Just as Alameda County was launching a new, publicly owned electricity service offering greener electricity at lower prices than PG&E, state regulators put a big new obstacle in its path. A little-noticed decision in October by the California Public Utilities Commission will raise the monthly “exit fee” that customers of East Bay Community Energy and other “community choice” programs have to pay to utility companies like PG&E.
The fee is intended to compensate the companies for “unavoidable expenses” they incurred to procure electricity for customers who now buy their electricity from community choice agencies. But environmentalists say the higher exit fees threaten the viability of community choice agencies like East Bay Community Energy, which offers renewable energy sources to residents and businesses in Oakland, Berkeley, and nearby cities.
CPUC commissioner Carla Peterman, who proposed the plan, said the changes “insure a more level playing field between customers,” so those who stay with traditional utilities “don’t get stuck paying back the costs for power that was bought for customers who now are served by community choice.”
But advocates of community choice call the new formula unfair and dangerous. According to a letter from 120 public officials — including the mayors of Oakland, Berkeley, Richmond, Albany, San Francisco, and San Jose, along with many members of Bay Area city councils and county boards of supervisors — it “would significantly and unfairly increase exit fees charged by big corporate utilities and threaten current and future community choice energy programs — the very programs that are helping the state exceed its emissions-reduction targets.”
Four Bay Area community choice agencies — MCE, Sonoma Clean Power, Peninsula Clean Energy, and CleanPower SF — have joined several statewide advocacy organizations in petitioning the CPUC to reconsider its decision. A spokesperson for the CPUC said it will “consider the applications and make a determination.”
The CPUC argues that raising the fee — technically called the “power charge indifference adjustment,” or PCIA — would mean only a small increase in customers’ bills. But according to the public officials’ statement, that small increase could “significantly jeopardize [community choice programs’] ability to invest in long-term renewable resources and customer programs.”
Nick Chaset, CEO of East Bay Community Energy, told the Express that EBCE is “very disappointed” with the CPUC’s decision. “We feel like they did not provide enough analysis to justify their plan and very little analysis of the impacts of the wholesale changes they made.” He also said that the commission has not yet set the PCIA rate for 2019, so “we don’t know what we’re on the hook for.”
The new PCIA will lower electricity bills for customers of utility companies and raise fees charged to community choice customers. This threatens the whole business model of EBCE, which pegs its rates at 1.5 percent lower than PG&E. “We remain committed to delivering lower-cost green energy,” Chaset said, although “we may have to narrow our discount.”
The higher exit fees will leave EBCE will leave with less money for operating expenses and community programs. “Nothing has been decided yet” about how to meet this challenge, Chaset said, but “we will be looking at cost-cutting measures.”
Environmentalists say programs in other parts of the state are already changing their plans due to the PCIA hike. San Luis Obispo residents abandoned a plan to create their own community choice agency and decided instead to join Monterey Bay Community Power. That agency, in turn, suspended its plans to build local renewable energy. Several other community choice programs are planning to raise rates.
Community choice programs are making a big dent in the traditional utilities’ customer base. Peterman estimated that nearly half of the customers in PG&E’s area will be served by community choice agencies in 2019. Statewide, 19 community choice agencies now serve about 8 million customers in 160 communities.
CPUC commissioners say they support community choice and recognize its value in reducing California’s use of fossil fuel. But community choice advocates like Al Weinrub of the Local Clean Energy Alliance suspect that by adopting the new formula, “CPUC is doing the dirty work for the monopoly utilities in trying to wipe out community choice.”
Weinrub points to previous efforts by PG&E and other utility companies to hamper community choice. They bankrolled a June 2010 ballot measure that would have required a two-thirds supermajority to create a community choice program. That measure, which failed, received $46.5 million in donations, the vast majority from PG&E.
Although it’s against the law for utility companies to interfere with community choice, Weinrub said, “They interfered all over the place,” prompting the legislature in 2011 to pass SB 790, a law establishing a “code of conduct” for utilities in dealing with community choice.
Arguments over the formula for calculating the PCIA are extremely technical, but emotions run high. In an October meeting, Peterman accused community choice advocates of making “misleading and often outright false statements.” After the meeting, Weinrub characterized Peterman’s remarks as “Orwellian double-talk.”
Some of the argument is about what counts as an “unavoidable expense” that the utility companies incurred to procure electricity for customers who then departed. CPUC commissioners said the old formula failed to include some legitimate expenses, such as needed ongoing investments in generating facilities that the utilities own. The new rule replaces the previous use of “benchmarks” to estimate costs with records of actual costs. And the new formula allows the PCIA to increase over time.
