PG&E's Pesky Eminent Domain Problem

Sucks to be PG&E these days! We told you about the South San Joaquin Irrigation's District's move to get into the power business by tossing out PG&E, now the same thing is happening in Stockton.

Yesterday, in his State of the City addrss, Mayor Ed Chavez reiterated his intention to push the City Council to bounce PG&E in accordance with a provision in the City's deal with the utility that goes back to 1954.

We're not Eminent Domain lawyers, but this looks like it might be more straightforward than a traidtional eminent domain action, because, according to the Record, the City has a letter from PG&E dated 1954, that says point blank:

"The right is reserved to the city to go into the public utility business or to purchase the public utility facilities of the company within the city at a reasonable price at any time the city shall see fit."

PG&E spokesperson Nicole Tam isn't impressed... she says PG&E is not a "willing seller" and implies that the company will litigate the matter until the cows come home.

Stockton is making the same arguments as SSJID: rates will come down and revenues will increase if the City takes over.

Mayor's address roils PG& E [recordnet.com]

Sempra's Other New Transmission Line

Yesterday we noted that opponents of Sunrise Powerlink were calling BS when Sempra stated publicly that it had no intention of hooking the 500kv transmission line into Mexico.

I guess Sempra was telling the truth because today we find out that the company has filed for permit to build an enitely separate transmission line into Mexico.

This one would hook into the Southwest Powerlink, which runs along I-8 and it would connect to a wind farm.

Sempra eyes cross-border power line [San Diego Union Tribune]

Sempra Reports BIg $; SSJID Moving Ahead?

Sempra turned in strong 4th quarter numbers, subtantially surpassing analysts' earnings projections. Q4 net income more than doubled as profit jumped to $289 million, or $1.10 a share, from $125 million, or 47 cents, a year earlier. Wall Street had been predicting closer to $1.04 EPS.

The company pushed back the go-live date of its LNG plant in Ensenada and announced plans to buy back as much as $2 billion in stock after it completes the sale of its trading business.

In other news, the Manteca Bulletin reports that the eminent domain fight between the South San Joaquin Irrigation District and PG&E was slated to lucrch forward yesterday when the SSJID was to meet in closed session to move the process along. No news yet on what the outcome was, but SSJID appears to be sticking to its guns, motivated by what is reported to be a projected 15% across the board rate cut if the District takes over.

In the same dispatch, the paper notes that "the largest solar farm of its type in the West" is about to go online. The array will produce one MW a day to power a nearby water treatment plant and cut out a half-million-dollar annual bill to PG&E.

Sempra reports strong 4th-quarter earnings [Los Angeles Times]

Water powers SSJID's future [Manteca Bulletin]

Trees Up North, Power Lines Down South

A little over a year ago we poked fun at PG&E's "ClimateSmart" program that gave customers the option of voluntarily taxing themselves to raise money for new trees that would soak up greenhouse gas emissions.

Well the results are in--17,500 climate conscious folks participated and now $2 million worth of trees are going to be planted in Santa Cruz County and on the North Coast. Estimates are that the new trees will remove 214,000 metric tons of greehouse gasses-- the equivalent of taking 40,000 cars off the road for a year.

Elsewhere, yesterday was the first PUC hearing on the Sunrise Powerlink. The battle lines have been drawn with proponents talking up the need to support renewabel energy projects near the Salton Sea and detractors calling B.S. due to expected habitat destruction and a more than small change that SDG&E might try to pull and bait and switch and hook the transmission line up to Mexican fossile fuel plants.

According to the Union Trib:

"The utility's preferred route calls for erecting 246 towers from El Centro through the Anza Borrego Desert, with an overall permanent habitat loss of almost 500 acres. The planned route would require redesignating 50 acres of state wilderness areas, and the study said it would harm a variety of animals, rare birds, reptiles and insects such as the endangered Quino checkerspot butterfly.

