Editorial: Step up to save CCA and take on PG&E

08.01.11 - 2:18 pm |

(110)

Two things became abundantly clear at the San Francisco Public Utilities Commission meeting July 26th: The Community Choice Aggregation program is off track -- and General Manager Ed Harrington has no interest in making in work. The supervisors need to move aggressively to save CCA.

Since 2007, when a draft implementation plan was released, the goals of the program -- which is supposed to offer a cleaner alternative to Pacific Gas and Electric Co. -- have shifted fairly dramatically. No longer does the plan seek to meet PG&E’s rates. No longer is it aimed at the entire city. And the PUC is putting most of its effort into a short-term contract to buy green power from Shell Energy North America -- and all-but ignoring the more important moves to build a publicly owned energy-generation infrastructure.

CCA, which allows cities to buy power in bulk and resell it (along existing private utility lines) to customers, is a step in the right direction. The program now before the PUC would put San Francisco in the public power business -- to a degree. But as the financial projections for the program demonstrate, the real savings and the real revenue won’t come until San Francisco replaces PG&E as the owner and operator of the local grid. A full-scale public power system would allow the city to both increase renewable power and cut rates -- and would bring hundreds of millions into the treasury in the process (see “Mud Money,” 6/26/08).

Still, CCA offers many benefits -- including the chance for the city to build local renewable energy facilities. And that’s where the PUC’s efforts ought to be focused.

During discussion of the proposed contract July 26th, Harrington was largely negative and talked repeatedly as if he didn’t think the original program could work. He kept saying that renewable power was more costly (true, today -- but not after the city starts building its own facilities). He said that the goals the “advocates” (who include a majority of the Board of Supervisors) have demanded were unrealistic. And most of the commissioners seemed clueless.

That’s a terrible way to launch one of the most important environmental and financial initiatives in modern San Francisco history. Marin County is already well on the way to creating a working CCA system. Other counties are moving forward. And San Francisco, the only city in the nation with a federal mandate for public power, can’t get its civic act together.

The supervisors need to get involved, quickly. The Local Agency Formation Commission, which is overseeing this project, should haul Harrington in for a hearing as soon as possible. Among other things, the LAFCO members should ask why Harrington is so determined that the project won’t work; why his proposal is geared to a small number of residents and businesses who would face higher rates for power; and what his plans are to create a local energy generation infrastructure that over the long run would be dramatically cheaper and greener than anything PG&E will be able to offer.

The problems with CCA reflect the immense challenges of putting this program in the hands of a commission a majority of whose members were appointed by a mayor who opposed public power, managed by someone who has never supported municipalization efforts. Harrington and the SFPUC appear to be setting CCA up to fail. The supervisors need to step in before that happens.

Comments

Thanks, CCA = CleanPowerSF, & Web Sites For More Info

Thanks for the sharp critique of the SFPUC's plan, to essentially abjectly fail to properly compete with PG&E, by not planning for any substantial community owned citywide renewables, or efficiency installations.

For those new to this issue. San Francisco's CCA is called CleanPowerSF.

For more information on how the program will work see:

http://our-city.org/campaigns/CleanPowerSF.html

and

http://our-city.org/resources/cca_energy_factsheet.pdf

Posted by Eric Brooks on Aug. 01, 2011 @ 8:29 pm

There isn't much public support for any

form of public power. The average resident doesn't care, and have shown that at the ballot box many times.

I suspect the lack of political will at the top simply reflects the public apathy on this topic.

Posted by Harry on Aug. 02, 2011 @ 10:25 am

CleanPowerSF/CCA Not Public Power - It Is Consumer Cooperative

As Greg points out there is actually considerable support for public power, and in the 2008 SF election on Prop H, PG&E had to spend 10 million dollars to trick voters into opposing it. Without that ridiculous infusion of campaign spending PG&E would have lost.

With that said, CleanPowerSF is not public power. Under CleanPowerSF PG&E will still own the transmission networks and do all of the power delivery just as it has always done.

The only difference, is that CleanPowerSF will allow San Francisco consumers to compete openly with PG&E for electricity supply, and clean electricity generation.

That's not public power, it is instead a customer cooperative, which puts consumers directly in the driver's seat as to where our energy comes from and how clean and renewable it will be.

Posted by Eric Brooks on Aug. 02, 2011 @ 2:23 pm

No support for public power

That's why PG&E has to outspend public power forces by 100-1 each time, and even then they had to get Willie Brown to steal the election in 2001 with those ballots in the bay.

Oh no, no support at all.

Posted by Greg on Aug. 02, 2011 @ 1:42 pm

Greg, every Prop for public power has failed.

You can blame corporate "influence" or election fraud or public indifference or whatever you want. Even with Bruce's "weighty" and often ponderous pontifications, there continues to be little evidence that the man on the street gives a flying crap about exactly who ensures that the light goes on when he throws the switch.

Give it up. It ain't happening.

Posted by Harry on Aug. 02, 2011 @ 2:34 pm

I wouldn't mind seeing another campaign

In the wake of the corporate terrorism perpetrated on the people of San Bruno, I wouldn't mind seeing another try at public power through the ballot in San Francisco. They had to cheat to get themselves over the 50% mark in 2001 (and then only barely). In light of everything that's come out since then, I'm not convinced that any amount of money, even with an assist from election fraud, would save them now.

Posted by Another Sycophant on Aug. 02, 2011 @ 3:10 pm

PG&E Had To Spend Tens Of Millions To Stop Muni Power

This is a very tired old broken record about past public power ballot measures.

Those measures only went down because PG&E spent tens of millions of dollars to kill them.

In a fair fight, San Franciscans would have agreed to municipalization a long time ago.

