Whitman On AB 32: Just Say No!

Tip 'o the hat to Wyatt Buchanan at the San Francisco Chronicle for posting on Meg Whitman's oped in the Merc on Thursday... I completley missed it. If you did too, Whitman came out and said that on Day 1 as governor, she would suspend AB 32 and reform CEQA.

In this election season, them's fighing words!

Here are some choice pull quotes form her oped:

"With this ongoing economic crisis, the governor has the ability to issue an executive order putting a moratorium on most AB32-related rules. I urge him to do so. And if he does not, I will issue that order on my first day as governor.

We first must get our economy back on track. In January, the first AB32 mandates take effect and will lead to higher energy costs at a time when we can least afford them. They will discourage job creation and could kill any recovery.

Meanwhile, Congress is working on its own version of AB32. We can't measure the true impact of AB32 on California's economy until we know what the federal standards will be. So a moratorium now on AB32 would give us an opportunity to coordinate our environmental efforts with Washington. And if we do it right, it might save California businesses time and money. This is surely preferable to even more jobs fleeing our state.

The California Environmental Quality Act, or CEQA, is also ripe for reform. It is a jumble of ambiguous rules that require environmental analysis of projects ranging from a nuclear power plant to bike lanes. Over time, CEQA has been expanded way beyond what the Legislature originally intended. It often eats up time and money and discourages business expansion."

Opinion: To create jobs, curb environmental regulation [San Jose Mercury News]

Candidates Go Nuclear

At a gubernatorial candidate forum put on last night by the Silicaon Valley Leadership Group, every major candidate from both parties embraced nuclear power! (Meg Whitman, a Republican, was a no-show because she was speaking at a conference in San Diego).

Politically, the issue was a no-brainer for Republicans Tom Campbell and Steve Poizner, but Democrats Jerry Brown and Gavin Newsom have to keep manage their liberal Democratic base which is decidedly anti-nukes. Newsom was the most cautious, giving a tortured political response about seeking solar and wind alternatives first, but not ruling out nuclear power entirely.

Currently, nuclear power accounts for 15% of Claifornia's power but there is a moratorium on new nuclear construction until we can come up with a solution to the problem of storing nuclear waste.

Governor contenders toss around nuclear power [San Francisco Chronicle]

It's Official

Arnold has declared by Executive Order that California's utilities will now need to get 33% of their power from renewable sources by 2020.

On its face, this seems like an environmentally progressive move, but everyone from environmentalists to labor is not happy about the way it was done, and even though the new standard is legally authorized under AB 32, questions remain about how much force of law it will have after the Governor leaves office.

One of several stories on the announcement is in the Los Angeles Times:

Schwarzenegger orders more renewable energy -- his way [Los Angeles Times]

Without Net Metering, Solar Isn't So Attractive

Another casuality of the mad scramble at the end of the legilsative session was AB 560, Nancy Skinner's bill to double the cap on net metering from 2.5% to 5%. The bill really would have only affected PG&E which is the only utility nearing its 2.5% cap, but it's failure to pass could send a chill through the California solar industry.

Under net-metering, solar-equipped homes can send excess power back into the grid, drastically lowering their utility bills. However, a the amount of solar power a utility can take back from ratpayers is capped at 2.5% of its peak load.

The bill got bogged down by amendments governing contractor licensure that labor groups pushed for.

California Legislature inaction dims solar power savings [Sacramento bee]

Arnold To Take Matters Into His Own Hands

So no compromise was reached last week and both SB 14 and AB 64 are going to be vetoed by the governor this week. The good news (for fans of a 33% RPS) is that the Governor is expected to issue an executive order this week that mandates the new standard; the bad news is that there are serious questions about what--if anything-- this means once the Governor leaves. office.

Interestingly, the Executive Order supposedly will include nuclear power among the other traditional green energy options (solar, wind, etc...)

Full write-up is in the Los Angeles Times:

Schwarzenegger may order a change in green energy rules [Los Angeles Times]

Still Waiting on 33%; SDG&E Plan to Cut Power Goes Down in Flames

As of Friday morning there was still no deal on consensus legislation to increase the state RPS to 33%. According to an Associated Press write-up:

"Democrats are pushing two bills that would require utilities to get a third of their power from renewable energy sources by 2020. It would be the most aggressive such standard in the nation.