Opponents also questioned whether SDG&E really intends to connect the Sunrise Powerlink to renewable energy plants, or if the line would be used to link to natural gas power plants in Mexico."

The PUC could decide the issue this summer.

PG&E to fund forest projects [San Francisco Chronicle]

Powerlink fans, foes face off [San Diego Union Tribune]

Geothermal Raises Questions Too

Last week the San Jose Mercury News ran a story about geothermal energy that is really a pretty good primer on the issue. Other than Calpine's big investment in geothermal, you don't hear much about the energy medium, relative to other alternative sources like solar and wind power.

As California continues its frenetic race to renewables, the shortcomings of green energy seem to be highlighted every day: Borenstein's recent report that called Solar an economic loser; oppostiion to wind turbines due to bird strikes; and the myriad difficulties associated with a pilot project seeking to generate wave energy off the California coast are all examples of the problems associated with alternative energy.

But geothermal seems to be the one form of energy that doesn't get a lot of ink.

It's inherently understood that there are geographic limitations to geothermal that makes its widespread use somewhat impractical (unless you live in Iceland), but was striking about the write-up in the Merc is the environmental impact of geothermal and the capital requirements to harness it.

In the Merc, the owner of a geothermal outfit boils geothermal (excuse the pun) down to "mining" and he notes that drill bits with 40 hour lifespans can cost as much as $50,000 each. There is nothing environmentally friendly about mining and at drilling at $1,250 an hour (just for the equipment), it certainly doesn't sound cheap.

Add one more form of alternative energy to the list of good and effective sources energy that could be their own worst enemy.

With strong opposition in California to nearly every form of available energy (coal pollutes, nuclear melts down, LNG blows up, solar is expensive, wind and geothermal are also expensive and impact the environment), there are still no good answers to the massive question of how to solve California's energy problems.

Someting to ponder over the weekend...

Geothermal energy gaining steam, but its future is up for debate [San Jose Mercury News]

Berkeley Prof Calls Solar Power A Loser

It's hardly a secret, but the overall picture for solar energy is a little... cloudy.

The director of the UC Berkeley Energy Insitute, Professor Severin Borenstein is out with a 38 page paper that basically says what the solar power industry and a lot of politicians don't want you to know: solar is expensive-- it can't compete at this point with fossile fuels and it costs more than other renewables.

He tells the San Jose Mercury News that peopel are "throwing away money" by installing solar.

Predicatbly, the solar industry flacks are in an uproar, calling the report "deeply flawed" and a "publcity stunt".

The Merc notes:

"Under the most likely scenario, the cost of a 10-kilowatt solar system would be three or four times as much as the electricity it'll produce, Borenstein found. And even using a more favorable set of criteria, the cost would still be as much as 80 percent more than the value of the electricity it will produce."

Solar panels a 'loser,' prof says [San Jose Mercury News]

Around the Horn On A Wednesday Morn...

Lot's going on...

PUC Commissioner Timothy Simon goes before the Senate Rules Committee today for his confirmation hearing. You can imagine how thrilled he was to read a page 1 story in the LA Times this morning about how he allegedly shook down companies he regulates to fund a green energy conference hosted by the Willie L. Brown Institute on Politics and Public Service (which is, of course, headed up by Simon's political patron, Willie Brown).

According to the Times, this is not technically illegal, but PG&E, SoCalEd, and SDG&E all ponied up $50,000 to be platinum sponsors and, "About the same time Simon was raising money from the utilities, Pacific Gas & Electric Co., Southern California Edison and San Diego Gas & Electric Co. were petitioning the PUC to increase bonuses in an energy-efficiency program the commission had established a few months earlier." (They got the change they were looking for.")

PUC member's donation request raises questions [Los Angeles Times]

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Down in Los Angeles, Mayor Antonio Villaraigosa announced his new "Solar Jobs Initiative" under which the DWP will fork over $270 million to install solar panels on city-owned commercial buildings and to bring the buildings up to green building standards. They Mayor claims this will create as many as 400 jobs over the next 3 years. Villaraigosa calls these new jobs "green collar" jobs... catchy.