And we would be saving around 200 million dollars a year due to no longer having having to pay PG&E a profit for our electricity.

Posted by Eric Brooks on Aug. 02, 2011 @ 3:26 pm

Sorry, renewable energy costs more

Renewable energy generally costs more than other forms of electricity generation. I wish it didn't, but it does. Therefore, it's virtually impossible for a CCA to offer an electricity product with significantly higher shares of renewable energy than PG&E's mix at comparable rates. I do not understand the editorial board's assertion that renewable energy would not cost more if the city began building its own renewable energy facilities. The extensive analysis performed by Berkeley's Energy Commission on CCA (http://tinyurl.com/bec-cca-report) shows that this is likely not true. Federal investment tax credits largely level the financial playing field between private developers and public agencies with respect to the construction of eligible renewable generation facilities. That's why even the Sac Municipal Utility District actually buys most of its renewable energy through competitive solicitations from private developers.

Emphasizing "local" renewable energy development exacerbates the challenge of maintaining rate parity because SF does not have particularly good renewable resources. Google "solar insolation map California" or "wind resource map" and see for yourself. The SF PUC's own consultant report substantiated what should be a fairly intuitive conclusion. (http://sfwater.org/Files/Reports/Draft_SFPUC_Task4RPT_NOV09.pdf)

I believe the SF PUC is simply being honest. If you want a higher renewable energy mix, you have to be willing to pay more for it. And if the product SF PUC is offering will cost more than PG&E's rates, SF PUC is wise not to opt in the entire SF population by default. I am sure there would be an enormous backlash if they did.

Posted by Guest on Aug. 02, 2011 @ 3:59 pm

Renewable Energy Is Obviously Less Expensive - Fuel Costs Money

Apparently 'Guest' you either did not read my previous post or you are somehow strangely unable to understand its very simple logic.

Locally installed renewable energy and efficiency, built together in a well planned, comprehensive, citywide program (a program which is very purposely financed over time to include its long term fuel-free revenues and cost savings in its start up rates) is not only competitive with fossil fuel electricity, but will obviously be less expensive.

The problem with the bureaucratic studies which you cite is that they don't factor in a long term financed, well designed program like this.

To get a sense of the actual facts around affordability of localized renewables and efficiency see 'Community Power: Decentralized Renewable Energy in California', at:

http://www.localcleanenergy.org/Community-Power-Publication

Posted by Guest on Aug. 02, 2011 @ 5:27 pm

The Facts Prove That Renewables & Efficiency -Create- Revenue

Here is the previous post that I referred to above:

When you build local, community owned renewable energy generation and efficiency installations, after their initial up front costs, those projects -make- money because they don't depend on continuous purchasing of fossil fuel.

Once a solar panel or windmill is paid off, it will then generate essentially free electricity for decades, and that electricity creates revenue. Once efficiency installations are paid off they create large savings which can then be rolled right back in to the the city program making the whole system even more affordable and profitable.

The secret to making a large scale local buildout work in the CleanPowerSF program is to specifically design the entire program to pay for itself over a 20-30 year period by utilizing future revenues from wind, solar, efficiency, etc so that you create a green jobs boom, give customers far cleaner and more localized energy, and at the same or lower rates than PG&E. Its like creating an energy infrastructure with a long term mortgage so that initial high costs are completely balanced with future energy revenues.

It is this strategy which our local SFPUC seems totally incapable of understanding or implementing.

The Board of Supervisors needs to step in immediately and demand that the SFPUC stop fooling around with bad and overly expensive short term designs, and instead listen to the experts and build a long term project with a robust local buildout, which can deliver hundreds of near term jobs, large scale local clean energy, and -true- competition with PG&E.

Posted by Eric Brooks on Aug. 02, 2011 @ 5:46 pm

the facts

Eric, the key phrase in your reply is "once a solar panel or windmill is paid off." Yes, you're correct that once it's paid off, it generates low-cost electricity (not quite free because maintenance is still required particularly for aging wind turbines, inverters need to be replaced periodically, etc.). The problem is how would a CCA charge competitive rates during the intervening 20 years while it is paying off its bonds? I would love to believe that a CCA can deliver a 50% or even 100% renewable mix of energy at competitive rates, but before I believe it I will need to see detailed financials: what is the mix of resources in the portfolio, where are the facilities located, what capacity factor is assumed, what capital and installation costs are assumed, what is the rate on the bonds the CCA would issue...?

Like I said in the previous post, SF does not have any wind resource worth developing (see http://www.windpoweringamerica.gov/images/windmaps/ca_50m_800.jpg) and has relatively poor solar insolation compared to southern and eastern CA (http://en.wikipedia.org/wiki/File:Us_pv_annual_may2004.jpg). That makes the levelized cost of electricity from renewable facilities located in or near SF relatively expensive (fewer kWh over which to spread the upfront costs).

All of these points are covered in some depth in the BEC and Sansoucy reports.

I have examined Al Weinrub's report and it does not demonstrate that a CCA with 50+% renewable content can meet or beat PG&E's rates. It does make the case (with some questionable assumptions about transmission costs) that distributed renewables are roughly as cost-effective as central station renewables (although Appendix A includes a table showing that large ground-mounted systems cost less than 1/2 as much per kWH as residential rooftop systems and nearly 30% less than larger comm'l rooftop systems), but that's not the question that I'm raising.

Posted by Guest on Aug. 03, 2011 @ 11:35 am

How Revenue Bonds Work & How They Will Be Used For Renewables

'Guest' you apparently don't understand how revenue bonds work, and how they will be used to establish large scale local renewables and efficiency.