How and where utilities would be allowed to get that energy remains a point of contention between the utilities, producers of renewable power, environmental groups and consumer advocates.

California already has one of the most aggressive standards of the 31 states that require utilities to generate a certain amount of their power from renewable sources, according to the Arlington, Va.-based Pew Center on Global Climate Change. In Hawaii, utilities must generate 40 percent of their power from renewable sources by 2030 — a longer timeframe than the goal being considered in California.

The Senate and Assembly are expected to vote on two companion bills by the end of Friday, the last day of the regular legislative session. Neither bill had Republican support in committee."

Elswhere, the PUC killed SDG&E's plan to shut off power to back country consumers during fire-prone weather conditions (high winds, low humidity). The vote was 4-1.

The Los Angeles Times reports:

" Opponents said the shut-off plan would endanger back-country residents by leaving them without electricity to pump water onto small fires. About 17 areas with 60,000 customers were targeted for shutoffs when humidity was low and winds hit a sustained rate of 35 mph or gusts up to 50 mph."

Calif. lawmakers weigh rules on renewable energy [Associated Press]

PUC rejects San Diego utility's plan to turn off power during high winds [Los Angeles Times]

REC's & Out of State Power Deliveries Stymying a 33% Deal

Capitol Weekly reports that, as of yesterday, intense disagreement over the nature and role of REC's and over the timing of out of state power deliveries were holding up a deal on a Senate bill legislating a bump in the RPS to 33%.

Capitol Weekly:

"By Tuesday afternoon, the package remained a work in progress, four days before the end of the legislative session. Negotiators included representatives of business, manufacturing, the investor-owned utilities, the public utilities, the environmentalists and regulators, among others.

The sticking points included details of renewable energy credits, which could be bought and sold on the open market, and the delivery and timing of out-of-state power coming into California.

There also were questions of whether existing power contracts can be grandfathered in, and the extent of provisions that would ease the rules on utilities if they were forced to buy renewable power at 6 percent or more above a market benchmark.

The sharpest opposition came from the manufacturers, who purchase large amounts of electricity. Aside from the cost, they note that the state Air Resources Board, which enforces the state’s landmark greenhouse gas emissions law, also has authority to the renewables to 33 percent, according to a scoping plan adopted by the board. "

Renewable power: People love it, but devil is in the details: Capitol Weekly

Still More on T-Ridge

KQED's Sacramento Bureau Chief John Meyers does a big story today on one of our favorite topics.... T-Ridge!

Here's a link to the blog post and the audio: Drill, Maybe Drill.

The 33% Pipe Dream

Last week we posted about the scramble to find a path forward to the 33% goal prescribed by Gov. Schwarzenegger. Today, Southern California Edison CEO Alan Fohrer, in published commentary in the Los Angeles Times, says, Fuggeddaboutit. Aint happening.

Fohrer argues that, political will aside, it simply isn't possible to hit the 33% benchmark by 2020.

He points out the following:

Utilities need to be able to supplement the renewable power they produce in California with renewable power purchased from outside California. Until Sacramento is willing to let that happen, 33% just is not achievable.

Second, to transmit all of the new renewable energy from the remote spots across the state where the sun shines most and the wind blows hardest, you need transmission lines-- 11 new transmission lines to be exact. And given that each transmission line takes-- on average-- 10 years to build, the 2020 deadline isn't realistic.

Third, because we don't yet have a good way of storing renewable energy, we need fill-in power from traditional generating sources to backstop the state when the sun isn't shining or the wind isn't blowing. That means more power plants, but given air quality regulations and environmental mandates, the number of power plants is actually declining, not increasing.

Finally, CalISO estimates that achieving the 33% benchmark will cost $115 billion. Ultimately a hefty portion of that would have to be passed on to ratepayers. Dealbreaker.

Reality can be sobering.

Why 33% renewables by 2020 may be impossible [Los Angeles Times]

Checked Out!