Mayor: LADWP Plan Will Create 'Green-Collar' Workforce [KNBC.com]

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Also at the LA DWP, the much-lampooned lactation program is going forward after 60 protesters attacked commission President Nick Patsaouras for being "anti-women." The Los Angeles Daily News reports that Patsaouras demonstrated stuck to his guns: "It's absurd," Patsaouras was quoted as saying last week. "At a time when we're asking ratepayers to increase the rates, we're going for lactation."

The DWP's H. David Nahai,has final say over the $37,000 program (it was originally reported to cost $50,000) ahd he's giving it the thumbs up.

DWP board chief called 'anti-women' by protesters [Los Angeles Daily News]

Supreme Court To Deny Utilities?

No verdict is expected until July, but from the way things went for utilities today in Supreme Court hearing regarding the long-term conracts signed during the California Energy Crisis, it looks like the contracts are going to stand.

CNN has the story.

Supreme Court Likely To Uphold Energy Crisis Power Contracts [CNN]

Fiscal Responsibility at LA DWP

Just a week after hiking water and power rates, the Los Angeles DWP has circulated a 56 page request for proposal for an in-house "lactation consultant". The contract is valued at around $50,000.

"The winning contractor also would be paid to show employees how to use the department's "breast pump program in traditional and nontraditional work environments." Neither the Port of Los Angeles nor Los Angeles World Airports -- two other city agencies with their own budgets -- have hired lactation specialists. But DWP officials say they have awarded such contracts since 1988 and argue that the service has improved employee morale and reduced absenteeism among new mothers."

DWP bid to hire lactation specialist draws howls [Los Angeles Times]

A FISH Tale

A new stakeholder coalition has popped up to wegh in on PG&E's proposed wave energy project off the Mendocino coast as it wends its way through the policymaking process. The fishing industry has formally put together a coalition in order to achieve legal status as a major stakeholder in the ongoing project deliberations.

The key to an effective lobbying coalition, as everyone knows, is a catchy name. Ladies and gentlemen, I give you: FISH! (Fisherman Interested in Safe Hydrokinetics).

FISH has officially filed to intervene in PG&E's permit application process which means the already ambitious project could soon be mired in bureacratic quicksand.

The FISH membership roster is a who's who of maritime resource extraction: the Salmon Trollers Marketing Association, Recreational Fishing Alliance, North Coast Fishing Association, California Sea Urchin Harvesters Commission, Caito's Fisheries, nutritional kelp harvesters, Sonoma County Abalone Network and the Fishermen’s Marketing Association.

Fort Bragg Fishermen Form Committee on Wave Energy [indybay.org]

Gas Prices In Free Fall!

Due to declining crude prices and changing consumer habits (read: "buying less gas"), AAA reported that gas prices in California fell $.20 last month, to an average price of $3.12 per gallon.

But before you get too excited, the San Fracnisco Chronicle notes:

"Gasoline prices tend to climb in the spring, as more Americans take to the road for weekend trips. Also, the amount of gasoline in storage probably will fall as refineries rev down for annual maintenance work, a process already starting in California.

Refineries also are throttling back gasoline production in an effort to increase prices. Last fall's soaring crude oil costs slashed the refineries' profit margins; Chevron Corp. lost $55 million on its U.S. refineries in the fourth quarter of 2007. "

To put a number on this grim picture, the Energy Information Administration is projecting $3.55 per gallon in the second quarter.

State's gas prices drop 20 cents in month [San Francisco Chronicle]

Free Agent Signing, Rate Increases Up The Ante In Utility Fight

30 year PG&E vet Don Battles has gone over the wall and joined forces with rival South San Joaquin Irrigation District in its fight against PG&E to acquire assets through eminent domain and become a utility player itself.