Critics charge that the new formula lets utility companies make any investment or spending decisions they want with no accountability on the basis of information that’s not available to the public. They say the utilities have paid inflated prices and made investments that were unwise because they already knew customers would be leaving for community choice programs.
The formula adopted by the CPUC “reward[s] big corporate utilities for mismanaging their energy portfolios,” says the letter from public officials. Weinrub speculates that the utility companies might even deliberately sell their extra electricity at low rates, so they could raise the PCIA.
Allowing the PCIA to keep rising, critics say, also creates uncertainty that makes it impossible for community choice agencies to figure out how to set their own rates.
Regardless of the technical details of the formula, Weinrub concluded, “The whole issue is political, representing different interests, and has to be decided on that basis. How to determine PCIA fees is all arbitrary, and the question is whether you’re going to be arbitrary on the side of our communities or arbitrary on the side of the monopoly utilities.”
By the end of this year, most homes and businesses in Alameda County will be buying electricity, not from PG&E, but from the newly formed East Bay Community Energy (EBCE). This public “community choice aggregation” program, like those now operating in other Bay Area counties, was created to provide electricity at lower cost and with fewer greenhouse-gas emissions than the traditional investor-owned utility. (EBCE will buy electricity from suppliers and sell it to customers, while PG&E will continue to own the wires — “the grid” — and handle billing, as well as problems like outages.)
But EBCE is a new kind of community choice program, according to the unprecedented coalition of labor and community organizers whose years of advocacy helped to shape it. “The centerpiece of what makes EBCE different is the ability of the community to benefit from the development of renewable energy,” explained Al Weinrub, executive director of the nonprofit Local Clean Energy Alliance.
Last month, EBCE released a plan for making that happen. The draft “local development business plan” details strategies for creating local jobs, providing pathways to good jobs for disadvantaged workers, providing the benefits of clean energy to people at all income levels, and reducing pollution in communities where it’s worst.
Initially, EBCE will not have the capital for big investments. But it can immediately start working toward those goals by using its power as a purchaser of electricity. For example, EBCE proposes to pay higher rates for locally produced electricity and to give preference to union contractors, especially those with links to training programs for disadvantaged workers. It might also serve as a “developer” to help customers join together to create large solar-energy projects, thereby lowering installation costs through economies of scale.
The East Bay Clean Power Alliance, a coalition of community organizations that has been leading the campaign for local development, says the draft plan includes a lot of great ideas, but faults it for failing to set priorities or standards for evaluating programs. And Dave Thoni, former president of the International Brotherhood of Electrical Workers Local 595, said, “significantly more needs to happen” to create jobs for local workers.
One of EBCE’s first projects will be helping cities put together big contracts to install rooftop solar panels on many municipal buildings. The same model could be used to combine residential rooftop solar projects in a neighborhood. EBCE will help by organizing these collaborative projects, streamlining permitting and administrative costs, and creating a revolving loan fund. In addition to lowering costs, the goal is to make projects large enough to be done with a union contract, so solar installers can earn more than many currently do. This creates the potential to overcome the chronic conflict between environmental groups and unions about local solar energy. In the past, some unions have opposed plans for rooftop solar because the workers who install the panels are often poorly paid.
Because community involvement was central to the development of the plan, said EBCE CEO Nick Chaset, it reflects community priorities such as “equitable access to things like rooftop solar.” Electricity companies now pay a standard rate to customers with solar panels for extra electricity they sell back to the system. The plan calls for giving low-income customers a higher rate — an “adder” — for the electricity they sell, to make up for some of the cost of installing solar panels.
The plan also calls for a pilot program of “community shared solar” in order to “bring the benefits of solar to people who aren’t homeowners or couldn’t afford to do solar on their own,” said Megan O’Neil of the East Bay Shared Solar Collaborative. Those households will be able to join a project to build solar panels on a central location in the community — say, the roof of a church or public building — and then share the savings.
And the plan calls for a Community Investment Fund to provide grants for innovative energy projects by community groups.
EBCE is already starting to enroll commercial customers. Residential customers will come online in November, unless they “opt out” to stay with PG&E. Bills will immediately go down, unless the customer chooses to pay more for electricity that’s even greener.
