Rethinking Our Town’s Energy Future

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smart-gridsBy Mark Braly, Gerald Braun, Richard Bourne, William Knox, Alan Pryor and Eugene Wilson

We have been thinking about a different energy future for Davis.

Imagine:

* Almost every dollar Davis residents and businesses spend on electrical energy stays in Davis.

* All of the community’s electrical power is provided by local sources — mostly photovoltaic panels covering unshaded rooftops, parking lots and some vacant lots. Renters and homeowners without suitable roof space can buy into solar gardens in and around the city and get credit on their utility bills.

Actually, there is a surplus of solar power because people see this as a smart investment. The surplus can be sold to the grid, with an attractive return.

* The city’s state-of-the-art power grid is self-contained. Batteries, including those in electric cars, can be used to store surplus energy from solar or wind to meet demand peaks, such as those caused by air-conditioning in the summer.

* There is a boom in the sale of electric and plug-hybrid cars as cheap solar electricity reduces the cost of driving and car batteries provide back-up for rare power failures.

* Batteries also provide storage by converting solar or wind energy into hydrogen, which then generates power at peak times. Likewise, bio-digesters could convert waste to fuel that could be used for space and water heating and to generate electricity using fuel cells.

* Geothermal energy becomes practical for homes, apartments and commercial buildings. Why? Because locally developed technology has slashed the cost of drilling wells for ground-source heat pumps. Waste becomes an asset, not a liability, used as fuel in gasification units developed at UC Davis.

* Like Sacramento, Davis is harvesting wind energy from strong delta winds.

* The electric utility is financing deep retrofits of existing homes with the latest technologies for minimizing energy use and greenhouse gas emissions. New and existing businesses find new customers for renewable energy and efficiency, because there is abundant cheap financing (such as PACE, Property Assessed Clean Energy) and “crowd funding” of new energy assets, like solar gardens, by local energy users.

This future depends on many things, among them 1) continued rapid growth and maturation of solar, electric vehicle and building energy management industries; 2) abundant and favorable financing for renewable energy and retrofit projects; and 3) local energy services designed with local energy usage profiles and local energy resource development opportunities in mind.

It also depends on an electric utility that is prepared to accept and nurture that future. Do we have that now?

Pacific Gas & Electric Co. provides some of what we need: rebates for renewable and efficient energy, accessible information on energy use, smart meters and purchase of surplus renewable energy (mostly solar ) at low prices. The state, acting through its Public Utilities Commission, has required it. But much of this is under attack and could change.

PG&E is, after all, a private company owned by its shareholders. It must provide a return on its investment. As a state-regulated utility, PG&E is allowed rates high enough to cover all of its costs plus a return on investment that is currently about 10 percent. Like other regulated investor-owned utilities, PG&E is allowed a return on investment based in part on its generating capacity and distribution infrastructure. The more investment in big, centralized power plants and transmission lines, the higher the return.

Although the California Public Utilities Commission counts energy conservation in its calculations of allowed return, success in reducing use of the company’s product does little for its bottom line. The “distributed power” energy future that is good for Davis is threatening to the current investor-owned utilities.

A new state law, SB 43, authored by Sen. Lois Wolk, D-Davis, could provide a boost for Davis’ new energy future. It requires 600 megawatts (MW) of solar gardens throughout the state, and sets aside 20 MW for Davis. The city of Davis would like to own and operate the 20 MW and fund it by selling shares to local ratepayers and other investors. It would like to provide utility bill credits to local investors that would represent a fair return on the investment.

innovation-park

But PG&E has its own plan: It would own the solar gardens; it would charge customers a higher rate for buying into the project; it would give a bill credit not big enough to make up for the increase; and it would give no guarantee that the solar gardens would be built in or near Davis. The final decision is in the hands of the CPUC, where the city is a party to the proceeding.

PG&E and almost all other investor-owned utilities are working from a business plan that is more than a century old, dating back to Thomas Edison. The industry is resisting the need to come up with a business model that works with the new world of climate change and emerging clean, low-cost clean energy technology.

But, the fundamentals of the industry are being questioned. Must we continue to rely exclusively on huge remote power-generating stations that require long, leaky transmission lines that are difficult to permit? Even when these big facilities deliver solar or wind energy, they are environmentally controversial and hard to sell to regulators and the public.

These issues will take a long time to resolve. In the meantime, public power provided by locally owned utilities accounts for about 25 percent of California’s electric power, generally at lower rates that those of private utilities. Some, like the Sacramento Municipal Utility District, are innovative and advanced in their planning for a grid that accommodates renewable energy and efficiency and distributed, local sources of power.