Revenue bonds (or self funding bonds) work because investors who buy the bonds can see that they will be paid of easily with interest over time. An investor, at the -beginning- of a project pays for the revenue bonds to -build- the project and then receives the financial returns for buying those bonds over the life of the project. This is how a great many municipal and private projects are in fact funded.

For example, a transit agency builds a toll bridge knowing that a given predictable number of people, over time, will cross the bridge regularly and pay the toll. Because the number of bridge toll payers is predictable, the transit agency then decides on the toll necessary, and gets investors to buy revenue bonds based on future toll returns. The investors know that future tolls will pay back what they paid for the bonds, plus reasonable interest (thereby making the investor a profit). In this way the full and quite high cost of first building the bridge can be paid at the -beginning- of the process.

Building a local renewable energy and efficiency infrastructure is no different. The first step is to figure out how much capacity of renewables and efficiency can be built, how much it will all cost, and how efficiency savings and revenue from the project will pay that cost plus interest to investors. There is no need to wait 20 years for this to play out. Revenue bonds allow the project to be built immediately.

And your claims about our local capacity for renewables and efficiency are simply false. In 2007, the San Francisco Board of Supervisors passed a basic outline for CleanPowerSF which will construct 360 megawatts of capacity in a harmonious mix of efficiency, wind, and solar; in just the first three years of the program. This would then be expanded to provide San Francisco with at least 50% of its electricity from local renewables within one decade.

Sounds great eh?

Well, there is big problem. And that problem is the SFPUC.

SFPUC staff have flatly refused to commission the detailed study and design work necessary to plan for this renewable build out, so the City can show bond investors the plan and we can then generate the revenue bonds needed to build the project.

All the SFPUC staff want to do is purchase expensive 'renewable' energy on the market (essentially only shifting green power around on the national grid from place to place, instead of building -new- renewables).

SFPUC's ridiculous plan is to charge high rates for their purchased electricity to only a small fraction of customers, and use the very meager income from that process to then build renewables one small project at a time; all -instead- of building a big citywide network with revenue bonds, which will be up in just a few years and will rapidly hire hundreds and likely thousands of local workers.

For the global climate crisis, the SFPUC plan is doubly absurd, because under that plan, it will take roughly 200 years at best for the SFPUC to replace our current fossil fuel electricity with renewables.

But any good environmentalist will tell you that we need to make that shift in -20- years (not 200) or the planet and human civilization will burn.

So once again, SFPUC staff need to listen to the experts and do the work necessary to prepare for a real and rapid local build out of renewables and efficiency.

Finally, the studies that you cite are cherry picked to give the result you wish to portray. However, studies done by -real- experts with long experience in renewables and in Community Choice, say clearly that the more we build local renewables and efficiency at the beginning of a Community Choice project, the more stable and financially successful it will be.

For example, see the Navigant report on CleanPowerSF at:
http://www.sfbos.org/Modules/ShowDocument.aspx?documentid=18707

Most notably, this Navigant report states, beginning at the last paragraph of page 15 (page 18 of the pdf file) that it would actually be wiser to plan for -more- than 360 megawatts of renewables and efficiency in the first three years of the program.

The experts say, that we should plan for, and rapidly build, a large scale local renewable and efficiency infrastructure.

And so does the planetary biosphere that is depending on us to get our act together...

Posted by Eric Brooks on Aug. 03, 2011 @ 1:00 pm

renewable energy financing

Eric, yes I completely understand how revenue bonds work. That's why I stated that one of the underlying assumptions I would want to see in a rigorous financial assessment of a potential portfolio for SFCP is the rate the CCA would need to pay on the bonds. As I said before, according to the CEC, the federal ITC and accelerated depreciation seems to level the playing field: tax-exempt bond financing does not seem to allow publicly owned utilities (much less CCAs) to develop renewable energy projects at lower costs (see Table 1 in the Berk Energy Comm'n report; see also the SF PUC consultant's Task 1 and 2 reports at http://cleanpowersf.org/documents/ges/).

The 360 MW goal of EE and RE and "clean" power (including fossil-based CHP, which is barely, if any, more efficient than modern CCGTs) is not based on rigorous analysis. The Sansoucy Task 1 report estimates that there is maybe 15 MW technical potential of wind power in SF and references a CEC report that shows Twin Peaks is the only site in the City with wind power rating better than class 2. The biogas potential he cites is local combustion of biogas produced elsewhere and delivered on pipelines.

I disagree with your assertion that the SFPUC's proposed plan merely results in reshuffling of existing resources. There are no spare RPS-eligible MWh floating around out there. Anything existing is claimed by some CA utility already. That's why there are thousands of MWs of renewable capacity under contract by the state's IOUs and POUs to meet the 33% RPS. Any RPS-eligible energy that SFCP hopes to procure will *have* to come from new resources.

I am not disagreeing at all that we need more renewable energy, but we should not kid ourselves that it won't cost more, at least in the near- to medium-term.

Posted by Guest on Aug. 03, 2011 @ 2:06 pm

Selective SPUC Stats On One Hand - Clean Energy Reality On Other

'Guest', you are citing lot's of bureaucratic gobbledy-gook, prepared for agencies like the SFPUC which have their heads stuck in the 20th century on energy policy; and which were prepared by consultants who are not renewable energy and Community Choice experts.

But what is -really- strange, is that, though you seem to know this issue well enough to know where to look for specious flawed reports on it, you unfathomably failed to mention that the 150 megawatt wind farm for CleanPowerSF is not in fact planned to be in the City proper, but instead to be outside of the City in a wind corridor (likely in nearby Solano County).