For most customers, EBCE’s default rate is set at 1.5 percent below PG&E’s rate, and will include more electricity from renewable sources. Or customers can decide to keep paying the same rate as PG&E so they can get electricity that’s 100 percent “carbon-free.” However, that includes power from large hydroelectric projects, which the state does not count as renewable because of the environmental destruction and greenhouse-gas impact of building and operating big dams. So, after a push by environmental groups, EBCE added a third, higher-priced choice that’s all from “renewable” sources such as wind and solar.
In any case, the initial savings on electric bills will be modest, said Barbara Stebbins, a volunteer with the Local Clean Energy Alliance. Larger savings will come to those who take advantage of EBCE’s programs to help retrofit buildings to be more energy-efficient.
In addition, EBCE plans to lower the cost of electricity for the whole community by tackling the problem of peak demand. Electricity use varies a lot by time of day and time of year. Solar panels produce energy during the day, while more electricity is used in the evening. All these timing problems mean electricity providers end up meeting peak demand by buying electricity on the short-term market, when it’s most expensive and carbon-intensive.
The EBCE plan includes several strategies for solving this problem: Customers with solar panels who install batteries will also get an “adder” on the rate they receive for selling electricity back to the system. They also may be able to gradually pay off the cost of the battery as a small extra charge on their property tax or electricity bill. Customers who install batteries won’t have to draw extra electricity from the system at night or when they turn up their air conditioner.
Beyond that, EBCE is looking to develop a “virtual power plant”: Customers will get financial incentives to use less electricity during times of high demand, and to allow the system to draw electricity from their batteries when it needs additional power.
Despite the shared excitement about these innovative strategies, some renewable energy advocates say EBCE isn’t doing enough to promote local solar- and wind-energy projects. Thoni of the IBEW pointed out that the agency’s proposed 2018-19 budget allocates just $2 million for local development and includes no specifics about which projects the money will fund.
EBCE’s first request for bids from electricity producers demonstrates how it’s using its purchasing power to promote community priorities: It says EBCE will give preference to suppliers that develop new renewable energy capacity, have union contracts, hire Alameda County residents, and work with job-training programs for disadvantaged workers. But Thoni pointed out that the request for bids includes a goal of developing just 20 megawatts of renewable energy generation capacity in Alameda County, which would supply less than 1 percent of the amount of electricity needed.
Chaset struck a cautious note in discussing local energy generation. “We expect to be able to buy large-scale solar [from elsewhere] in California for very, very competitive rates,” he said. “We can have more impact if we use large cheap solar than expensive rooftop solar.”
Thoni responded that consolidating rooftop solar into large local projects can provide economies of scale that bring down the cost to be comparable with utility-scale solar, as has been done in Germany. And when Alameda County buys electricity from corporations with huge solar arrays in the desert, many of them fossil fuel companies like Mobil and Exxon, “every penny goes out of the county,” he said. EBCE’s mandate is not just to develop local jobs, but to further what Thoni says his union is already doing — providing pathways to good jobs for disadvantaged workers.
In its comment on the local development plan, the East Bay Clean Power Alliance praised many parts of the proposal but pointed to some “important enhancements needed.” It says the plan’s list of key strategies should highlight those aimed at “increasing equity and … social justice.” These include “adders” (higher rates paid for electricity) to promote community benefits, partnership with customers (like the “virtual power plant” deals), and measures to protect the most vulnerable communities.
In addition, the coalition calls for quantifiable standards for measuring the success of the plan, such as local hires, projects in disadvantaged communities, project ownership by low-income people, hires from communities of color, and progressive electricity rate structures.
The coalition that pushed for the local development plan — including the Local Clean Energy Alliance, the Sierra Club, the International Brotherhood of Electrical Workers, the California Nurses Association, and others — intends to continue the advocacy that has helped shape EBCE.
Utility companies, meanwhile, are not sitting idly by while solar panels and community choice systems take away their customers. They’ve proposed a stream of legislation and regulations that would hamper the development of community choice programs. Other proposals seek to limit or eliminate payments to customers with solar panels for selling extra energy back to the system.
A state law bars utility companies from lobbying against community choice, but the IBEW local that represents PG&E workers has served as a stand-in for the company. And the utilities have recently asked the California Public Utilities Commission to lift that ban. Recently, the CPUC adopted a rule that forces new community choice agencies to wait longer before coming online, making it trickier to finance new programs.
But meanwhile, said Chaset, community choice programs like EBCE are starting to provide “an opportunity for customers and communities to have a say in how much their energy costs and where it comes from.”