Battles will serve as systems director for the district where he will be in charge of developing the actual plan to deliver services to customers in SSJID service area.

According to the Modesto Bee:

"The plan is hotly contested by PG&E. It depends on eminent domain to force PG&E to sell power poles, substations and transformers to SSJID. Until 2005, PG&E had an exclusive contract to buy electricity that runs through those lines and systems from the Tri-Dam Project, a series of electricity-producing dams along the Stanislaus River jointly owned by the SSJID and the Oakdale Irrigation District. But PG&E's 50-year contract expired Dec. 31, 2004, and the SSJID wants to use its share of future power to provide electricity to local customers. The issue is before the Third District Court of Appeal in Sacramento."

The fight promises to get even uglier if PG&E is successful in ramming through proposed rate increases in the area that will average about 6% for homes and businesses.

SJ utility gets power aid [Modesto Bee]

California's Oil Import Problem

Writing in thestreet.com today, Chuck Marvin takes a look at urgent need to upgrade our crude oil import capacity in California and the pushback that industry is getting from environmenatlists and NIMBY's. While this is hardly "news" in California, in fairness, Marvin has a larger audience...

According to Marvin, the battle lines are drawn at the ports where our liquid storage facility capabilites are falling way behind demand for imported crude. Do to refinery creep, falling in-state production, and higher demand, the need for more crude is growing, but that need is being blunted by local control at the port level:

"The crux of the debate rests on the issue of who gets to decide what items enter and leave major ports. While ports are typically municipal bodies with power ceded to them by cities, the decisions that port authorities make do not only affect local concerns. Rather, their decisions trickle through to a broad base of stakeholders, many of whom are not given the right to elect or choose those who make the original decisions."

Substantiating the growing demand argument, he cites a CEC report from September:

"A CEC report published last September concluded that the supply and demand for oil and refined products in California are expected to increase dramatically in the coming years. Crude imports are estimated to rise as much as 34%, or 138 million barrels per year, from 2005 levels by 2015. Imports of petroleum products like jet fuel are expected to grow by 116 million barrels a year by 2015."

California Oil Imports Debate Heats Up [The Street.com]

Biofuels More Harm Than Good?

According to a new study in the journal Science, crop production for biofuels is actually increasing greenhouse gas emissions which, of course completely defeats the purpose of biofuels.

Clearing productive agricultural land which involves turning over dirt, burning or rotting plant material, releases so much carbon into the atmosphere, that in some cases, the land would have to be farmed for hundreds of years before a net benefit from the use of the biofuel end-product could be realized.

Some specific examples cited by the Los Angeles Times:

• "The analysis calculated that a U.S. cornfield devoted to producing ethanol would have to be farmed for 167 years before it would begin to achieve a net reduction in emissions."


• "The study found that clearing an Indonesian peatland rain forest to make way for a biofuel plantation -- a conversion that is occurring rapidly to satisfy Europe's rising demand for biodiesel -- releases so much carbon that a net reduction in emissions would not begin for 423 years."


• "Cutting down a tropical rain forest in Brazil to grow soybeans for biodiesel increases emissions for 319 years, the researchers found."

The rush to biofuels is most apparent here in the United States in increased ethanol producion. Since 2000, annual ethanol production has increased by almost 5 billion gallons.

Biofuel crops increase carbon emissions [Los Angeles Times]

A "Leaner, Greener" Calpine

One week out of bankruptcy, Calpine boss Robert May is giving himself what may turn out to be a well-deserved pat on the back.

May took the reins in late 2005 when the company was saddled with $18 billion in debt and was preparing to file bankruptcy. Now, a little more than two years later, the company has shuttered 19 offices and 12 power plants. It operates 80 plants all of which are either gas-fired or geothermal, and thus in sync with California's demand for cleaner energy.

According to the San Jose Mercury News:

"The "old" Calpine ran into trouble because of an aggressive expansion strategy. With about 6,000 megawatts of generating capacity in 2001, the company said it would expand to 70,000 megawatts by 2005, making it the nation's biggest power company."

