SFO Snags Tesla

San Francisco won the Tesla lottery and will be home base for what promises to be the world's most politically correct fashion accessory-- the $100,000 Tesla electric roadster.

Northern California beat out New Mexico which had offered a sweet deal (presumanly akin to the one that landed Eclipse Aviation for the Land of Enchantment).

Included in the write-up is this little tidbit: one of the earliest of early adopters: Arnold Schwarzenegger who is ready to trade his hummer for a Tesla.

Tesla to build new electric sedan in Bay Area [San Francisco Chronicle]

SCOTUS Takes a Pass on Energy Contracts

U.S. Supreme Court Justice Antonin Scalia had a busy day yesterday... not only did he author the Court's landmark opinion overtnring the Washington, D.C. gun ban, he also wrote the decision to duck issue of re-opening long-term power contracts entered into during the 2001 Electricity Crisis. The case was sent back to the Federal Energy Regulatory Commission, with instructions to determine if the public interest was harmed by energy supply contracts signed in 2001.

According to the San Diego Union Tribune:

"In writing for the court, Scalia rejected arguments that FERC should have considered whether the supply contracts were “just and reasonable.” FERC declined in 2002 to intervene in the dispute and upheld dozens of contracts signed in California and elsewhere.

The 9th U.S. Circuit Court of Appeals disagreed and instructed FERC to reform the contracts. Scalia rejected that ruling, which said the contracts fell outside a “zone of reasonableness.”

The Supreme Court's 5-2 ruling instead told FERC to do a more thorough job of considering if the power suppliers were manipulating energy markets and to look at the long-term effect of the contracts on consumers. "

Sempra is reported to be "pleased" with the decision.

High court deflects reopening of power contracts [San Diego Union Tribune]

With California Ballot Props, Nothing Is Ever As It Seems

Capitol Weekly peels back the layers on two initatives headed for the ballot this November.

While neither is numbered yet, one would authorize the issuance of $5 billion in bonds to "develop and encourage the use of clean alternative fuels and renewable energy, with half the money going to new or repowered clean vehicles."

The other "would require all utilities--whether municipal or private--to get at least half of their electricity from clean- and solar-power sources by 2025."

As written and presented, both appear to be fairly straightforward, environmentally friendly measures. But ballot intiatives almost invariably are legislative feints by special interests and these two props don't deviate from that standard.

Capitol Weekly reports that the first intitiative is being bankrolled by Clean Energy Fuels, a company associated with GOP stalwart and gazillionaire oilman T. Boone Pickens. Clean Energy Fuels is the largest purveyor of clean-vehicle natural gas in the nation, and the $1.5 million it has pumped into the measure so far is but a drop in the bucket of what it likely would reap were the measure to pass.

The second measure is being opposed by all of the major California utilities because they believe it overreaches and sets an unachievable timetable. Capitol Weekly reveals that the driving force behind the initiative is the power house law furm, Manatt Phelps. Manatt's reputation as supremely successful hired gun for special interests, raises red flags, but this measure may be more transparent than the clean-vehicle-bond intiative. Most of the funding for this campaign has come from Santa Barbara environmental activsit Peter Sperling who has a history of supporting environmental causes.

Stage set for November ballot duels over clean-energy plans [Capitol Weekly]

The Never-Ending Utility Bill meets the No-Win Situation

The Manteca Bulletin has become required reading lately and once again, it doesn't disappoint!

In April we posted about how, in order to recoup costs, PG&E was going to continue billing former customers in Hercules even after they ditched the utility. Well the chickens are coming home to roost in simlar fashion in Ripon!

Kind of like voting in Chicago, where people have been known to cast ballots even after they are dead, the practice of billing customers after they have opted out (or in some cases, billing consumers who were never customers at all) has not been well received. Calling the practice "legalized theft," the locals are restless, to say the least.

What's really interesting in the Bulletin, however, is Managing Editor Dennis Wyatt's analysis of the conundrum that utilies found themselves in over the erstwhile ballot initiative known as Prop 98.

Prop 98 went down in flames last month, while the other eminent domain measure on the ballot, Prop 99 was approved by voters.