The EBCE board is taking comments on the local development business plan and is expected to vote on it at its July 18 meeting.
A chilly wind gusts off the lower Sacramento-San Joaquin River Delta, flowing over a landscape that modulates awkwardly between middle-class suburbia, scattered acres of tall grasses, and imposing industrial lots of warehouses and train tracks. This shoreline region, just north of the East Bay cities of Pittsburg and Antioch, is home to a Dow Chemical facility, a sheet metal factory, a recycling center, several yacht clubs, and a wastewater treatment plant.
The neighborhood is also a hub of natural-gas-fueled power generation. Over a distance of just six miles, the smokestacks of four gas-fired power plants spew climate-changing carbon dioxide into the atmosphere while generating some 4,000 megawatts of electricity. Two of the plants went online just five years ago, and another in 2009. Yet another, the Delta Energy Center in Pittsburg — the Bay Area’s largest power plant — reopened in February after it closed last year following an explosion.
The recent statewide surge in natural-gas-power production has come at a time when California is supposed to be phasing out fossil fuels and has adopted landmark legislation laws and regulations designed to radically reduce greenhouse-gas emissions. The new power plants, as a result, have angered community leaders, environmentalists, and clean energy advocates who say the facilities are producing energy we don’t need. “California, with its aggressive greenhouse gas reduction mandates, needs to be moving away from fossil fuel power plants, not building more,” said Jonathan Evans, an Oakland-based senior attorney with the conservation group Center for Biological Diversity.
California is known as a global climate leader in large part because it has set formal goals to reduce its carbon emissions to 50 percent below 1990 levels by 2040. The state also aims to produce 50 percent of its electricity from renewable sources by 2030 — a milestone that California is more than halfway toward reaching. Getting there, Evans said, “is only possible by replacing fossil fuel energy with renewables,” especially solar power, the fastest-growing renewable sector.
Growing in tandem with solar is battery-storage technology. It allows electricity produced by turbines when the wind blows and by solar panels when the sun shines to be used after the sun sets or the wind dies. Storage is critical to taking renewable energy mainstream.
And because of advances in battery-storage systems and a reduction in the costs of solar production, California should be moving rapidly to completely abandon fossil fuels, said Evan Gillespie, director of the Sierra Club’s Beyond Coal Campaign. “It’s very possible to get to 100-percent renewable energy,” he said. “And we have the technology to get there today.”
But power companies continue to wield considerable influence in the state. They have successfully thwarted efforts to convert quickly to 100-percent renewable and have pushed instead for more gas-fired plants. And the overseers of the state’s energy supplies — the California Public Utilities Commission and the California Energy Commission — have complied, approving two large fossil-fuel projects in Southern California in 2017 and another in 2015.
And these plants, which cost hundreds of millions of dollars to build, have contributed to an unneeded glut of energy, which Californians are subsidizing through some of the highest electricity bills in the country, consumer advocates note.
“California ratepayers are going to be stuck for decades with a huge bill that I think will negatively impact California’s economy — all for power we don’t need,” said Loretta Lynch, former president of the California Public Utilities Commission and now a vocal critic of what she considers to be a corrupt relationship between power companies and the state officials who are supposed to regulate them.
But Robert Weisenmiller, chair of the California Energy Commission, which oversees environmental reviews of power plants, contends that conventional power plants are still necessary because they help provide reliability that renewable sources alone often can’t deliver. “The intermittent nature of solar and wind requires more nimble generation, which currently comes from natural gas-fired power plants,” he wrote in an email to the Express.
But the fossil-fuel industry hasn’t only pushed for more power plants. It has directly opposed or obstructed the development of renewable energy, especially rooftop solar systems. Because residential and business solar production means cash losses for utilities, industry representatives have aggressively lobbied both lawmakers and appointed officials to adjust regulations or otherwise take action to stifle the growth of solar and wind projects. In response, some states have actually abandoned programs that support private solar production.
Renewable energy advocates, however, have been fighting back, and many express hope that the fossil-fuel power’s days are numbered. Currently, about 4 million Californians receive electricity from localized, independent providers called community choice agencies that focus heavily on renewable energy sources. In Alameda County, East Bay Community Energy is launching in June, and right off the bat, will be serving 600,000 new accounts, according to the agency’s CEO Nick Chaset. “We’re part of a developing system that aims to take back the grid now controlled by investor-owned utilities,” Chaset said.