Since you have clearly read the 2007 ordinance which expressly mentions establishing the 150 megawatt wind farm, then you either have a -really- bad memory or you are purposely trying to deceive readers by selectively citing the Sansouncy report and claiming that San Francisco has only 15 megawatts of wind capacity.

You are obviously trying to purposely hide the fact that there is -plenty- of local wind capacity planned for CleanPowerSF -across- the Bay.

Finally, you quite rightly point out that extensive detailed study work, needs to be done to show the plans and financials of how all of this will work through revenue bonds.

What you are failing to mention, is that Community Choice creators Local Power, and, all of the grassroots organizers like myself who have been fighting for real local renewables and efficiency in the CleanPowerSF program, have been specifically insisting for several -years- that the SFPUC commission and -complete- that work so that bond purchasers can be shown a comprehensive plan for the San Francisco clean energy build out.

The SFPUC's response has been to completely and repeatedly -refuse- to engage that study work, and to instead ridiculously try to build the program by purchasing expensive 'renewable' energy on the market through Shell Energy North America as a for-profit broker; all while they cleverly cite a lack of the information which they themselves purposely refused to compile (as you have also just done) as their excuse for not bonding and building a real program...

That is not a renewable energy plan; it is instead a plan to make Shell the next Enron (but wearing a green jacket).

As the editorial rightly states. It is time for the Board of Supervisors to step in, end the SFPUC's nonsense, and build a -real- clean energy and green jobs program for San Francisco.

Posted by Eric Brooks on Aug. 03, 2011 @ 3:21 pm

Eric, George Sansoucy was

Eric, George Sansoucy was hired by the SF PUC precisely to assess the technical and economic feasibility of CPSF. His Task 4 report is a levelized cost analysis of "various resource scenarios" for serving CPSF's load. Referring to the Sansoucy studies as "bureaucratic gobbley-gook" is not a helpful critique. It is not "gobbledy-gook," it is the type of detailed technical analysis that any community should carefully consider before launching CCA. But it sounds like you are simply unhappy with the results. If you have specific rebuttals to his cost data and analysis, I would be happy to see it.

My point about wind resources is that the potential for a CCA to create local jobs is probably fairly limited. If I lived in SF, I wouldn't consider Solano Co. "local," at least not with respect to creating jobs for San Franciscans. Solano is no more local for SF than Altamont Pass where thousands of MW of wind have been built to serve PG&E and other CA utilities' customers.

I still don't understand why you put "renewable" in quotes when referring to SF PUC's potential contract with Shell Energy or why you refer to Shell Energy as the next Enron. CA RPS-eligible energy must be produced in the Western Interconnect (WECC), it must be tracked in WREGIS (which assigns a unique serial # to every MWh of renewable energy produced) and CA's RPS rules prohibit out of state facilities that commenced operations prior to 2005 from participating. If Shell Energy is required to provide RPS eligible energy, then it must be tracked in WREGIS and there is absolutely no question that renewable energy was in fact procured.

Btw, I was the lead author of the BEC report, which we produced while I was Chair of the BEC. While I am CCA-neutral, the other three co-authors are/were rather pro-CCA. But that report was a consensus report -- we all literally agreed to every single word it contains. And collectively, we concluded that it would be very, very difficult for a CCA to achieve 50+% renewable energy content at competitive rates. I have cited several reasons for those conclusions in previous posts (e.g. federal tax incentives that taxable entities can use but not government agencies and other non-taxable entities...).

At this point, CCA advocates who believe that it is somehow possible to offer a competitive retail electricity product that contains a higher share of renewable energy, which is generally more expensive than the large hydro, nuclear and generic market energy (generally gas-fired, which currently benefits from historically low gas prices) in PG&E's portfolio, should provide a rigorous portfolio analysis to demonstrate how it can be accomplished. I have a very hard time seeing how it is possible.

Posted by Scott M on Aug. 04, 2011 @ 11:03 am

Clean Energy Experts Differ Strongly With Your Assessment

The problem is that Sansoucy is not a renewable energy or Community Choice expert. Nor apparently are those who prepared and finalized your Berkeley report.

Hence, the SFPUC and Berkeley results are skewed. Giving Community Choice study over to such consultants to advise on it, is like asking a ford truck mechanic to tell you how build a bicycle.

Community Choice experts like Local Power and Navigant which have each worked specifically on Community Choice since its inception in the mid nineties, have prepared in depth reports which give a completely different take on the design, engineering and financing of these programs. And I would add that in Navigant's case, even -they- tended to be too conservative in their analysis unless they were specifically tasked with answering the right type of forward thinking questions.

Nevertheless, Navigant's report, which I cited in the post above, says spot on, very clearly, what I am saying myself; that extensive, locally built assets are -crucial- to good financing and success of CleanPowerSF. You cannot successfully begin a Community Choice program without carefully planning, and installing, large scale local renewables and efficiency.

On the 'renewables' quoted question, I am pointing out that buying renewables on the market does not in any way guarantee that the full renewable component will actually be built, instead of just shifted from other existing customers to San Francisco (a problem that was rampant during the 'deregulation' era during the mid 90s). And there is also the problem that with more distant electricity sources, more electricity is lost through transmission. Localized installation is key to avoiding this problem.

Finally, your quibbling about where the wind component comes from, is again, simply misdirection.

The program is designed to roll out with:

- 150 megawatts of large wind (the economics demand this)

- 107 megawatts of in-city efficiency installations (a huge local jobs generator)

- 72 megawatts of various small in-city distributed generation (distributed generation just means lots of small local units like home solar panels, steam power retrofits to gas boilers, small windmills on buildings, etc - all big jobs generators)

and

- 31 megawatts of in-city solar installations (guess what - lots of local jobs)

That is 210 megawatts of directly installed in-city -local- clean energy. And this is just in the first three years of the program. That roll out will be at least doubled in the full first decade to bring San Francisco to 50% local clean generation by around 2020.

