is a Seller's Market.

The lead in today's San Francisco Chronicle article about gasoline prices speaks volumes:

"California's gasoline prices fell 17 cents during the past month to hit $3.32 per gallon, as oil companies imported fuel to make up for lagging production from the state's refineries. "

Just to get the California price down to $3.32-- which is 28 cents higher than the national average--- we had to import finished product into the state.

Yesterday I noted that the Spaniards are investing $800 million in a plan to export electricity from Mexico to California to meet the demand for green energy. You know all about the Australians' failed attempt to export LNG to meet demand in California. Now companies are refining California-grade gasoline out of state for importation into our state.

California is a captive market of our own making, ripe for exploitation. The solution to this problem is an innovative, market-based approach to upgrading energy infrastructure and a more realistic environmental mandate; it is not more government regulation. But how likely is that?

Pump prices inching down [San Francisco Chronicle]

Cashing In On California's Energy Mandate.

Spanish energy firm Union Fenosa has plans to build a $800 million generation facility in Baja Mexico for the sole purpose of exporting green power to California.

According to the company's press release, Union Fenosa plans to "capitalize on California's requirement for ''green'' energy by exploiting Mexico's 2,700 hours per year of useful sunlight.."

That's not the only thing they are looking to "exploit."

Spanish firm to sell 'clean' electricity to California [Expatica]

On an unrelated note, today the Mercury News takes up the nuclear issue which continues to gain momentum.

Nuclear-power dilemma: It's carbon-free, but comes with big questions [San Jose Mercury News]

The Future... Captain's Log Stardate 2007.

In May, Urban Re:Vision a San Francisco-based international competition created by Archiventure founder Stacey Frost, announced the winners of Re:Volt, the first of five planned jury competitions designed to “create the national prototype of sustainable urban living.”

Yup, I cut and pasted that because it was a mouthful.

Bottom line, if you want to have some fun on a Friday with “out of the box thinking” on alternative energy technologies and scenarios, check out this piece from the Flex Your Power blog.

I have to admit, I was a little thrown by the idea of using helium balloons with solar panels to “capture the kinetic energy of commuters in energy-harvesting floors,” but the rest of the stuff makes a little more sense (in a completely “out there,” impossible to implement sort of way).

This is our future in California, though. Once we have legislated ourselves into a corner, these types of things might not sound so far-fetched.

Volt Competition Winners Challenge Us to Rethink Urban Development [Felxyourpower.org]

Opposition to Nuclear Melting Down?

Cracks are beginning to emerge in the anti-nuclear power alliance. The alternative publication LA City Beat today notes that while traditional environmental groups like the Sierra Club still strongly oppose nuclear power, reluctant support for the power is coming from some unlikely places (like left-wing entertainer/comedian Bill Maher who stated on the air that safety concerns are over stated).

In California we still have the law on the books requiring a solution to the problem of spent nuclear rod storage before we can build any new nuclear plants, but its future could be in doubt.

Going Nuclear [LA City Beat]

Going Green Makes "Cents."

FTCR took a gratuitious shot at "Big Oil" even while complimenting Tesoro for its new refinery commitments, the folks at Green Wombat can't bear the fact Macy's has an economic incentive to make the move to solar:

"Of course, all this is great PR. But there's also some serious green at stake. Macy's will get all the state and federal tax breaks for the solar systems it owns as well as any potentially marketable renewable energy credits associated with the projects. The financier of the other solar arrays will retain the tax benefits and share any renewable energy credits with Macy's. SunPower and Macy's will jointly manage the energy efficiency upgrades. SunPower spokeswoman Ingrid Ekstrom told Green Wombat that SunPower is still negotiating the third-party financing. But the Wombat can't help noting that San Francisco solar banker MMA Renewable Ventures (MMA) just last week announced a new division that will finance and manage energy efficiency projects much the way it finances solar arrays for corporate clients."

Why is this a bad thing? The best way to get private industry to embrace alternative energy technologies is to give them an economic incentive to do so.

But clearly there are those in the environmental community who would rather see the move made by legislative fiat, and that is a recipe for futility.

If California has any shot at all at meeting its ambitious green energy goal, the first question that has to be asked and answered for and by industry is "What's in it for for me?"

Macy's Solar Shopping Spree [Green Wombat]

Dissension in the ranks!

Some environmental advocates are up in arms over proposed federal energy legislation (being advanced by the Democratic Congress, which was supposed to be enviro-friendly) which would actually hinder the efforts of states to go green.

The Daily Green has the story.

Energy Plan Would Derail States [Daily Green]

Tesoro Stepping Up In California Gasoline Market

Tesoro ponied up $1.75 billion for Shell’s Wilmington refinery and various other Southern California assets, and it has plans to spend another $1 billion on upgrades to the facility over the next five years.

The company has also said that the facility will no longer produce gasoline for Nevada and Arizona, rather it will focus exclusively on making the special California blend of gasoline that is required by state environmental laws.

This should all add up to increased supply at a time when it is badly needed.

Even the activist community which makes a living bashing the “oil industry” was hard pressed to find something to criticize about this move.

The Foundation for Taxpayer and Consumer Rights, which nodded its approval in a comment made to the Los Angeles Times, was clearly uncomfortable with saying anything complimentary about any company even remotely connected to the manufacture or distribution of petroleum products, still managed to take a shot at the industry:

"We need more gas on the market," said Jamie Court, president of the Foundation for Taxpayer and Consumer Rights, whose Santa Monica-based group is a frequent critic of the oil industry. "Putting refineries into the hands of a Tesoro or a Flying J is a good thing, because they are much more likely to expand refining than the majors."

High praise indeed…

Tesoro to pump funds into refinery [Los Angeles Times]

When in doubt, hold a conference...

If you happen to be in San Francisco on June 18, this should be fun...

The California Clean Energy Fund will hold an all day conference to "assess California's progress in turning clean energy policy initiatives and technology breakthroughs into market realities."

According to conference organizers, sessions will focus on "detailing specific ways in which public policy and the private market are both working and struggling to bring clean technologies to scale." [Emphasis on the word "struggling".]

Michael Peevey, who is a CalCEF Board Member, commented in the official press release that it is important to take "a hard look at the tough road still ahead and engaging in a frank discussion that tackles the challenges we face."

Yup.

Conference materials describe the program thusly:

The full-day event, sponsored in part by PG&E, Nth Power, VantagePoint Venture Partners, DFJ Element, Nixon Peabody LLC and New Resource Bank, and managed by Global Inventures, includes a rich program comprising panels and keynotes examining:

-- The role of high-tech entrepreneurs in building the market for clean
energy
-- Whether existing policy efforts and the surge in private financing have
the clean energy industry positioned for success
-- Challenges and successes from the investor's perspective
-- What it takes to drive clean energy innovations in California
-- Energy efficiency and innovation in transportation technologies
-- How entrepreneurs can partner with regulated corporate entities to
advance clean energy innovation
-- Major challenges California faces in terms of policy and business
climate
-- Economic and employment-related benefits of the clean energy transition

CalCEF to Host Its First Annual Conference Detailing California's Transformation as a Driver of Clean Energy Initiatives [Offical Press Release]