According to Wyatt, had 98 passed, PG&E and others would have had a powerful new piece of legislation with which to crush various municipalities, districts, etc. that are trying to take over and run their own power systems. But it also would have seriously curtailied utilities' abilities to aquire via eminent domain easements and parcels for thigns like power lines and dams:

"PG&E and other quasi-public electrical utilities in California facing attempts by local jurisdictions to take away part of their service electricity via eminent domain to reduce energy costs for their constituents were neutral on Prop. 98 even though it could have been a big help in blocking such moves. The reason can be found in the powers vested by the California Legislature over the years into quasi-public agencies such as PG&E. They essentially have been granted eminent domain powers to put in place everything from dams and power plants to power and natural gas lines. Passage of Prop. 98 would have severely curtailed PG&E's ability to act like the government and take land for its power needs."

Ripon homeowner: accuses PG&E of 'legalized theft' [Manteca Bulletin]

Prop. 98's failure keeps door open for SSJID forcing PG&E system sale [Manteca Bulletin]

Gas Price Flashback!

Time to jump into the Wayback machine for a truly grim exercise in hindsight:

On February 13, we posted about falling gas prices in California. At the time, the average price per gallon in California was $3.12.

We noted with trepidation, that the EIA was predicting prices of $3.55 in the second quarter. Well, here we are, roughly 4.5 months later, just 5 days from the close of Q2... how'd we do?

The average price of gasoline in California is currently $4.60 (and that is down in recent days).

Ouch.

[The only good news here is that we finally found a way to work a Rocky & Bullwinkle reference into an energy post!]

Opening the Floodgates-- SSJID (Part 2!)

The South San Joaquin Irrigation District might be too flush with cash...

We posted yesterday about how the SSJID coffers were full and that how that might impact the takeover fight with PG&E, but it appears like there might be too much cash on the books.

To protect that from being raided by the State, the District is embarking on new solar, and hydroelectric projects under the theory that it is better to put the money into energy producing assets than to become a slush fund for cash-starved California.

Another thing the District has more of than it needs is water. According to the Manteca Bulletin, the District might begin selling excess water to other parts of the thirsty state.

With all that money and water, it's hard to believe the SSJID is actually part of California!

Cash Is King In SSJID-PG&E Fight

As the South San Joaquin Irrigation District prepares to head back for another round of hearings before the Local Agency Formation Commission in its fight to take over the PG&E distribution system, it has a new secret weapon: deep pockets.

Experts peg the purchase price for the PG&E assets around $80 million. Through a combination of $10 million in annual royalty payments from the Tri-Dam system and a new round of municipal bond revenues to be applied to recent capital improvements made by the District, the SSJID should have more than enough to pay cash on the barrel head.

Using the Tri-Dam bond offering as an example of how smooth this kind of financing can be, and because the cost of capital associated with a bond offering is far less than it would be if the District were to borrow the money in the traditional sense, the SSJID can likely avoid any popular backlash against new public debt. None of this is good news for PG&E which strongly oppposes the takeover.

Power pay: SSJID may buy PG&E with 100% cash [Manteca Bulleting via the Local Clean Energy Alliance]

Richmond Flip-Flops on Crude Cap for Chevron

A couple of weeks ago the Richmond Planning Commission certified Chevron's EIR on its proposed refinery expansion, but also slapped a "Comprehensive Crude Cap" on the facility, designed to significantly limit the amount of heavy crude that it could process.

The environmental community which is strongly opposed to the expansion, hailed the move as an important battle won within the larger war against the refinery.

Who knew the Richmond Planning Commission had instant replay?



Yesterday, the Commission reversed its decision after a City consultant testified that the restriction was not necessary because curbs on heavy crude were already in place. Commissioner Charles Duncan was the lone dissenter.

Communities for a Better Environment has already promised to appeal the reversal at the City Council levle. The City Council is expected to take up the refinery expansion issue later this summer.