So your focusing only on the wind component and using it to claim that few local jobs will be generated, is simply bogus.

And jobs installing wind in Solano are regional jobs, which is also very important. (Furthermore, we are going to explore San Francisco building a wind turbine factory as we move forward.)

The core point remains, that the SFPUC has totally refused to plan for and adopt any local build out, period. Not one megawatt. That is a recipe for failure.

The Board of Supervisors needs to intervene and get that local build out underway, so that we get real clean energy, and real green jobs.

Posted by Eric Brooks on Aug. 04, 2011 @ 1:04 pm

Yup, you're right

I give in. You're right -- it is entirely possible to supply 100% renewable energy in five years' time to a city of 800,000 people at rates that meet or beat PG&E's -- even though public agencies have *no* financial advantage in financing renewable energy facilities compared to private developers, for reasons I've explained numerous times and which is validated by the California Energy Commission (do they qualify as clean energy experts?) in the report cited by the BEC. As far as Sansoucy being a Community Choice expert, that is irrelevant. He is an expert in the financing of energy generation assets and there's nothing special about Community Choice: renewable energy is either purchased from private developers or built by public agencies with tax-exempt bonds.

Heck, I'm just a professional with 13 years experience in policy and technical analysis of energy efficiency, renewable energy and carbon pricing policy so I clearly don't know what I'm talking about. I never realized that it could be so easy. (Btw, among my various duties, I also review the utilities' renewable energy contracts when they're filed at the CPUC, so I know exactly how much renewable energy costs.)

Your point about buying renewables on the market resulting in shifting renewable energy around is simply wrong. I've tried to explain it to you before, and I don't know how else I can explain it. The WREGIS tracking system absolutely guarantees that each MWh is counted only once. There is no spare renewable capacity in the WECC that is not already claimed. Therefore, under present circumstances buying renewable energy on the market does guarantee new construction of RE facilities.

Have you actually read the entire BEC report? If you or anyone else can convincingly demonstrate that the analysis in the BEC report is flawed, I would love to know about it.

Finally, if renewable energy is so obviously cheaper, then wouldn't every utility (especially publicly-owned/municipal utilities) in the country build renewables by default? We certainly wouldn't need RPS mandates.

Posted by Scott M on Aug. 04, 2011 @ 1:41 pm

And, actually, one of the

And, actually, one of the co-authors of the report was, and still is, the program director of Bay Localize, which hosts the Local Clean Energy Alliance. I think that qualifies her as a Community Choice expert.

Posted by Scott M on Aug. 04, 2011 @ 1:48 pm

Fossil Energy vs Localized Clean Energy - Totally Different Work

Your fundamental premise is simply wrong.

Community Choice and other large scale localized renewable and efficiency networks are -very- new stuff and need to be analyzed and designed by experts on the cutting edge of the field; not by backward bureaucrats who actually are so lacking in knowledge about renewables and efficiency that they are fool enough to believe the bs that are fed by the fossil fuel energy industry - that renewable energy facilities (which I repeat after they are built generate -free- electricity for decades with no fuel costs) are somehow more expensive over time than fossil fuel. Do you not see the blatant fundamental inanity of that position?

Renewables and efficiency were actually -already- competitive with fossil fuels decades ago. The only reason that fuels like coal, oil and natural gas can compete with renewables and efficiency at all, is that these fossil fuels are -massively- subsidized by national governments.

Now, lets analyze your -other- premise, which is that if localized renewable energy networks were cheaper, for-profit utilities would be adopting them.

No. They wouldn't and they don't, for some very obvious reasons.

First as I reminded above, fossil fuel energy is -heavily- subsidized.

Second, fossil fuel energy corporations make their money by grabbing a hold of fossil fuels and the land under which they exist, and/or by building power plants to turn that fuel into electricity in specific locations which they -own-, and then they make us pay them exorbitant prices for the fuel and electricity that they have therefore hoarded -away- from us at a distance.

Renewables and efficiency measures which are owned by everyone in a community on their rooftops and in their municipal infrastructure in a diffuse network that cannot be walled off for profit, totally blow the fossil fuel energy companies' business model of hoarding energy and making us pay through the nose to get it, out the window. It is patently obvious why companies like PG&E therefore avoid renewables like the plague. Because as soon as they adopt them in any great measure, communities and individuals will realize that they can just provide these resources for themselves and don't -need- the private corporations.

The fact that you, as an apparently college educated man, do not grasp even such simple realities about localized renewable energy and efficiency networks, highlights clearly why it is experts in the field, and not people like you, who should be analyzing and designing these programs.

The SF Board Supervisors needs to step in, let the experts do their job, and give San Francisco exactly the type of community clean energy network that I have described, with at least hundreds of near term term local jobs resulting from it.

Posted by Eric Brooks on Aug. 05, 2011 @ 8:39 am

Public Financing Of Community Renewables

And on your financing point.

First, municipalities, as you yourself stated in your reply, have the ability to generate low cost and tax free revenue bonds for the building of renewable energy networks. That is a benefit that private corporations do not have.

But most importantly, if a city or county builds and owns its renewables and efficiency network itself, it therefore has the massive cost savings of not having to pay a profit to private owners, investors or stockholders.

So it is actually -easier- for municipalities to fund and build localized renewable energy and efficiency networks.

