Utilities,
Groups at Odds Over Sources for Renewable Energy
Aug 24 - The Sacramento Bee, Calif.
Now,
they are battling environmental and labor groups over where it's going to come
from.
Utilities
say they can't meet the 2020 goal unless the state allows them relatively free
access to renewable power generated far beyond the state's borders, in places
like
Tapping
a broader range of sources would cut costs, they say. And they argue it would
reduce the need for new long-distance transmission lines within the state to
deliver, for instance, solar power from remote deserts.
"We're
not saying renewables won't get developed in
California; we just need the flexibility" to look for power out of state
as well, said Jim Shetler, assistant general manager
for energy supply at the Sacramento Municipal Utility District.
Labor
and environmental groups accept the need for some of the power to come from out
of state, but they're pushing for legislation that encourages production
capacity to be built in
Pacific
Gas and Electric Co.'s interest in some day buying huge amounts of hydroelectric
power generated on rivers in
"What
would that do to the solar and wind industry in
Legislators
and lobbyists are now haggling over two proposals, Senate Bill 14 and Assembly
Bill 64, that would set the ground rules on what
counts as renewable energy. Getting the legislation passed is a priority for
Senate and Assembly leaders, and both sides in the debate expect a compromise
deal in coming weeks.
State
regulators are counting on the big increase in renewables
to deliver 13 percent of the greenhouse-gas emissions cuts required under the
2006 law that launched
Regardless
of how much imported renewable power the state allows, the target is daunting.
Nearly all of the state's utilities -- SMUD is a notable exception -- now
deliver well below 20 percent of their power from renewable sources. Meeting
the goal will require nearly tripling renewable power deliveries, to 75 billion
kilowatt-hours a year.
The
state's definition of renewable energy includes solar, wind, geothermal and
biomass sources. Hydroelectric power is allowed, but the state counts as
renewable only dams producing less than 30 megawatts or so-called "run of
the river" projects that don't require dams.
A
June report from the California Public Utilities Commission estimates the
infrastructure costs to meet the 33 percent goal at $115 billion and calls the
buildup "immense and unprecedented." The PUC analysis supports the
utilities' argument that more out-of-state power would reduce costs -- though
the difference per kilowatt-hour is relatively small.
Even
without the 33 percent mandate, average costs for power would be expected to
rise nearly 20 percent -- to 15.8 cents per kilowatt-hour -- by 2020 because of
rising maintenance and infrastructure expenses. That doesn't include
inflationary increases.
Getting
to 33 percent renewable power on the state's current path -- with a big focus
on rapid expansion of desert-based solar power -- would bump up costs an
additional 7 percent, or 1.1 cents per kilowatt-hour. Using more out-of-state
power might cut that premium to 0.6 cents per kilowatt-hour,
while building more small-scale projects that don't need long-distance
transmission might increase it to 2.3 cents, the PUC estimated.
Importantly
for the
The
new rules stand to hit Roseville Electric particularly hard. The small
municipal utility currently gets 12 percent of its power from renewable
sources. About 40 percent of that, though, comes from out-of-state and other
contracts for renewable energy "credits" that Roseville Electric
Director Tom Habashi said likely could not be counted
toward the 33 percent mandate.
It's
possible the contracts could be restructured to comply, Habashi
said. For now, he's waiting for the Legislature to act before looking for any
more renewables.
"We've
been on a freeze," he said.
SMUD
also faces a tough climb to 33 percent. While the utility will deliver about 20
percent of its energy this year from renewable sources, many of its power
contracts will expire soon and renewal may not be an option.
"We
have a cliff coming up," energy supply chief Shetler
said.
SMUD
recently lost a large geothermal contract that once provided roughly one-fifth
of its renewable energy.
Demand
for renewable power is high, so generators are shopping their energy around to
the highest bidder, said Mike DeAngelis, who manages
the utility's renewable energy programs. Houston-based Calpine Corp., which
owns several geothermal power plants near Calistoga, sold off the contract to
another utility without giving SMUD a chance to renew, he said.
The
collapse last month of a transmission-line project that would have linked
One
key uncertainty in the legislative debate is how strictly the 33 percent
mandate will be enforced. Utilities are looking for escape hatches that would
suspend the mandate if it proves too difficult or costly to meet. Environmental
groups say they don't want the rules to be too lenient.
Call
The Bee's Jim Downing, (916) 321-1065.
-----
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