Ruling Reversed for Chevron [San Francisco Chronicle]

Not All Energy Problems Are Created Equal

In the mobster movie "The Untouchables," Sean Connery playing the wise old Irish beat cop tells Kevin Costner's Elliot Ness (I'm paraphrasing), "Everyone knows where the liquor is, but no one is willing to cross Capone and go get it." The same goes for our gas price woes. The solution is plain, but we simply can't or won't bring ourselves to execute it.

We need more oil and more refining capacity, but neither is happening any time soon. Depending on where you stand, this is a case of admirable restraint or wasted opportunity, but the ramifications of our decision to uphold the moratorium are clear: lots of complaining and hand wrininging, and $5 a gallon gas.

SDG&E put out a release today announcing its intention to build a 46MW, gas-fired peaking plant near San Diego. If all goes according to plan, it will be online in 2009 and will only be used to meet increased demand during peak consumption periods.

The release notes that the building new gas-fired plants is still very much part of California's overall energy plan, after conservation and development of new alternative energy resources.

Ironically, this story is moving on the same day we are treated to a host of stories about how everyone from the environemental community to Gov. Schwarzenegger is balking at the White House's call for increased offshore drilling.

SDG&E is moving to increase capacity to meet consumer demand and this will more than likely sail through the bureacratic morrass unchallenged because it makes fundatmental sense; the same logic does not apply for oil (and ultimately gasoline).

Just as SDG&E noted in its press release, the answer to our oil (gasoline) woes is rooted in the same three part strategy: conservation, development of new alternatives (technology), and increasing capacity.

Wer'e clearly not doing enough in the conservation department and we're making limited strides in the development of commercially viable alternative vehicle technology, but apparently we are dead set against increasing capacity.

Despite the fact that we know where the oil is and how to get it, and desptite the fact that resource extraction technology is light years ahead of what it was a generation ago, everyone except George W. Bush and John McCain is saying no to drilling in ANWR and to offshore drilling.

Clearly, in environmental impact terms, a gas-fired power plant that will only be put to limited use is not even in the same league as offshore drilling but the academic point is obvious-- we need more capacity and (rightly or wrongly) we are not willing to produce it for oil, so we have to live with the consequences and change our habits.

News reports already document the fundamental shift in consumer behavior now that gas prices are knocking on $5 a gallon-- the freeways are less crowded, but the trains are packed. The people have spoken...

Plans for Medical Waste to Energy Plant Scuttled

Apparently California's taste for alternative energy has its limits. While innovative new technologies that turn things like restaurant grease into energy have been embraced, it would appear that the line has been drawn at medical waste.

Inentec, LLC was to have built a $13 million plant outside of Red Bluff that would have done just that: turn (hazardous?) medical waste into energy through plasma gasification technology. The Sacramento Bee reports that the project has been spiked:

"Opposition to the Inentec project formed in 2005 after Tehama County granted the company a land-use permit and a declaration of "no significant environmental impact." Local air pollution regulators deemed the proposed plant safe, based on company-supplied emissions data from test runs of its prototypes.

Many Red Bluff area residents were outraged to learn that something as potentially hazardous as hospital waste – 10 to 20 tons of diseased organs, tissues and limbs and other infectious throwaways trucked in daily – had escaped their attention."

Energy firm drops plan for power plant near Red Bluff [Sacramento Bee]

Not Your Father's Prius.

What's more sought after in Hollywood than an Oscar®? A hybrid hydrogen-electric, zero-emission car! AP is reporting that Honda is set to introduce the FCX Clarity to Southern California in the next couple of weeks.

A-listers Jamie Lee Curtis and her husband Christopher Guest are reportedly at the front of the line (no word on how they beat out the likes of Ed Begley, Jr. and Laurie David).

According to the AP write-up:

"The FCX Clarity, which runs on hydrogen and electricity, emits only water and none of the noxious fumes believed to induce global warming. It is also two times more energy efficient than a gas-electric hybrid and three times that of a standard gasoline-powered car, the company says.

Honda expects to lease a few dozen cars this year and 200 within three years. In California, a three-year lease will run $600 a month, which includes maintenance and collision coverage."