Posted by Eric Brooks on Aug. 05, 2011 @ 8:53 am

I will try to explain this one last time

and then I give up. Go here http://tinyurl.com/bec-cca-report. Go to page 35 of the report and look at Table 1. If you want confirm this for yourself, go to the original CEC report (Klein, 2010) from which that table is taken. Right now, because of federal tax credits and accelerated depreciation, it is not cheaper for public agencies to finance renewable energy projects than it is for merchant power producers. As I explain in the BEC report, when federal tax credits expire, public agencies will have a financial advantage. That is shown in Table 2 of the report on p. 36. As I also explain in the BEC report, I would not expect CCAs to benefit from same bond rates as POUs because POUs have a captive customer base while CCAs do not. (CCA customers can always return to utility service.) Therefore, I would expect investors to consider CCAs riskier than POUs. But maybe not much riskier, in which case CCAs would still have a competitive advantage wrt financing, just not as much of an advantage as POUs.

Posted by Scott M on Aug. 05, 2011 @ 9:29 am

To Repeat - Municipal Systems Do Not Need To Make A Profit

Except that, when profit is factored in, it is municipalities that can beat private providers.

The reports you cite, and your analysis, are myopic, and don't take into account the entire wholistic lifetime analysis of a well designed local renewable and efficiency network roll out.

It is arrogant, zero-vision, fools like yourself, with your haughty and cretinous "I will try to explain this one last time" attitudes, who are responsible for renewable energy -not- being adopted. You need sit down, shut the hell up, and let people who actually know what they are doing, get on with the business of saving the planet.

Posted by Eric Brooks on Aug. 05, 2011 @ 9:53 am

No, Eric, the tables from the

No, Eric, the tables from the CEC factor in the total cost of financing renewable energy: capital cost, profit, interest on debt and taxes. When the federal tax credits expire, you are absolutely correct that municipalities should be able to finance renewable energy facilities at lower cost. I will then agree 100% with your assertion.

There is no need to be insulting. I actually work every day helping to bring thousands of MW of renewable energy online, improving the California Solar Initiative and helping ARB develop the cap and trade regulation so that the environmental damages of fossil fuel consumption are factored into the cost of using fossil fuels. We probably agree on 90+% of issues related to the need to foster renewable energy and mitigate climate change, which I have dedicated my entire professional career to. Our disagreement is very narrow: the ability of CCA to offer a high renewable content product at comparable rates. If Paul Fenn or Marin Clean Energy or anyone else can show me a supply portfolio with the detailed financials that accomplishes that, I will be utterly ecstatic. I just haven't seen it yet.

For the record, I do know what the hell I'm doing ;-)

Posted by Scott M on Aug. 05, 2011 @ 12:00 pm

Not If You Support Cap And Trade You Don't

Come on man.

You support 'cap and trade', a proven dismal failure in Europe and a disastrous policy for California.

You are making short term assumptions about CCA without properly factoring in a well designed mix of renewables and efficiency amortized over a 20-30 year period and actually using transient near term federal law as an excuse for the numbers not working.

You believe that big for profit fossil utilities like PG&E want to get into the renewable energy business.

And you ludicrously claimed that CleanPowerSF won't create local jobs because the wind power component is outside of the city proper (across the Bay).

It is absolutely clear that you -think- you know what you are talking about.

It is also absolutely clear, that you do not.

Posted by Eric Brooks on Aug. 05, 2011 @ 1:06 pm

Cap and trade reduced NOx

Cap and trade reduced NOx pollution in the eastern US by 75% in ten years time. Cap and trade reduced SOx pollution by about 50% over 15 years. Phase 2 allowances in the EU ETS have consistently traded at $15 to $20 per allowances since the recession began in 2009. That's a non-trivial addition to the cost of running fossil-fueled power plants. Cap and trade or carbon tax -- doesn't matter much to me which you prefer -- as long as we make it more expensive to pollute. A pollution price greater than zero is better than no pollution price. Personally, I'm a greater fan of C&T with very limited use of offset because I prefer quantity certainty to price certainty. But if the CA legislature or Congress wanted to pass a meaningful carbon tax, I'd be pretty happy with that.

My skepticism about local jobs created by CCA is partly a function of the need to distinguish CCA activities from the baseline. The big 3 IOUs are already spending about $1 *billion* per year on efficiency and state policy already has created CSI, a feed-in tariff and a renewable auction mechanism for small-scale renewables. Job projections for CCAs need to show the incremental effect of the CCA's activities compared to the baseline. We made this point in the BEC report...

Posted by Scott M on Aug. 05, 2011 @ 1:41 pm

NOx & SOx Pollution Trading Not Transfereable To GHG Starategy

The NOx and SOx trading schemes were limited in scope to specifically targeting regional effects of those pollutants. CO2, Methane, NOx, etc as -greenhouse- gasses are completely different, planet wide in scope, and as complex as predicting weather in regard to crunching the requisite numbers for carbon trading, both in the atmosphere, and in the incredibly complex global capitalist economy. Carbon trading cannot work, and -has- not worked even in Europe where it has been attempted for several years. In fact it has actually made carbon emissions worse as corporations have inevitably figured out myriad ways to game the trading and offsets system.

The fact that you advocate such a disastrous approach in California, totally disqualifies you as any sort of leader on clean energy policy.

Posted by Eric Brooks on Aug. 05, 2011 @ 2:49 pm

Can you please cite some

Can you please cite some analysis that shows that C&T has made GHG emissions in Europe worse? I have not seen any analysis supporting that point of view.

Posted by Scott M on Aug. 05, 2011 @ 4:14 pm

Links On Carbon Trading Failures

Basic report:

http://climateandcapitalism.com/?p=4112

Carbon Trade Watch report, pdf:

http://www.corporateeurope.org/system/files/files/article/EU-ETS_briefin...