Critics say the California energy market has not changed sufficiently for a company like Calpine to prosper, but May believes he's offering the right product at the right time.

Reborn Calpine in 'really good position,' CEO says [San Jose Mercury News]

Wyoming Delegation to LA to Talk Coal

Wyoming Governor Dave Freudenthal and top advisors took a field trip to Los Angeles Friday to meet with Mike Peevey, SoCalEd's Al Fohrer, and SDGE's Debra Reed. The topic? Coal.

Wyoming's got lots of it and California needs electricity so the two sides did their best to see if they could make a deal. Environmental considerations will define any arrangement, however, as the Wyoming delegation was told flat out that any electricty produced from coal in Wyoming and used in California has to meet California CO2 standards.

That prompted this rather unique comment from Wyoming Senate President John Schiffer: "If my buyers say they want black-hided cattle, what I do is I go buy black Angus bulls and they'll buy it." Right...

Gov. Freudenthal's top energy advisor then compared the trip to L.A. to a visit to another country. He's probably right.

Culture shock, aside, Wyoming appears to be serious about selling energy. The delegation brought along draft legislation that would provide for the undergroun storage of CO2 produced by coal-fired plants.

Wyo leaders pitch coal power to California [Casper Star Tribune]

Biofuel Taking Flight

Later this month, a Virgin Atlantic 747 will fly from Heahtrow to Amsterdam on the first flight of a commercial airliner using biofuel.

The plane will carry fueld that is 80% jet fuels/20% biofuel, and will be powered by GE CF6 aircraft engines that reportedly require no retrofitting to accomodate the new recipe.

According to the San Francisco Chronicle, the impact of aircraft on overall greenhouse gas emissions is significant:

"...greenhouse gas emissions from domestic aircraft are expected to increase 60 percent by 2025. The Intergovernmental Panel on Climate Change estimates that increases in air transportation over the next 50 years will result in a threefold increase in aircraft CO{-2} emissions and a 13 percent increase in ozone."

Virgin Atlantic's parent company, the Virgin Group, has pledged to invest all profits from its transportation operations into the development of clean energy.

Virgin jet to use biofuel blend in test flight [San Francisco Chronicle]

The Candidates and the California Emissions Waiver

The economy and the war may be the high-profile issues thought to be driving the election, but all politics is local, so it's worth taking one last look at where the candidates stand on one of the bigger issues facing California.

The Sacramento Bee has a summary of the stated candidate positions on the California Emissions Waiver controversy.

Not surprisingly, the Republicans are wrapping themselves in mantle of "states rights" while the Democrats are getting behind a cap and trade system.

Read the entire summary here.

PUC Lightens Up On Utilities

With Super Bowl Sunday only 48 hours away, a football metaphor seems appropriate: in life as in football, there are make-up calls!

Yesterday we talked about SoCalEd throwing itself on the mercy of the PUC in its appeal of a fine for cooking the books. Today, we're taking about some serious love being shown the utilities in the form of favorable reforms to the energy-efficiency risk-reward program that the PUC adopted four months ago.

According to Elizabeth Douglas's write-up in the LA Times, orginally the program, "utilities that achieved 65% of energy- efficiency goals collectively would have been penalized $142 million. Incentives would accrue after the companies reached 85% of the goals."

Now the playing field has shifted considerably in utilities favor, allowing utilities "to earn about $89 million in customer-funded incentives for achieving as little as 65% of the power savings goals laid out for them."

Peevey loves the decision because nothing motivates utilities like money, but Tom Roberts from the Divison of Ratepayer Advocats sees it as a give-away:"We had a big problem with a reward at the 85% level," he said. "Now [the utilities] would be rewarded for what we could call mediocre or D-plus performance, and that doesn't seem consistent with the goal of trying to reach 100% of goals."

PUC eases rules of energy-efficiency program [Los Angeles Times]