Happy Labor Day weekend! Last big weekend of the summer-- enjoy it!

The Great Solar Upheaval

Spain, one of the global leaders in government-incentivized development of alternative energy, decided to stop subsidizing solar installations. The move exacerbated an already chaotic solar industry worldwide, and has policy wonks debating what the decision means for government incentives for renewable energy in general.

Dow Jones columnist Jamie Miyazaki sees a "bloodbath" in the solar industry that stems from a perfect storm of low cost Asian suppliers, polysilicon supply shortages, and the Spanish policy shift.

She opines that, to survive, companies will need to vertically integrate or outsource, but that cash-rich companies could swoop in and make relatively inexpensive acquisitions from among the carnage once this all plays out. Hopefully, the entire episode will result in market prices that are competitive even in the absence of subsidies.

But what of the policy implications? The larger question of "should governments continue to subsidize solar and other forms of alternative energy?" looms large.

Proponents of government subsidies look at the Spain case sudy and note that government assistance is critical to establishing the necessary infrastructure to capitalize on alternative energy. However, after that infrastructure is in place, subsidies become less important.

Detractors argue that governments are creating bubbles that ultimately will burst, to the detriment of the larger economy.

The Wall Street Journal takes a deeper dive into the policy side of the solar upheaval:

"The U.S. is experimenting with different ways to promote clean energy, including tax incentives and direct federal subsidies to defray installation costs, and mandates for utilities to get a certain amount of their power from renewable energy.

California and New Jersey, which lead the U.S. in solar power, are among states that have used subsidies similar to the ones in Spain to make solar power more attractive. Two House Democrats, Jay Inslee of Washington and Bill Delahunt of Massachusetts, are drafting legislation that would create European-style tariffs for solar power.

The industry's fundamental problem is that, without subsidies, it's still not economically viable."

Spain's Solar-Power Collapse Dims Subsidy Model [Wall Street Journal]

Follow The Money

Further evidence that investment dollars are staring to flow to clean energy projects (but not in the biofuel sector), the Los Angeles Times reports that Vinod Khosla, the famous Silicon Valley financier, has raised $1 billion for a fund that will invest in early and mid-stage companies in the green tech space.

According to the Times:

"It is the biggest first-time fund in a decade and comes as venture capital investment in green technology is just beginning to recover from a precipitous fall prompted by the global economic collapse last fall. In the first half of the year, investments in green tech plunged to $513 million from $2 billion in the first six months of 2008, according to a survey by PricewaterhouseCoopers."

Separately, the Wall Street Journal notes that all of the public sector money flowing to alternative energy deals through federal grants and tax incentives, is largely going to the benefit of foregin company companies that own the ventures, directly or indirectly.

More fodder for the debate over the role of government in private enterprise?

Khosla Ventures raises $1.1 billion to invest in green technology [Los Angeles Times]

U.S. Doles Out Grants for Energy Projects [Wall Street Journal]

Sempra Leads the Pack in Smart Grid Adaptation

Intelligent Utility Magazine is out with its national survey of smart grid adaptation by major utilities, and Sempra ranks first in the nation:

"In 2008, the company installed 4,500 smart devices on San Diego homes and businesses, making it one of the first utilities in America to meter up its customers. The move was a first step in a half a billion dollar effort to convert 1.4 million aging meters by the end of 2011.

This month, Sempra subsidiary San Diego Gas & Electric was picked as a part of a $99.8 million federal grant to help make the city's grid plug-in ready for the cars of the future."

But the write-up notes that "optimism" about progress should not obscure the reason it undertook the survey in the first place:

"today's smart grid hype must be separated from reality. Utilities are anticipated to be the drivers behind mass smart-grid adoption. And the truth is, none of the nation's "intelligent" utilities is even close to being all the way there. Many still lack a long-term smart-grid roadmap."

In its report on the survey, the solveclimate.com blog calls today's grid a "dirty energy suck" and notes that smart grids are the "vital cure."

2009 Smart Grid Rankings Are Out: California’s Sempra Energy in 1st [solveclimate.com]