Carbon Trade Watch site for full detailed information:

http://carbontradewatch.org/

Posted by Eric Brooks on Aug. 05, 2011 @ 4:38 pm

Cheers, thanks for the links.

Cheers, thanks for the links. It is true that with the recession there has been overallocation, and I agree fully with the critiques of offsets related to industrial gases. They should never have been allowed. But I think those are problems the US and CA can avoid with the benefit of hindsight. Like I said previously though, I'd very happy with a *meaningful* carbon tax. Industry will lobby like crazy to have any proposed carbon tax reduced a minimal level so it will take tremendous political will to achieve a meaningful level of taxation. All right -- I'm out of here...

Posted by Scott M on Aug. 05, 2011 @ 4:58 pm

Why is putting a price on

Why is putting a price on climate pollution a disastrous policy for California? Putting a price on GHGs will help make renewable energy and energy efficiency that much more cost-competitive.

Posted by Scott M on Aug. 05, 2011 @ 1:49 pm

Price On Carbon Is Crucial - Trading Emissions Credit Disastrous

Taxing carbon is vital.

Putting carbon pollution (or reduction) on the market as tradeable commodities is what is failing dismally already in Europe and what should not be done here.

Tax - Yes. Trading - No.

Posted by Eric Brooks on Aug. 05, 2011 @ 2:55 pm

C&T and carbon taxing are

C&T and carbon taxing are functionally equivalent. I can talk at considerable length about the pros and cons of either approach. Feel free to contact me at the CPUC if you ever want to discuss...

Posted by Scott M on Aug. 05, 2011 @ 3:24 pm

Cap & Trade and Carbon Taxing Are Completely Different

Cap & Trade and Carbon Taxing Are Completely Different

and I am not going waste my time talking to a bureaucrat who doesn't grasp such simple realities.

I think we're done...

Posted by Eric Brooks on Aug. 05, 2011 @ 3:34 pm

Thanks for referring to me as

Thanks for referring to me as a bureaucrat. Much appreciated. The problem with carbon taxing is that you cannot be assured of the tons reduced for a given price. Is $20/tonne enough? Or does it need to be $100/tonne? No one knows for sure. You can run those prices through general equilibrium economic models, but you'll only have an educated guess. I studied pollution pricing in graduate school, I have a Master's in Public Policy from UC Berkeley and I am fairly confident that with my graduate training and 13 years of professional experience that I have a pretty deep understanding of envl economics. My offer to discuss renewable energy, CCA, and pollution/climate change control policy at any time still stands.

Posted by Scott M on Aug. 05, 2011 @ 4:08 pm

Academic Training Has Little Bearing On The Real World

Academic training rarely translates to real world efficacy. In fact, it is your academic training that is blinding you to obvious realities. It is your drawback, not your strength.

Taxes are pretty simple. If you don't like something, tax it.

If you tax it, and it continues, tax it more.

You don't need a slide rule or a trigonometric calculator to figure this stuff out.

Just a little common sense.

Honestly, there is nothing for us to talk about.

Your trying to convince me that cap and trade is good policy is a huge red flag that talking would be a waste of time.

Posted by Eric Brooks on Aug. 05, 2011 @ 4:18 pm

I have to disagree, I guess.

I have to disagree, I guess. I don't think discussions among advocates of renewable energy and climate change mitigation are ever a waste of time.

Posted by Scott M on Aug. 05, 2011 @ 4:32 pm

Sorry, my response to your

Sorry, my response to your last post was so narrow that it was illegible. Here it is again...

Thanks for referring to me as a bureaucrat. Much appreciated. The problem with carbon taxing is that you cannot be assured of the tons reduced for a given price. Is $20/ton enough? Or does it need to be $100/ton? No one knows for sure. You can run those prices through general equilibrium economic models, but you'll only have an educated guess. I studied pollution pricing in graduate school, I have a Master's in Public Policy from UC Berkeley and I am fairly confident that with my graduate training and 13 years of professional experience that I have a pretty deep understanding of envl economics. My offer to discuss renewable energy, CCA, and pollution/climate change control policy at any time still stands

Posted by Scott M on Aug. 05, 2011 @ 4:12 pm

Repeated: Academic Training Has Little Bearing On The Real World

(to read tight posts like that, just click reply at the bottom)

Academic training rarely translates to real world efficacy. In fact, it is your academic training that is blinding you to obvious realities. It is your drawback, not your strength.

Taxes are pretty simple. If you don't like something, tax it.

If you tax it, and it continues, tax it more.

You don't need a slide rule or a trigonometric calculator to figure this stuff out.

Just a little common sense.

Honestly, there is nothing for us to talk about.

Your trying to convince me that cap and trade is good policy is a huge red flag that talking would be a waste of time.

Posted by Eric Brooks on Aug. 05, 2011 @ 4:25 pm

You & I may be OK with

You & I may be OK with frequent adjustments to the carbon tax rate, but price certainty is one of the advantages of carbon taxes that other carbon tax advocates often cite. If policy-makers frequently have to adjust the rate to elicit the desired reductions, you forego that advantage of pollution taxes vs C&T.

Posted by Scott M on Aug. 05, 2011 @ 4:43 pm

Btw, it was an academic who

Btw, it was an academic who created the concept of pollution taxes -- Arthur Pigou. At least he's the one who's generally credited with the concept...

Posted by Scott M on Aug. 05, 2011 @ 4:47 pm

Little Bearing - Not None

As I said, little bearing. (Not none.) Academic training does not guarantee understanding, and often interferes with it.

For every Pigou, there is a Bill Gates.