In addition, state regulators earlier this year approved a plan designed to wean the state’s major utilities — including PG&E — off of fossil fuels in the years ahead and to invest more in renewables and battery storage.
Lynch believes solar power will be a dominant source of electricity in the future, but she says energy regulators and the industries they serve won’t make it easy. “The question is just how many bumps in the road will be placed in our way before we finally get there,” she said. “How much money will we waste as a society before the state gets serious about renewables?”
Photo by Sam Zide
Jonathan Evans of Center for Biological Diversity said, “California should be moving away from fossil fuel power plants, not building more.”
Fourteen years ago, Loretta Lynch and her husband, while remodeling their San Francisco home, placed several solar panels on the roof. She said that in 2004, experts said it would take 15 years for the system to pay for itself. “It took less than eight,” she said.
Lynch is among hundreds of thousands of Californians, many of them frustrated by high utility bills, who now generate their own electricity using rooftop solar panels. At least one of these people — Bill Powers, an energy consultant in San Diego — has installed batteries in his garage, allowing him to completely sever his ties with San Diego Gas & Electric, the local equivalent of our PG&E.
“I went off-grid to demonstrate that one customer … could compete effectively against the investor-owned utilities on price and reliability,” Powers said.
Indeed, as the costs of solar systems and battery sets have declined, the potential for rooftop panels plus batteries to upend the utility-dominated energy service industry has soared. In 2016, the National Renewable Energy Laboratory calculated that rooftop solar panels had the potential to generate as much as 40 percent of the country’s electricity needs.
But investor-owned utilities have been scrambling to block this revolution. Throughout the nation, they have lobbied lawmakers to stifle the development of residential solar — and they’ve had success. Since 2013, Hawaii, Nevada, Arizona, Maine, and Indiana all phased out net metering — a program that allows homeowners to sell excess solar energy back to the grid — though Nevada recently reversed its decision.
Utilities have also created rate structures that undermine the incentive for homeowners to capture and make use of the sun’s energy. In February, six public watchdog and conservation groups went to court after Salt River Project, an Arizona power-utility company, increased electricity rates by more than 50 percent for customers who had installed rooftop panels. The lawsuit, now being heard by the U.S. Supreme Court, argued that the action violated anti-trust laws while brazenly ignoring consumer rights and the immediate threat of climate change.
Lynch, who was president of the California PUC from 2000 to 2002 and a commissioner until 2005, said she saw up close a system fraught with “cronyism and backdoor deals” that has led to a glut of energy and a heavy financial burden on the public. According to state records, the Public Utilities Commission and the California Energy Commission have greenlighted nearly 12,000 megawatts’ worth of new gas-fired power plants since the beginning of 2010, though only about half of the approved facilities have been built or are under construction.
State regulators approved almost 4,000 megawatts’ worth of fossil-fuel plants in 2013, while greenlighting only 2,300 megawatts of renewable production. In 2017, regulators approved two large gas-fired facilities in Los Angeles and Orange counties that will eventually be producing about 2,000 megawatts of new power.
Lynch noted that the wattage approved in recent years is roughly equivalent to the excess supply of electricity that California must either sell to other states or literally run into the ground. Many power plants — including the Marsh Landing Generating Station in Antioch and the Russell Energy Center in Hayward — only run sporadically to meet daily or seasonal spikes in demand. Some are being throttled back in productivity just a few years after they began operating, simply because they aren’t needed.
This overproduction of fossil-fuel power has been made possible by some recent amendments to law and policy that Lynch says were essentially favors from the PUC to investor-owned utilities. She said that, several years ago, the PUC, which determines if there is sufficient need to justify a new project, “monkeyed around with the state’s definition” of the words “need” and “reserve.” These are key regulatory terms that ultimately dictate how much surplus electricity the state produces and buys.
The PUC recently did something else that allowed the state to generate more power from fossil fuels than necessary. The commission raised the standard of grid reliability far above what federal regulators demand. The Federal Energy Regulatory Commission calls for a state’s electric grid to have enough power that, if the largest transmission line is temporarily out, it can still keep the lights on. But California PUC arbitrarily doubled the federal standard. In 2014, commissioners decided that California needed enough power production to meet demand even if two major transmission lines went out.
“They’re planning for a sort of event that has never happened by imposing unheard-of standards of reliability,” said Powers, in San Diego, who has been a vocal critic of the state’s energy regulators. “It’s that change that allowed [the Los Angeles and Orange County] plants to be built.”