Honda rolls out its new zero-emission car [Associated Press]

The Raw Truth About Gas Prices

Writing in the Oakland Tribune, Matt Nauman, breaks down the impact that domestic oil consumption is having on gas prices in particular, and the over economy, in general.

In the article, Severin Borenstein notes the following:

The U.S. accounts for 25% of global oil demand-- three times as much as China-- but, China is catching up to the U.S. and is projected to account for 14% of global demand by 2030. This increased demand is what is driving up costs and it shows no signs of letting up.

Most revealing however is toll that expensive oil is taking on the economy. Stanford's Jim Sweeney lays it out:

"An economics rule of thumb says that every $10 increase in the price of oil takes away about one-third of 1 percent of the U.S. gross domestic product. That means, he said, that $90 increase has stripped 3 percent from the U.S. economy. Put another way: That $400 billion hit to the U.S. economy is about three times what was spent on the war in Iraq in 2007..."

All of this of course, focuses only on oil as a raw material and doesn't even begin to factor in the cost of refining oil into gasoline in California.

Why gas costs more, more, more [Oakland Tribune]

Renewable Energy, 24-7 in Fresno.

Martifer Renewables' solar farm in Fresno County is expanding its capabilities to include more than power generated by solar. David Baker from the San Francisco Chronicle sums it up nicely:

"The plant, near the old oil-patch town of Coalinga in Fresno County, will combine a large solar farm with a generator that burns orchard trimmings, agricultural waste and, yes, excrement."

The idea is to run the plant around the clock-- something you can't always do with wind power and something that is impossible with solar.

A deal with PG&E is expected to be announced today.

The plant ultimately will produce 107MW and encompass 640 acres.

Coalinga solar plant would also burn manure [San Francisco Chronicle]

Home Grown Power?

Here's a bill the utilities are going to hate: AB 2112.

Assembly Member Lori Saldana (D-San Diego) has put forth the bill which requires all new homes built in California to be completely energy self-sufficient, through the use of solar panels, wind power or some other form of renewable energy. The requirement would take effect in 12 years.

Given that this legislation would essentially make individual homes self-contained generating facilities and that it would basically spell the beginning of the end for the grid and for utilities in general, you can bet there will be strong opposition.

According to a report in the North County Times: "The bill is supported by environmental groups. It is opposed by the building industry, business groups, contractors, engineers and manufacturers, and local Republican lawmakers."

Next up for the bill is a June 17 hearing in the Senate Transportation and Housing Committee.

Legislating home-grown electricity [North County Times]

Joining Forces

This Thursday, California Gov. Arnold Schwarzenegger will be in Berkelely to sign an historic alternative energy agreement with the President-- the President of Chile, that is.

President Michelle Bachelet and Governor Arnold Schwarzenegger will sign a new agreement in Sacramento on June 12, "Chile California: A Partnership for the 21st Century." The agreement is meant to promote cooperation on innovation, higher education, and alternative energy. In President Bachelet's public address at UC Berkeley, she will discuss the current challenges Chile faces and what this new agreement means for her country.

According to Treehugger.com:

"Bachelet's official visit to Canada and the United States seeks to deepen the technological and energetic cooperation between her country and North America. After having met Canada's prime minister Stephen Harper, she's arriving in California to meet Schwarzenegger and to offer a conference at the Berkeley UC.

Alternative energy is a key issue for Chile, a country that imports three quarters of its power and that's facing energy shortage in its Northern area. According to the release, Chile is considering the installation of solar power plants in the Atacama desert, hence the interest in California."

Trash To Energy Plant, Trashed

Santa Cruz's plans to build an innovative "trash to electricity" plant at the Buena Vista landfill that will obviate the need for another local landfill. Ironically, the plan is being met with intesnse skepticism from the environmental community which questions the claims being made by Adaptive/ARC, the company peddling the technology.

The facility would rely on plasma arc gasification technology to convert trash to electricity. As described in an article in the San Jose Mercury News, the technology works like this:

"Plasma-arc gasification, say its advocates, is not to be confused with traditional incineration and essentially vaporizes trash without harmful emissions.

The process applies heat in the form of electrified gas, or plasma, to waste, turning the organic materials into a synthetic fuel for electricity and the inorganic materials, such as metal, into an ash or slag residue that can be used in asphalt and concrete."

The environmental group Greenaction for Health and Environmental Justice is calling the company's claimes embellised and suggests that there might be more harmful emissions involved in the process than the company lets on.

Trash to energy technology is unproven in this country but is being used successfully in Europe and other places.

SoCal firm seeks permits for trash-to-energy plant in Santa Cruz County [Mercury News]

Peevey's Think Tank Irks Lawmakers

A proposed climate change think tank to funded by a ratepayer surcharge is drawing fire from legislators in Sacramento. Considered a pet project of PUC boss Michael Peevey, the Commission voted unanimously in April to establish the institute at the University of California.

Lawmakers see the move as going way beyond the PUC's mandate and consider it a fundamental challenge to their authority. Citing legal analysis that such a move by the PUC would be illegal and that it requires a bill passed by the legislature, elected officials are digging in.

The turf battel shows signs of dragging on as lawyers for both sideas are now involved.

PUC-approved institute at UC kindles suspicions [Capitol Weekly]

Edison Makes Another Big Solar Commitment

Edison, which already claims to purchase 90% of the solar power produced in the United States, has signed a contract with E Solar to purchase 245 MW of solar power to be produced by new solar installations in the Antelope Valley north of Los Angeles.

The plants are scheduled to come on line in 2011 and ulitmately will provide enough power for 160,000 homes. According to the Los Angeles Times:

"Under the 20-year contract with Edison, 105 megawatts will be available by 2012, with the full 245 megawatts ready by 2013. Financial details, including the price ratepayers will bear, weren't disclosed."

The Times write-up aloso notes:

"The plants will employ a solar-thermal process involving thousands of mirrors, or heliostats, spread across seven 160-acre plots in Lancaster.

The mirrors concentrate the sun's rays onto water-filled receivers atop towers. The water boils, creating steam that operates turbines to create electricity.The installation will be more cost-effective than most tower plants because the towers and mirrors are smaller, said ESolar Chief Executive Asif Ansari, giving the private company an edge over dozens of more-experienced solar suppliers now scrambling for space in Southern California deserts. The towers and small mirrors, which can be assembled without heavy machinery, make for a more efficient permit and setup process, Ansari said."

E Solar was launched by Pasadena-based Idealab in 2007.

Edison gives ESolar its first major power deal [Los Angeles Times]

Zero Emission Plant

In today's Sacramento Bee, Dan Weintraub elaborates on that carbon sequestration project in Kern County that we posted on a couple of weeks ago.

The 50 MW plant being constructed by Clean Energy Systems is doing a lot more than just trapping CO2 emissions underground, it is using advanced aerospace engineering to to create a plant that emits zero NOx emissions:

"But the idea of using pure oxygen rather than air in the power plant is at the center of the CES project. Air is 80 percent nitrogen. When you combine it with a fuel source during combustion, you get nitrogen oxide, or NOx. That's a primary ingredient in the smog that clouds the sky in every major city.

To avoid that outcome, the CES plant chills the air until the oxygen and nitrogen gases become liquids and can be separated before the combustion begins. The nitrogen is removed and the pure oxygen is combined with natural gas to produce a flame which, if not moderated, would reach temperatures of about 6,000 degrees. That's too hot to handle for just about anything except flying rockets, so the plant adds water to the mix."

By eliminating NOx and burying CO2, the company may just have hit on a actual zero emission plant. Time will tell.

Building a better power plant -- with no emissions [Sacramento Bee]

Coming To A Neighborhood Near You...

Indiana Jones isn't the only one coming out of retirement these days. There is talk of bringing retired urban drill sites around Los Angeles back on line to squeeze the last drops out crude out of their nearly spent reserves.

KFWB AM 980's (Los Angeles) Lori Kellman has a series of podcasts reporting on the move from every possible angle (economic, environmental, NIMBY, etc.)

The largest urban drill field in L.A. is the Wilmington field and it is putting out about 40,000 barrels a day.

Drilling For Profit [KFWB]