Posted by Eric Brooks on Aug. 05, 2011 @ 5:02 pm

There are many points I could

There are many points I could make, but I'm going to stop. One final point: PG&E does not avoid renewable energy like the plague. PG&E has a large financial stake in both SunRun and Solar City, two of the largest small-scale solar energy developers in CA. Sempra, the parent company of SDG&E and SoCalGas, has become a major player in developing larger solar PV installations and has several contracts either already approved with PG&E or in the pipeline.

Posted by Scott M on Aug. 05, 2011 @ 9:38 am

Sham Investing In Some Renewables, Is Not Large Scale Adoption

Essentially wrong. The companies you are talking about still have a vast majority of their business model wrapped up in fossil fuel specifically because of the hoarding factor that I mention before.

PG&E and others have invested somewhat is solar installers, but have not themselves raised their -own- renewables portfolio much at all.

PG&E in particular is egregious in this regard, having only about 15% renewables when state law requires it to have 20% as of -last- year.

Furthermore PG&E's investments have served to block companies like Solar City aggressively moving for localized solar networks for the obvious reason that if they do so, PG&E's money goes away. That, is why PG&E is investing in solar installers - to co-opt them and keep them under control.

As a result, the big solar installers almost -never- support Community Choice, simply because they are trying not to piss off PG&E.

Finally the solar projects that you are referring to which other for profit energy corporations are actually investing in, in a -real- way, are almost all large solar arrays in distant locations. That kind of solar fits with the hoard and sell model that I described before.

What it does -not- do is foster local community owned, and community run renewables and efficiency networks which will make cities and counties independent from those for profit corporations.

Posted by Eric Brooks on Aug. 05, 2011 @ 10:07 am

PG&E makes most of its profit

PG&E makes most of its profit from its return on equity invested in transmission and distribution infrastructure. PG&E does not make money by selling electricity per se. Most of the electricity it sells is produced by merchant generators and that energy is sold to PG&E's customers with no mark up for PG&E. This decoupling ratemaking is complicated but I attempted to explain it briefly in the BEC report. If a community wants to be truly independent of PG&E it really must condemn the distribution infrastructure and municipalize.

The best solar resources are in SE California, Nevada and Arizona. That's just reality. There is no reason that POUs and CCAs can't also invest in distant renewable resources if they choose to take advantage of those high-quality resources. In other words, just because production is more centralized (or even ground mounted in smaller clusters of 10 to 20 MW) doesn't mean that it has to be "hoarded" by evil corporations.

Posted by Scott M on Aug. 05, 2011 @ 10:32 am

PG&E's Business Model IS A Hoard And Sell Model

PG&E doesn't have to be the generator of the electricity to make profit from the fossil fuel hoard-and-sell model. As long as energy is produced in large singular locations, PG&E's monopoly ownership of the transmission lines themselves allows -it- to be in control of the energy spigot and charge some of the highest rates in the country for electricity. (Furthermore, PG&E -is- getting back into the fossil fuel generation business. It is building new gas plants, and seeking to import liquid natural gas into California, to feed those plants. See http://pacificenvironment.org/article.php?id=3029 )

As soon as we build intricate, citywide localized renewable and efficiency networks, we break PG&E's ability bottleneck energy over its large power transmission lines.

And such networks raise the obvious possibility of installing -local- distribution networks to circumvent even PG&E's local transmission and distribution system, thereby completely cutting PG&E, and its price gauging, out of the system.

That is crux of what all of this is about, and is why PG&E just spent 50 million dollars on a thankfully failed ballot measure that would have stopped us from building these networks.

Now, if we can just get bureaucrats like yourself, to -also- get out of our way, we might actually be able to build those networks.

Posted by Eric Brooks on Aug. 05, 2011 @ 11:01 am

Eric, the idea that we'll save 200 million

would probably fly if voters believed that it would all be returned to energy users and customers.

But the fear, and the stated intent in what I've read of SFBG's prior support for public power, is that the "savings" from not having to make a profit will not in fact accrue to the people. But rather will get added into the General Fund to finance a variety of "projects".

I might vote for public power if it made my energy cheaper without affecting service and reliability. I'm not going to vote for it just to pump up the public purse. The City run Muni and what good does that do any of us? It's expensive, unclean, unreliable, uncomfortable and at times downright dangerous.

Why would I trust the same people with my power supply?

Posted by Harry on Aug. 05, 2011 @ 11:24 am

Right Now PG&E Gets The -Entire- $200 Million & We Get Nothing

Think about what you are saying. Currently, we have -zero- chance to get -any- of that money, because it all goes to PG&E profits. With a community owned power network, ratepayers actually get a shot at some of that money.

And what if it -did- all end up in general fund? Is it not better to have it there, where it will actually do things for us locally, rather than sent off to sit in PG&E's bank account where it does -nothing- for us at all?

Come on man. You argument is ludicrous.

Posted by Eric Brooks on Aug. 05, 2011 @ 12:00 pm

Source? Can you support this claim, Harry?

"what I've read of SFBG's prior support for public power, is that the "savings" from not having to make a profit will not in fact accrue to the people."
Posted by Harry on Aug. 05, 2011 @ 11:24 am

Posted by Guest on Aug. 05, 2011 @ 12:49 pm

SFBG have never hidden their glee about

getting all those revenues in the public purse. That's why I have always voted against public power.

I challenge anyone in SFBG here to publicly come out and state that they only support public power if all profits are returned to the consumer.

I won't hold my breath.

Posted by Harry on Aug. 05, 2011 @ 1:34 pm

Translation "No"

Translation of above post:

No, Harry can't back up his claim, because it is false. Instead he launched a non sequitur empty attack.

Posted by Eric Brooks on Aug. 05, 2011 @ 3:47 pm