The city of Davis has revived its interest in a municipal electric utility and has authorized a thorough study by local and outside experts to determine whether 1) rates can be reduced, 2) energy can be cleaner, 3) power can be more reliable and 4) whether the city can realize significant economic benefits.

Until all the facts are on the table, Davisites should keep an open mind for the facts and a closed mind to speculation and disinformation.

— Mark Braly, Gerald Braun, Richard Bourne, William Knox, Alan Pryor and Eugene Wilson are members of the Coalition for Local Power.

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Disclaimer: the views expressed by guest writers are strictly those of the author and may not reflect the views of the Vanguard, its editor, or its editorial board.

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3 thoughts on “Rethinking Our Town’s Energy Future”

  1. DavisBurns

    I thought this might be of interest since Palo Alto is a city about our size and has its own utility

    The City of Palo Alto is located in the heart of Silicon Valley in California’s Bay Area. Approximately 35 miles south of San Francisco and 13 miles north of San Jose, the city has a population of about 63,000 people. Palo Alto owns its utilities, so the local government can choose how to run them in the best interest of local citizens. In July 2013, the City Council voted to make the city’s electricity supply 100% renewable as part of the city’s commitment to carbon neutrality.

    As a precursor to this decision, the local Department of Utilities first offered a 100% renewable electricity plan. In 2011, more than 20% (more than 6000) of their customers were enrolled. To supply the program, the utility purchased Renewable Energy Certificates – or RECs. RECs are symbolic credits that represent producing 1 MW of renewable electricity. Utilities purchase RECs as evidence of compliance with the California Renewable Portfolio Standard program, which mandates that 33% of utility power come from renewables by 2020. Historically, Palo Alto’s RECs came primarily from wind projects in the Pacific Northwest along the same regional power grid as Palo Alto. The program also drew electricity from 4 solar PV projects within city limits that are owned and were funded by the City.

    To enroll in the 100% renewable plan, customers agreed to pay a slightly higher electricity rate. In return, the average household that enrolled avoided about 9500 lbs. of CO2 emissions annually, roughly the equivalent of not driving a car for 10 months. Those enrolled were mostly residential customers (95%), with commercial customers making up the rest of the mix. Those who signed up were motivated by a desire to do the right thing and provide role modeling for the next generation.

    In 2013, the 100% renewable power option was to be entirely supplied by solar RECs. Also in 2013, Palo Alto adopted a carbon neutral plan for the electric supply, so that all the supplies would be carbon neutral going forward. The city’s utility plans to achieve this with long-term renewable contracts and hydro supplies starting in 2017 and, until then, they would buy RECs to be 100% renewable and carbon free.

    On July 22, 2013, the City Council voted to make the city’s electricity supply 100% renewable effective immediately. The plan is for this to come from 50% hydropower, with the remainder coming from electricity purchased by the city, which is generated by wind farms, solar arrays, and renewable gas captured from landfills. If all Palo Alto’s electric needs cannot be supplied directly by these renewable sources, the city utilities will buy RECs to offset the non-renewable power it uses.

    The average cost to customers of the City opting for 100% renewable electricity is less than $3 per year, a nominal sum for such a significant reward.

  2. jimt

    Hopefully articles like this will help to provoke a lot of discussion about renewables.
    Good info. also from DavisBurns; though it seems most of the renewables Palo Alto uses are not generated within Palo Alto, but are purchased from other sources; stilll worthwhile to consider.

    Some of the technical ideas suggested above are competiitive with conventional power sources; some are still substantially more expensive. I’d like to see incentives at the state level (national too) consisting largely of more tax incentives for utilities and customers to use renewables; including deductions and even tax credits for some things, and low interest-rate loans; financed by taxes on fossil fuels. Eventually as the technologies mature the tax incentives won’t be needed anymore; I think we’re there already for wind power and photovoltaics in many places.

    Speaking of sustainability, I’d like to see someone address the issue of population growth at all levels; local, state, and national. At current rates of population growth; it will be an enormous effort and very ambitious goal to grow renewables to power up the new customers due to population growth (and thus keep fossil fuel use at a steady level over time); energy sustainability is not likely feasable without population numbers stabilizing. This is the elephant in the living room that no politico will touch; just because it isn’t talked about doesn’t mean that effects of population pressures won’t have an enormous effect (that will likely be attributed to other causes) on the liives of your children and grandchildren–easy to see with California real-estate as more & more people are competing for a piece of the same unvarying acreage.

  3. Nancy Price

    Are the proponents of the Davis energy project considering a municipal “feed-in-tariff” sufficient to help off-set the cost of rooftop solar installation such as a few other cities in the US and Canada have created, but which has led to the boom in solar energy and energy independence in Germany, for example?

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