Liza Tucker, a consumer advocate with the group Consumer Watchdog, said the recent approvals of large power plants were to be expected. She has closely studied ties between state leaders and industries, and she contends their relationship has long been too cozy. “They go to the PUC and make the case that these plants are needed, and the commission approves them,” Tucker said.
Photo by Sam Zide
Nick Chaset, CEO of East Bay Community Energy, said, “Regulators shouldn’t be afraid of new technologies, but they do need to be prudent.”
A spokesperson for the California Public Utilities Commission said the commissioners were unavailable to comment and deferred questions to the California Energy Commission.
PG&E officials did not respond to multiple requests for an interview.
Powers and other consumer advocates maintain the system of applying for permits to build new power plants is arranged strategically to favor the industry. “The customers cover every cost of the projects, so the developers are basically bulletproof — there’s no risk.”
Publicly owned community choice agencies allow cities within utility-served regions to provide electricity, largely from clean sources, to customers often at a lower price than the fossil-fuel electricity offered by conventional services. Local CCAs include CleanPower SF, Marin Clean Power, and Sonoma Clean Power. These agencies still use PG&E transmission lines, but they provide customers with anywhere from 40-percent to 100-percent renewable electricity.
“We want to disrupt the utilities’ 100-year monopoly over the state’s energy system,” said Woody Hastings, co-founder of Sonoma Clean Power and the renewable energy manager for the Center for Climate Protection, based in Santa Rosa. “We’re evolving toward a decentralized system, and the utilities don’t like that, and they’ve been fighting against us tooth and nail.”
In 2010, PG&E pumped $50 million into Proposition 16, which sought to create a competitive advantage for investor-owned utilities by requiring that proposed community choice agencies be approved first with a two-thirds public vote. Voters rejected Prop 16, and community choice agencies are still created today through majority votes of city councils or boards of supervisors.
“It would have essentially destroyed community choice, because two-thirds is a very difficult threshold,” Hastings said of Prop. 16.
More recently, the PUC was on the verge of passing a resolution that included new regulatory language that, Hastings said, “would have put a de facto freeze on new community choice agencies for one or two years.” Opponents rallied and swayed the commission into softening the language of the resolution, which was approved at a Feb. 8 meeting.
Gov. Jerry Brown has talked a hard line against climate change and dirty energy and has been widely lauded as a climate change hero. Strong words have also come from the PUC, where commissioner Cliff Rechtschaffen stated at a September meeting, “At this time, absent very compelling circumstances, we should be directing all of our investments in infrastructure and energy to clean energy resources.”
Lynch said Brown is a climate change hero when “compared to Donald Trump,” and, regarding Rechtschaffen’s statement, she said talk is cheap. “Look at the commissioners’ voting record,” she said.
Gillespie noted that the PUC and the California Energy Commission have approved every fossil-fuel plant proposed since 2010 except for one — the Puente project in Oxnard — whose fate is still being considered.
Lynch wants to see state leaders exert more control over the PUC’s actions and ensure that the commission prioritizes the interests of ratepayers and the environment.
“The PUC is a rogue administration that needs to be reined in,” Lynch said. “The state legislature needs to exercise much more oversight over the PUC and its wanton approval of unneeded fossil power that burdens the ratepayers for decades to come.”
The sun has always provided the planet with most of its energy. Plants and algae use sunlight to create carbohydrates from water and carbon dioxide — a process we call photosynthesis. Over billions of years, the carbon drawn by plants from the air and water has moved through Earth’s food webs and ecosystems and, eventually, settled in huge underground reserves of oil, natural gas, and coal.
Over the past century, humans have been incinerating these vast reserves of fossil fuels to produce massive amounts of energy. But fossil fuel use comes with a devastating cost: Hundreds of millions of years’ worth of solar energy that was stored in these fuels have been set on fire, polluting the atmosphere in a geologic second. The planet, as a result, has experienced a dramatic uptick in atmospheric and oceanic carbon concentrations, causing the land to warm and the seas to acidify.
Renewable energy, though also primarily produced by the sun, is fundamentally different than fossil fuels. The energy is captured by turbines or solar panels before it can turn into carbon, thereby eliminating the need to burn anything. However, processing wind and sunlight into electricity also skips a key step that nature — in the form of oil, gas, and coal reserves — otherwise does for us: storing the energy. This means that renewable energy sources generally must be used immediately: as the sun shines, water moves, and the wind blows. Fossil fuel power plants, on the other hand, can burn their stored carbon energy at any time. This is largely why fossil fuels still dominate the energy sector.
But the age of large-capacity batteries has arrived, and gas-fired power plants that once met energy demands during lulls in wind and solar production are becoming obsolete.
“Batteries are the future,” Lynch said. “The technology is exponentially improving every year — it’s extraordinary, just like solar, where prices have plunged in the last five years. It’s actually cheaper now to generate electricity from solar than from fossil.”
Photo courtesy of Lea Smith Portraits
Janice Lin, founder of Strategen Consulting, said batteries are just one way to store renewable energy.
The cost of storing that electricity has plunged, too, from $1,000 per kilowatt hour in 2010 to less than $230 per kilowatt hour by 2016.
Regulators have acknowledged these declining costs. In October, the California Energy Commission announced it would likely reject the Puente natural gas power plant after an analysis by a Menlo Park group, Clean Coalition, revealed that renewable energy combined with battery storage would be cheaper than building the project.
Chaset, at East Bay Community Energy, said that vote represented a turning point in California’s energy system. “The California Energy Commission rejected it because battery storage prices had come down so much,” he said.
Berkeley resident Janice Lin, founder of Strategen Consulting and cofounder of the California Energy Storage Alliance, said batteries are just one way to store energy. There is also thermal storage, a system in which electricity is used during a period of abundant supply to freeze water. The ice may be kept in a cooler with minimal energy investment in keeping it frozen and then used later, during periods of high demand or low electricity production, for cooling purposes.
“This is a commercially viable technology,” she said. “Companies make ice when it’s cheap to do so and then, instead of running an air conditioner, they use the ice they made at night.”
Lin also pointed to another form of thermal storage by which solar panels direct the sun’s energy into blocks of salt. Salt is capable of storing massive amounts of heat, which actually turns the salt into a molten form. That enormously condensed energy can later be recaptured to make steam, run turbines, and generate electricity.
“Normally, turbines run off of heat, and where do you get the heat? You burn gas, or oil, or some other fossil fuel,” she said. “But here, they’re using solar energy to create heat, which offsets and displaces the gas that you normally would burn to run that turbine.”
There is yet another system called “pumped hydro” that involves pumping water into a storage reservoir at relatively high elevation. Then, when energy is needed, water — which now contains that potential energy — is released downhill through turbines.
However, only battery arrays can store raw electricity, and by buffering energy users against spikes and lulls in production that characterize renewable electricity generation, batteries are poised to drive the shift from fossil fuels to renewable electricity. This will enable California to meet its emissions-reduction targets.
Except in one sector of the economy: transportation. It’s the single-largest source of greenhouse gas emissions in California, and it’s likely to be dependent on fossil fuels for decades. There may be roughly 10 million vehicles operating in California.
“It takes about 10 years to cycle through a fleet of vehicles, so that means if we sold only electric vehicles starting now, it would take about a decade to convert entirely to electric,” Chaset said. “But less than 10 percent of new cars are electric vehicles.” That means an electrified fleet, which could be running on solar power, is probably at least several decades away.
Ryan Popple, CEO of Proterra, an electric bus company based in Burlingame, said no matter how advanced batteries become, industries — both vehicle makers and utilities — will still need time to trust their effectiveness. “The industry isn’t confident enough yet in the technology to totally implement it,” he said.
Popple expects energy providers, such as PG&E, to shift more willingly to a renewable-based grid than energy producers, since the latter actually extract fossil fuel from the ground. Thus, producers may put up a tougher fight against change, Popple said. He said part of their obstruction strategy is the ongoing investment in fossil fuel with power plants that have multidecade lifespans. In fact, the ongoing push for new gas-fired facilities, he said, could be a sign that renewable energy is poised to take over the market.
“I wouldn’t be surprised if you saw some companies rushing through natural gas power plants now because they know the end is coming,” he said.
Powers says utilities are clinging to a 20th-century business model while 21st-century technologies, including renewable electricity and batteries, advance. “It happens in other industries, where the incumbent technology hangs on too long, and then in one big splash, they sink underwater.”
Although California regulators have shown a pattern of approving unneeded new power plants, their stance may be softening. While brand new gas plants continue to go online, the pace of approvals is slowing, and, one by one, existing fossil fuel plants are being left with the dinosaurs.
In 2014, plans to build a gas-powered facility in the East Bay city of Oakley were shelved when PG&E decided against buying energy from the proposed plant. In January, the California Public Utilities Commission passed a resolution that will force the state’s three investor-owned utilities — including PG&E — to phase out contracts with fossil-fuel plants and shift to clean energy. Last fall, the same commission rejected a proposal from Southern California Edison, another major investor-owned utility, to refurbish an aging plant near Santa Barbara — Ellwood Peaker Plant — and instead recommended a long-term investment in clean-energy production.
President Trump recently slapped a 30-percent tariff on solar panels in made in China — a move that threatens to drive up the costs of solar energy in the U.S.
But at the national level, powerful forces have emerged against renewable development. A climate change denier who has promoted oil drilling off the coast of California, President Trump recently extolled “beautiful, clean coal” in a national address, baffling critics and even supporters. Trump also recently slapped a 30-percent tariff on solar panels made in China — a move that threatens to drive up the costs of solar energy in the U.S.
Within the U.S. Department of Energy, too, the fossil-fuel industry once again has a close friend. One of Energy Secretary Rick Perry’s advisors previously headed the energy lobbying firm Edison Electric Institute. And last spring, Perry spun the heads of clean-energy proponents when he called for a formal examination of how shifting toward renewables is harming industries that burn fossil fuels.
But in California, it seems clear that, in the years ahead, many, if not all, gas-fired power plants will become conspicuous relics of the past. Gillespie, of the Sierra Club, is impressed by the fast pace of progress. “Most of the debates over renewable energy now discuss how we’ll get there, rather than whether we will get there,” he said.
The state, he said, is well on its way to meeting, and even beating, its deadlines for emissions reductions and shifts to renewable energy — a rare area of infrastructure development where objectives tend to arrive sooner rather than later, and for less money, not more, than initially estimated.
The state Senate has even proposed to advance those targets. Senate Pro Tem Kevin de León, D-Los Angeles, who is running for U.S. Senate against Dianne Feinstein, introduced legislation in Sacramento that would move forward California’s 2030 deadline for generating half the state’s electricity from renewable sources by five years: to 2025. About 25 percent of the grid’s electricity currently comes from renewables. De León also wrote a proposed law that would mandate full reliance on renewable energy by 2045. With the state already ahead of schedule on its existing targets, and with prices for solar production and battery storage still falling, the shift to solar and wind appears increasingly inevitable.
The state is also pushing to reduce emissions from the transportation sector. “The Energy Commission is leading the effort to build the infrastructure needed for zero-emission vehicles as directed by the governor’s executive order,” wrote Weisenmiller. “The order calls for 250,000 electric-vehicle charging stations and 200 hydrogen fueling stations [in] California by 2025.”
Community choice agencies are also forming left and right, rapidly taking customers away from PG&E and the other utilities. With two Bay Area community choice agencies and one in Los Angeles soon to launch, the number of people receiving energy through these public systems will double, Chaset said.
Still, some feel the shift is taking too long. Gillespie said he believes the state could be powered 100 percent by renewables already, and according to research from UC Irvine, published in late February in the journal Energy & Environmental Science, at least 80 percent of the country’s electricity right now could be coming from renewable energy and battery storage. Lynch maintains that the holdup toward reaching such goals is not technical or financial but, rather, political.
Chaset wants a renewable revolution but feels regulators must progress at a cautious pace. He points out that renewable energy and batteries represent new technology that may not be entirely reliable — at least not yet.
“What would happen if there’s a month in California when it rains every day, and there’s very little wind? Our batteries would drain and we couldn’t refill them,” he said. “Regulators shouldn’t be afraid of new technologies, but they do need to be prudent. All you need is one really bad blackout, and some people would want to go back to fossil.”
Powers sees an accelerating pace forward. In spite of institutional resistance to change, the cost effectiveness of solar and storage is so apparent now that even the PUC can no longer find plausible excuses for more gas-fired plants.
“I do think we may have seen the last natural gas-power plant approved,” he said. “In the last few years, they’ve kept saying, ‘This is the last time we’ll approve a project of this sort,” and it’s just gotten untenable. You just can’t argue anymore that we need these plants.”
But Lynch remains jaded by her experience serving on the PUC. She is watching the prices of batteries fall and their reliability increase. She says she is so frustrated by the state’s monopolized system of providing electricity to the public that she is eager to go entirely off the grid.
“I’m seriously considering getting a battery and putting it in my backyard and pulling the cord.”