Friday, October 30, 2009

$30 Million in Tax Breaks Lures Tesla to SoCal

Where is uber-chic electric car maker Tesla going to site its new assembly plant? Southern California, for sure, but it remains to be seen if a dormant Boeing facility in Long Beach or the Downey Studios in Downey will be the winner of the Tesla sweepstakes which carries a prize of 1,400 new jobs created.

Here's how it works:

Tesla will buy $320 million in equiment it needs to outfit the plant. It will then convey title of that equipment (i.e., "give") to the CAEATA, which under its charter, pays no sales tax. Then the CAEATA will give the equipment back to Tesla, so nobody ends up paying the 9% sales tax on the $320 million.

Apparently it's legal.

Read the story in the San Gabriel Tribune:

Tesla gets tax break, hopes to open plant in Southern California [San Gabriel Tribune]

Thursday, October 29, 2009

Damned if you do, Damned if you don't...

State Rep Ira Ruskin teams up with Environment California's Charlotte Glennie in an oped in today's Palo Alto Daily News in which they call out Arnold for his lack of leadership on green energy.

They claim that with "more substantial and tenacious leadership at the state level," we can create 200,000 new jobs in the clean energy sector.

What they are really miffed at the governor about is his veto of SB 14 and AB 64, which would have written the 33% RPS standard into law. Recall that Arnold did mandate 33% by Executive Order but that does nothing to placate Ruskin and Glennie.

Read the oped here: California must commit to more renewable energy [Pali Alto Daily News]

Wednesday, October 28, 2009

PG&E Going Above & Beyond on Net Metering

When the bill to raise 2.5% cap on net metering stalled in the legislature, the solar industry had a problem. However, PG&E announced yesterday that it had cut a deal with the Governor to voluntrarily take up to 3.5%, a full point in excess of the legislated requirement. That gives net meterin a new lease on life, at least temporarily.

According to David Baker in the San Francisco Chronicle, PG&E had expected to hit the 2.5% threshold by 2011.

Read the whole story in the Chronicle:

PG&E to accept more solar power from homes [San Francisco Chronicle]

Tuesday, October 27, 2009

Yet Another Front In The Solar Wars

Solar energy proponents are getting pretty adept at jumping through hoops in order to bring more capacity on line. First there were questions about the cost and efficacy of solar; then there were the problems related to building new transmission lines to service new solar farms; then there was the unexpected and ironic conflict between planned solar farms and sensitive desert ecology. Now a new obstacle has popped up: water.

With California in the throes of chronic drout, and a contentious legislative debate over water policy, the New York Times reports that two new solar farms slated for development will require over 1.2 million gallons of water for cooling purposes. You can imagine how that sounds to parched delta farmers and spoiled southern California homeowners who are watching their lawsn become more brown every day due to water restrictions.

According to the Times:

"The West’s water wars are likely to intensify with Pacific Gas and Electric’s announcement Monday that the utility will buy 500 megawatts of electricity from two solar power plant projects to be built in the California desert.

The Genesis Solar Energy Project would consume an estimated 536 million gallons of water a year while the Mojave Solar Project would pump 705 million gallons annually for power plant cooling, according to applications filed with the California Energy Commission."

At issue is "wet cooling" which requires constant replenishment of evaporating fluids, versus "dry cooling" which uses less water but is more expensive and eats into profit margins.

Water Use by Solar Projects Intensifies [New York Times- Green, Inc.]

Monday, October 26, 2009

Oil Tax Resurfaces

As termed-out Rep. Pedro Nava runs for Attorney General, his controversial bill to create an oil severance tax is getting more attention. In a piece in, the idea--which voters defeated a few years ago (Prop 87) and later revisited by Arnold-- is presented as a classic tax and spend proposal.

Nava gave his bill the tediously cliche title the "Oil Industry Fair Share Act." (Side note: whoever the pollster is who first focus grouped the phrase "fair share" and determined that it tested well enough to hang on every tax hike proposal ever put forth in any legislative body in America, should have copyrighted it-- he'd be a gazillionaire.)

Anyway, Nava claims that California is the only state not to have an oil severance tax and that because California produces so little oil in the grand, global scheme of things, it would not impact the cost of gas at the pump. (Nava estimates the tax to be worth $1.5 billion per year).

My immediate reaction to that comment is that Nava appears to believe the tax is ok, as long as oil production remains low. To put it another way, this is a bill designed as much to stifle oil production (no surprise to anyone familiar with Nava) as it is to raise revenue. obviously picked up on that too, because it points out that a respected consulting firm, Law and Economics Consulting Group, studied the impact of the bill and concluded that it would be a job and an industry killer :

"The report, released in January, estimated that the oil producers' tax could, among other things, cause steep declines in the state's oil and natural gas production and the loss of nearly 9,900 jobs."

California's oil production is already among the most heavily taxed in the country. This new oil tax would make California's combined taxes on petroleum the highest in the nation by far," the LECG report said.

Friday, October 23, 2009

Micromanaging California Is NOT Cool

CARB is at it again. At a time when California is reeling and on the brink of collapse, CARB is moving forward with what can only be called a silly distraction.

The agency wants to pass a regulation (just what California needs—more regulation) requiring car windows to be coated with a metallic glazing compound.

The idea, apparently, is to keep cars cooler requiring less air conditioning use which would save gas and cut down on fluorocarbons from air conditioners.

Dubbed the “Cool Cars” initiative, this will cost consumers more money at a time when money is tight, and it will add to the cost of a vehicle (one more line item on sticker price). But how much effect will it have? Will drivers truly stop using their air conditioners?

If the recent ban on handheld cell phones in cars—which appears to have about 1% compliance where I live—is any indication, regulations don’t change consumer behavior.

Opponents of the proposed reg point out that the new glazing wreaks havoc on cell phone signals, gps signals, and just about any other wireless gadget /toy that Californians rely on in their cars.

So we are now facing a potential ban on big screen TV’s and mandatory window glazing in cars.

Is that really the best use of our legislative and regulatory resources at time when the state is literally about to collapse under the weight of fiscal deficits, underfunded pensions, decaying infrastructure, overcrowded prisons, lack of health care, hopelessly challenged schools, devastating out-migration, and an overall lack of resources?

In this context, the Cool Cars initiative is anything but cool...

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Thursday, October 22, 2009

New Meters Leave PG&E Customers Smarting

The natives are restless. PG&E got an earful from angry customers who are a tad bit miffed at their new PG&E smart meters. The Fresno Bee reports that more than a hundred people attended a town hall meeting called by Dean Florez, and nary a person spoke up in favor of the smart meters which ratepayers say have cause major spikes in their bills.

One person noted that his $500 a month bill more than doubled to more than $1,100.

For it's part, PG&E blamed hot weather and recent PUC rate hikes, but that message was lost on the angry mob which resorted to using the "F-word." (Fraud... Not the other F-Word... although I bet that was tossed out too, just not reported.)

What is striking about the meeting is that it went a full 4.5 hours and not a single person spoke in favor of smart meters.

Addressing the question of the reliability of smart meters, the PG&E rep in attendance noted that there are 1.7 million smart meters installed and the companyhas tested 1,700 of them-- 1%. Not surprisingly, Florez and others balked at the sameple size.

In a post this spring, I posted a quote from a Business Week piece on smart grid technology that said the following:

"In particular, they're leery of giving utilities the ability to change electricity prices on the fly, jacking rates up on hot summer days, for instance. Most utilities are prohibited from using variable prices now, but the flexibility to raise rates for a community as demand rises is essential for utilities to get the full benefit of new technology. Consumer groups worry these so-called smart-grid technologies are just another way for utilities to make extra money off consumers."

Sounds like the chickens have officially come home to roost.

Wednesday, October 21, 2009

Doing the Math on Home Solar

So we know it is impossible to build a large, commercial solar project in California, but how about installing solar at your house? The Desert Sun has a reality check on home solar today, and does a deep-dive analysis on the three primary options for getting it done.

The Sun looks at home solar from a return-on-investment perspective and concludes that it is definitely not for everyone.

Basically there are three basic options for financing the approximately $28,000 project: get a home equity loan, a zero interest loan, or enter into a lease agreement with a solar provider.

Critically important factors that most people fail to include in back of the envelope solar calculations are things like financing costs and eligiblity for tax breaks.

The take-away on the analysis was that home equity loans are nearly impossible to get right now because banks are not lending, zero interest loans are a ticking time bomb that can morph into credit-card-like interest rates after a year, and solar leases disqualify homeowners from federal tax credits because they don't "own" the solar array.

So I gues the net-net is, if you can write a $28,000 check, solar is a good investment for your house, but if you can't it could be a non-starter or-- worse-- an enormous problem down the road.

Tuesday, October 20, 2009

Good Luck Chuck!

I admit to having a soft spot for Chuck DeVore (it's a nuclear thing, you wouldn't understand).

He sat down for an interview that was posted on yesterday and covered a variety of topics relative to his (some would say "quixotic") campaign for the U.S. Senate.

In the interview, he called Cap & Trade "insane"; AB 32 a "bad law"; and he claims that Democrats in Sacramento are routinely "freaked out" when construction unions join him in supporting more nuclear power plants.

There is something refreshing about a plain spoken politician-- even one who is facing a really big uphill challenge.

You can check out the entire transcipt here:

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Monday, October 19, 2009

All This Time and Nothing's Changed!

Has it really been a month? I feel a little like Rip Van Winkle... anyway, a short break followed by a two week vacation and it's back on line!

What is just as amazing as how fast time flies, is that nothing ever seems to change!

The top story in my aggregator this morning as from the Los Angeles Times about how environmental regualtions are slowing large-scale solar developments in the desert. How long have we been talking about this?

According to the Times:

"Companies are racing to finalize their permits and break ground by the end of next year, which would qualify them to obtain some of the $15 billion in federal stimulus funds designated for renewable energy projects.

At stake is the creation of 48,000 jobs and more than 5,300 megawatts of new energy, enough to power almost 1.8 million homes, according to federal land managers. But the presence of sensitive habitat, rare plants and imperiled creatures such as desert tortoises, bighorn sheep and flat-tailed horned lizards threatens to stall or derail some of the projects closest to securing permits."

The Times write-up doubles down on the regulatory gridlock that is keeping these projects in limbo by noting that, in addition to environmental issues, government bureacracy is now making the problem worse. Between fuloughs and budget cuts, state agencies simply cannot keep up with the paperwork.

I suppose the story is a microcosm for just about everything else that is going on in California... judge for yourself: