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  • 10 Jul 2017 1:34 PM | Anonymous

    (Reflections on the Picker/Syphers Debate at the May 5, 2017 Business of Local Energy Symposium)

     

    A recent gathering in Long Beach, California featured a lively debate between a Community Choice CEO. Geof Syphers, and the President of the California Public Utilities Commission, Michael Picker.  The debate will likely continue in other forums and ways.  Foundational assumptions are not yet in alignment.  They will need to be if both sides of the debate are to collaborate fully and effectively.


    Will California’s energy future continue to depend primarily on state policies and initiatives?  Or is the state’s Community Choice movement ushering in a scenario where local initiatives become a major driver and policy enabler?  Or is the answer “both, and”?  


    The best answer will hinge on accountability and trust.


    Community Choice agencies are accountable to local communities.  To what extent can locally governed agencies be relied upon to responsibly oversee local energy resource deployment and related programs?   Public power is certainly on a stable footing in California, but its Community Choice embodiment has a limited track record.  The course of future state energy regulation could undermine its economic foundations, fairly or unfairly, intentionally or unintentionally.  Everybody loses in this case.

     

    Is local energy resource development even necessary to achieve state goals for renewable energy deployment and energy sector decarbonization?  Or was former US Energy Secretary, James Schlesinger, right when he said, “Small is beautiful, but it isn’t big enough.”?   Even if he was right at the time, will his dictum’s validity erode away in the 21st century?  There is reason to hope so.


    Trust is everybody’s concern.  From a local perspective, to what extent are big solutions to big problems likely to morph into even bigger problems down the road?  The daily newspaper regularly reminds us that big projects and massively interdependent systems encounter unanticipated problems that can be downright scary.  The Oroville Dam crisis comes to mind as well as the on-going market collapse downstream of the California’s waste recycling programs.


    Should the state’s energy supply continue to depend primarily on renewable energy Giga-projects, or should the balance shift toward greater reliance on building-scale and community-scale projects?


    Either way the state’s electricity grid will still be an essential asset.  Should there be stepped up investment in expanding it in order to collect more clean energy from additional Giga-projects?  Or should there be more investment in making local grids smarter in order to better accommodate energy that is collected and used locally?  Or, again, is the answer “both, and”?


    Is the proper balance more likely to be achieved if local jurisdictions gain a seat at the energy policy making table?  And if they do, how will state and local regulators and policy makers earn each other’s trust as the energy sector, like it or not, decentralizes? 

    For state regulators there are strategic opportunities.  Costs of historical power sourcing must be equitably recovered, but also with an eye to encourage better procurement decisions and more attentive contract management.


    Incumbent electric utilities (grid owners) are competent asset owners and program administrators.  Nevertheless, their reward system may need some adjustments.  It directly rewards new capital projects and centrally managed energy efficiency program expenditures.  Should there also be rewards for cost containment, smarter systems, adaptive out-sourcing, rigorously managed preventive maintenance, and programs delivered in collaboration with local agencies and jurisdictions?


    Reward pro-active collaboration, and earn local trust.


    Increase overall reliability and resiliency by finding ways to reward maximum availability and usefulness of both clean local energy resources and fully depreciated and well maintained centralized assets.  Grid owners are trusted customers for independent generators.    In this case, trust saves money.


    Community Choice service providers also save money if they are trusted “off-takers”.  They and their customers stand to lose if they do a poor job of electricity sourcing.  This are healthy consequences if the playing field is level.  It isn’t yet.  Correct today’s costly inequity, and earn local trust.


    Community Choice agencies and their member jurisdictions have opportunities to earn trust as they lean in on energy issues.  Cities and counties have a legitimate interest in local energy investment, local energy jobs, local infrastructure integration, local resiliency, etc.  Convert this interest into collaborative action.  Demonstrate how local energy integration can support state policy goals and accelerate their implementation.  Demonstrate how a state strategy empowering  local investment in local energy resources is a perfect and essential complement to the state’s existing grid infrastructure assets.


    Earning trust requires engagement.  Engagement requires preparation.  Here are three important, necessary, early steps:

    1.  In the next year or two every local jurisdiction in California run numbers to gain a rough quantitative understanding of its own energy profile and what it implies for the local economy and for carbon footprint reduction.  What energy related programs and initiatives will be most helpful to local residents and businesses and also to economic stability?

    2.  Each local jurisdiction can take inventory of its energy management capacity and look for opportunities to expand it.   Energy is a big part of a local economy.  Every community has residents and businesses that are specialists engaged in energy related work.  In many cases, they are willing to pitch in doing temporary or advisory work while their city or county develops equivalent staff capacity. 

    3.  Communities served by state regulated utilities can take inventory of programs offered by these utilities, identifying those that are best aligned with local needs and priorities and also identifying specific areas of unmet or under-served local needs.


    However, collaborative opportunities with state regulated utilities may be limited due to rules governing their expenditures and customer relationships.[1]  Community Choice providers also have limitations, especially to avoid duplication, but generally have more flexibility and greater motivation and encouragement to collaborate.


    California has a stake in collaboration between energy service providers and cities and counties.  It also has a stake in building local energy management capacity in cities and counties and their Community Choice service providers.  Some of the ratepayer funds currently administered by state agencies and state regulated utilities can be helpful in building local capacity.  As capacity grows, there are Community Choice business models that will allow each member community some latitude for local optimization and independent decision-making.[2]


    The state has an interest in striking the right balance between energy technology intended for use by grid owners and energy technology needed by cities, counties and their generation service providers.  Public benefits surcharge funding allocations should adjust the balance according to desired impact.


    The state’s comfort with greater local government engagement in its energy sector will grow as it considers that cities and counties already provide an array of local utility services, including  water supply and distribution, waste collection and recycling, sewer and wastewater treatment, etc.  They do so diligently and competently.  Costs of such utility services are recovered via rate setting processes that apply the principles state economic regulators apply to electricity and natural gas rates.

     

    Integrated resource planning, a popular term in state energy regulation, is not unique to the energy sector.  It is familiar to water and waste collection providers.  There is both reason, and now an expanded opportunity, to work toward a concept of local integrated resource planning that embraces all essential local services, including energy.  Silos get in the way of full, appropriately opportunistic local integration.


    As new technologies transform the energy sector and state and local agencies strive to achieve cost-effective and rapid decarbonization, both state and local governments will need capacity to plan and manage change.  The state’s energy related change management capacity is invested primarily in the electricity and natural gas utilities it regulates.  Local government’s capacity is invested in energy utilities that are currently regulated locally.  Coverage is thus incomplete, but it is expanding as Community Choice programs come on stream.


    Prudent expansion of Community Choice in California can bring state and local representatives and the energy businesses they regulate into closer engagement.  The result will be trust relationships that remove barriers to accelerated decarbonization and energy infrastructure resiliency.

    Gerry Braun

    ©2017 IRESN, Inc.


    [1] Community Choice energy service providers have greater flexibility and motivation than state regulated utilities to engage adapt and innovate locally, though in their early stages, they may have limited budget and staff capacity to develop programs and projects collaboratively with each member jurisdiction. 

    [2] For example, see https://californiachoiceenergyauthority.com/

  • 10 Jul 2017 1:16 PM | Anonymous
    California’s electric utilities, both investor and publicly owned, are state government’s preferred, and historically most opportune, instruments of energy sector policy.  They do excellent work operating a business model that has served modern society well for many decades.  Model refinements and rule enforcements are initiated when there is an obvious and consequential problem.


    With a majority of eligible cities moving forward, Community Choice Energy In California has the vague feel of a third party movement, or even perhaps an insurgency.  As yet there is no acknowledged problem to which it presents an obviously necessary solution.  As yet there is no clearly articulated statement of the opportunity it creates both the state and its communities.  What is local jurisdiction mobilization to decarbonize local energy infrastructure needed?


    Problem and opportunity.  Best to start looking at both sides of the coin.

    The natural reaction of incumbents to the perceived “insurgents” has been on display in events staged in the early months of 2017 - regulatory workshops on Community Choice and also “Retail Choice”, plus a second annual symposium on “The Business of Local Energy”, aka Community Choice.  In these forums, state regulated utilities and their regulators emphasized one point - that the state has ambitious decarbonization goals and a possible pathway to achievement,  provided the excellent work being done inside the current electricity service business model is not degraded or disrupted.


    It’s a fair point.


    Is healthy, non-disruptive change possible?  Is there a  precedent that could help guide their thinking on the question?


    There may be.  Specifically, in the wake of California’s electricity crisis, statewide electricity system operation was entrusted to a third party, i.e. the California Independent System Operator (CAISO).  So far, the results appear to have been satisfactory.  Alongside the actual grid owners, CAISO is also doing excellent work, and the grid owners seem comfortable with the relatively new arrangement.  It has relieved them of major responsibilities without impacting their profitability and has freed them up to tackle a growing body of equally critical work.


    Could Community Choice come on stream in California and deliver equally satisfactory results based on excellent work?  Under what conditions? 

    Independence and excellence come to mind.  Enabling legislation (AB 117) envisioned independence from state regulation, relying instead on local regulation.  Local regulation is implicit in the authority AB 117 accords local jurisdictions to form Community Choice providers.


    Regarding excellence, what need does Community Choice meet?  Does just meeting it suffice?  Or is excellence a higher bar?  Who is to be the judge?


    Electricity customers and the local leaders they elect are the presumptive judges.  Simply purchasing electricity from the sources and projects already developed and operating might meet their need but would not be a game changer.  What work can Community Choice do that adds a missing dimension to the current excellent work of incumbent providers, making the result “more than excellent?


    The answer depends on the transformational technologies coming on stream in the energy and transportation sectors.  Conversion to low carbon vehicles, low carbon buildings and their shared enabling infrastructure demands unprecedented local as well as higher levels of policy attention, operational engagement, planning integration and deployment facilitation. 


    If only the new technologies could be made to come on stream slowly, perhaps incumbent energy sector entities could have a primary role in their deployment.  Their inertia is proportional to their size, not to mention the body of law and policy that has accumulated over a century or more.  But state goals require acceleration, and some communities will want to move faster than others.  Their ability to do so will hinge on Community Choice business models that accommodate local diversity, remove obstacles to clean local energy resource deployment and engage local government capacity to deliver programs and implement projects.  


    Community Choice doesn’t guarantee local decarbonization or even any changes that will be noticeable to the typical energy user.  But highly noticeable changes will be necessary if local greenhouse emissions are to ramp down vs. just slowly trend down along current trajectories.  What is possible without local action will be just plain slow.  As it has been since 1990.


    Critically necessary changes will tend to decentralize energy infrastructure and services, leading not just to faster decarbonization but also to significant democratization and demonopolization.  This will be the new standard of energy sector excellence.  “More than excellent” will mean meeting current industry standards while also delivering accelerated decarbonization, increased grid resiliency and stronger local economies.

    Energy sector transformation will be driven, not exclusively or even primarily by state or national policy, but rather by local economic and environmental resiliency initiatives and investment.  These local initiatives will respond to an awakening recognition that, in a local economy context, importing energy means exporting dollars.  How much to energy to import vs. to supply locally is a pragmatic and now widely available local choice having both local economic and resiliency implications.


    Timely local decarbonization will hinge on penetration of vehicle markets by battery and fuel cell electric vehicles as well as on pervasive building energy retrofits.  These retrofits must aim for deep decarbonization, generally substituting zero carbon electricity for natural gas, and specifically substituting heat pumps for natural gas furnaces and water heaters .  Fundamentally, the need is to electrify both transportation and buildings.  Simultaneously.


    Fortunately, recent and near term energy/transportation technology tipping points make decentralization of energy electricity service inevitable, albeit unlikely to proceed at the same pace in each community and state.


    The present California Community Choice formation tipping point creates a need to organize and greatly strengthen local energy management capacity across the board.  More and better organized local capacity will be necessary to minimize disruption and societal costs as local energy projects and more flexible local energy infrastructure come on stream.  Just adding energy supply service to the list of other services already planned, delivered and competently regulated locally will be an excellent outcome in many cases.


    More than excellent Community Choice implementation will enable local investments that drive local decarbonization.  


    For example, Community Choice electricity service can bypass barriers to community and residential solar while also expanding urban/rural energy exchange.  It can help capture the resiliency benefits of micro-grids that enable more economically efficient portfolios of residential and community solar and energy storage.  Solar micro-grid deployment by Community Choice providers will enable and motivate faster and progressively more complete local grid modernization.


    For all its local benefits, Community Choice is a complement, not a substitute, for active city/county engagement.   The examples cited above require the joint and integrative attention of city and county government.


    There is also a potential new role for grid owners.  Accelerated and economically optimum clean local energy resource deployment may require creation of local independent electricity system operators.  These entities will have responsibility for local reliability and real time supply/demand balancing.  Alongside or as subsidiaries of grid owners, they will partner with regional system operators to assure fully integrated planning and operation between regional and local grids.


    City and county level clean energy deployment choices will determine if, when and how local grids need to change.  Community Choice is a work in progress just beginning to take shape.    Local grid modernization will ultimately be driven by local policies and choices.  Community choice only gets the ball rolling.


    California’s approach to statewide electricity system planning and operations can inform future local decisions regarding local electricity system planning and operations.  From the beginning, CAISO’s board  included members having high level energy sector experience.  Community Choice agency boards and advisory groups will need to tap comparable and more locally focused energy sector experience indigenous to the communities they represent.


    In summary, Community Choice will create new models for customer engagement and also engagement with energy managers in city and county government.  Energy management capacity building will be necessary at both Community Choice provider and local jurisdiction staff levels.  Technical, program, project and planning collaboration between cities and counties and their Community Choice service providers will be the standard of excellence and the foundation for “more than excellent” local electricity service.

    Gerry Braun

    ©2017 IRESN, Inc.

  • 25 Aug 2016 8:53 AM | Anonymous

    I once owned an old pickup truck.  It had loose steering, brakes that didn’t like long downhill runs and headlights that would stay on for about 20 miles and then take a break.  I could never find the source of that problem.  But I loved the truck.  I used it mainly for commuting to my job in Washington, DC from my home in the Virginia suburbs.  Sometimes on weekends I would use it to haul stuff out to a rustic cabin across a couple blue ridges in West Virginia. 


    When  you are driving at night on a deserted stretch of hilly, winding two lane road and your headlights suddenly go out, you put on the brakes.  And stop to get your eyes adjusted to whatever light is available.  Instinctively.  Because otherwise it’s really scary. 


    My work with the City of Davis on their exploration of forming a community choice agency recently reminded me of my old truck and its quirky headlights.  For a year or so I was part of an advisory team that worked closely with city officials and consultants to help reach a decision on how to move forward.  The resulting decision was to join with one other local jurisdiction and form a joint powers agency.


    In some ways our little team of local energy experts was the set of headlights our city needed to move confidently forward .  And it did.  It accelerated to highway speed as our team began to dig in.  And as our city gained confidence that it could trust the advice it was getting on a relatively unfamiliar and therefore somewhat scary subject. 


    Several months have gone by.  A new community choice vehicle is now sitting at the point on the road the city got to.  It doesn't yet seem to be moving confidently forward, and I think I know why. 


    Headlights help.


    Gerry Braun

    Integrated Resources Network

    www.iresn.org

  • 02 Aug 2016 1:28 PM | Anonymous

    Terrorist attacks in Paris.  Climate talks in Paris.  Which got saturation level media coverage?  The terrorist attacks, of course.  They were about life and death. 


    And yet, so were the climate talks.  A lot more lives.  A lot more deaths.  Just not good fodder for action movies and the daily news cycle.


    What I know about the Paris conference I learned from colleagues who participated. 


    First, the bad news.  Go to:


    https://www.researchgate.net/publication/286238595_Policy_thresholds_in_mitigation/figures 


    You’ll find a chart that shows climate change impacts (general categories) as a function of temperature change (currently three quarters of a degree C vs. pre-industrial global average temperature).  2oC is a consensus limit initially adopted by Europe and thought to contain the most extreme impacts such as mass extinctions.  4.5oC will be reached if there is no further mitigation, 3.5oC if only current policies remain in effect, 2.75oC if pre-Paris pledges are honored.  Most impacts, including population displacement due to sea level rise are already occurring.  Even if the consensus limit is not reached, coral reefs apparently cannot be saved. 


    Should be a wake-up call, eh? 


    The good news?  Unanimous agreement among 195 UN members to try to keep global average temperature within 2 degrees centigrade of pre-industrial levels, and try to keep it within 1.5 degrees in deference to island nations impacted by any significant sea level rise (SLR).


    Good enough?  Heavens, no. 


    Arguably what we have, to borrow historian Barbara Tuchman’s term and the title of one of her books, is a “March of Folly”, but this time on a global scale, i.e. “the recurring pursuit by governments of policies contrary to their own interests, self-destructive acts carried out despite the availability of a recognized and feasible alternative, the impotence of reason in the face of greed, selfish ambition and moral cowardice”.     


    For powerful national governments climate change does not loom as a matter of life and death. Not yet, even though it is already a matter of life and death for many communities and people.  Climate-driven death tolls increase every year.  Community collapse is happening.  Populations are migrating.  But the direct causes - floods, wars, droughts - mask the indirect and fundamental causes, i.e. localized climatic shifts that upset fragile ecosystems and economies.  The upsets will be increasingly numerous, and, thanks to globalization, the their secondary an tertiary impacts will reach everywhere. 


    The situation is already basically unstable. 


    If we recognize that for some, it is already an emergency, i.e. locally if not globally, perhaps the emergencies to come can be addressed by better local preparation, and this a reason the term resilience is suddenly so popular.  If our communities are resilient, they will be ok.  Right?  Every community for itself.  May the strong survive.


    Well, maybe.  If we prepare for an emergency in the right way, we can reduce the risk.  And certainly, the right way to prepare locally for climate related emergencies on the horizon would be to break consumption habits that lead to climate change.  At some point, these habits will become prohibitively expensive, if only because globalization feeds on consumption.  The dominos of collapsing local and regional economies, and related consumption, will change the globalization game in a fundamental way. 


    At a minimum let’s start using the accurate terminology.  Emergency, not mere change.  Change creates winners and losers.  For climate change losers, the result is tangible, i.e. an existential emergency.  Emergencies have happy endings only if the response is good and quick enough.  The larger emergency escalates as more and more people and communities find themselves in the loser column. 


    The big climate emergency is a patchwork of local emergencies.  The only apparent feasible and timely response is a patchwork of decarbonization action, local and democratically determined.  Appropriately, the “patchwork project” envisioned above (and discussed in more detailed here) is a hopeful response to the patchwork of local climate related emergencies we have every reason to expect and are already seeing in places like Syria.


    Decarbonization, decentralization, and democratization are the three imperatives of timely climate action.  They are inter-dependent.  Time is no longer on our side.  At this time decarbonization is stalled for lack of decentralization.  Centralized infrastructure has enormous inertia and can’t change fast enough.  Decentralization is stalled due to undemocratic governance.  Money consistently votes against it.  Democratization is impossible where people have to migrate because they can no longer find water and food and there is no help from centralized institutions.  The wars that result solve nothing.


    This is the climate emergency, and the alarms are sounding.  Our present unevenly shared wealth is a fragile shield.  Let us each do what we can where we are.

     

    Gerry Braun

    Integrated Resources Network

    gbraun@iresn.org



  • 02 Aug 2016 10:42 AM | Anonymous

    Utility contractual obligations to independent generation project owners must be honored and/or renegotiated.  Unlike other states, California allows its incumbent for profit utilities to impose “exit fees” on electricity users switching to community choice energy service.  In northern California, these fees now add 25% to the cost of newly purchased renewable electricity. 


    Not surprisingly, these surcharges have come under fire from cities and counties across the state.  Conflicts and trade-offs among important societal values, e.g.  equity, innovation, the state’s climate action goals, etc., demand resolution.  Unfortunately, they do not lend themselves to integrative resolution via “quasi-judicial” processes of utility economic regulation. 


    One scenario for resolution is a protracted collaboration between the California Public Utilities Commission (CPUC) and California’s  energy utilities to “oversee” the on-going creation and planning of locally accountable CCE service.  However, in this approach there is an inherent conflict between utilities’ financial motivation to create new centralized assets on which the utilities can “earn” a return, and the potential fast track CCE-enabled deployment of customer and third party financed decentralized energy resources (DERs) that attract local investment and create local jobs.


    The conflict and potential for collaboration between grid asset owners and communities creates an urgent need for integrative policy attention. 

    Strategically deployed and properly integrated DERs can obviate the need for additional grid capacities at all levels, especially high voltage bulk transmission infrastructure. 


    New transmission lines take as much as a decade to plan, permit and deploy.  Transmission infrastructure in general has demonstrated vulnerabilities.  In the face of plummeting costs of DERs, it is also increasingly at risk of becoming an under-utilized or even stranded economic asset. 


    Independent transmission operators have their hands full ensuring market and infrastructure stability in the face of these contingencies.  In parallel, the CPUC has its hands full charting a socially beneficial future for corporate monopolies that currently have little short term financial incentive to innovate, i.e. to plan and manage assets according to their highest value in a likely DER driven energy future.


    Legislative action will likely be needed to balance legitimate financial interests of utility managers and compelling interests of local jurisdictions in economic and infrastructure resiliency.


    Gerry Braun

    Integrated Resources Network

    gbraun@iresn.org

     

  • 02 Aug 2016 9:45 AM | Anonymous

    Introduction

    Suppose there were an on-going project to limit further global warming to an additional three quarters of a degree.


    What would it look like?


    It might look like California’s climate action “project”, but even in California, any consequential climate related regulation is under relentless  fire from industries it inconveniences.  Even its supporters acknowledge it may need some fine tuning.  One obvious criticism is that California accounts for only one percent of global greenhouse gas (GHG) emissions.  We can’t save the world.  Others say we need to pay our good fortune forward.

    We might ask why there is no similar but appropriately broader based project already underway. 


    Or is there?


    We immediately notice, not one integrated project, but a lot, hundreds, thousands, of aspirational initiatives scattered about.  Generally, they aim to reduce “carbon footprints”.  For example, some California jurisdictions and agencies have goals to achieve some dimension of “carbon neutrality” by 2050, e.g. in the electricity sector.  Many local California jurisdictions have “climate action plans” targeting vehicle miles traveled and other transportation metrics.  In the buildings sector, California is working on “net zero” standards that would be applied to new residential buildings as soon as 2020. 


    An active, on-going discussion of appropriate metrics is underway.  California even has legislation that, in an emissions allowance trading format, attempts to allocate financial resources by charging to pollute and then, perhaps, using the proceeds to fund projects that don’t pollute. 

    From a distance it appears that similar initiatives are cropping up unevenly in some other parts of the US and in stable economies elsewhere around the globe.  In the aggregate they appear to be loosely related to the climate action commitments a large number of countries made in Paris.  There are also some country-level commitments, e.g. by India and China, to dramatic GHG emissions reductions but only after on-going dramatic carbon emissions increases are locked in.  


    Of course, in countries and places afflicted by economic crises, wars and political upheaval, climate action initiatives lack many essential ingredients.  This hard-to-ignore reality, by itself, argues for urgency.  Slow climate action surely increases the potential for crises, wars, and upheaval.  One wonders at what point climate-derivative dysfunctions will overwhelm the possibility of sufficient and timely planet-level climate action.  Or are we already there?[1]


    Project Design Considerations 

    1. Technology advances are out-pacing energy infrastructure adaptation.  Carbon emission elimination steps need to plug in now rather than await action by the owners and operators of existing infrastructure assets. 
    2. Conventional economic wisdom in the energy sector, primarily the premise that project costs relate inversely to project scale, is being overturned as economies of equipment manufacturing scale begin to overwhelm any economies of over-all system scale.
    3. Transparent and publicly accountable local political institutions can agree on policies for climate action much more readily than their more centralized counter-parts.  Even in the US, where, arguably, our national government is transparent and accountable, an “all of the above” energy policy seems to be the best we can do.  In other words it basically means “more of the same”.  It allows for concessions that protect incumbent industries but at the expense of political agreement on long term direction. 

    A “Patchwork” Project

    What we can see now in hazy outline is a project that, if it is proceeding at all, is proceeding as a patchwork.  If climate action were a quilt, we might detect the tiniest of squares as the only ones  ready to be sewn in.  Tiny (on a global scale) squares like all-electric solar powered homes, the all-electric solar powered neighborhood, electric vehicles charged from on-site solar arrays, and the occasional solar powered micro-grid.  By themselves they seem insignificant, but in numbers that are realistically possible, and managed together with other decentralized resources, they are probably our best hope. 


    Meanwhile, there is a growing movement for energy sector decentralization that manifests as localization of energy production enabled by local agencies and focused on local energy service.  Not surprisingly, this movement is more easily enabled by strong and unified central governments than weak, politically polarized governments.  California offers a hopeful and experience-based, but still fragile, example.  California’s community choice movement basically offers much faster local climate action at lower energy user costs than current, more centralized approaches. 


    Suffice to say it would be best if all the patches were stitched together, but they don’t have to be.  For example, simple, rugged technology is available to create highlyreliable and cost effective micro-grids.  Their cost-effectiveness improves to the extent the operations and architecture of regional and local grids enable optimized internal and external integration.  And of course, it is in a state’s or nation’s interest to enable the latter, but it will not be an economic or reliability show-stopper if they choose not to.


    Even larger squares in the finished patchwork will include the service territories of energy utilities that source their electricity from 100% renewable sources.  Also included will be dealerships of vehicle manufacturers who specialize in vehicles powered by electricity, plus the assets of natural gas utility companies that have successfully converted their infrastructure and sources to deliver renewably generated hydrogen rather than “natural” gas. 


    A plausible vision?  Yes.  A traditional project?  No, but traditional projects are instructive. 


    Successful traditional projects have a plan whose most basic ingredients include clear measures of success, valid assumptions, a budget, a schedule, a work plan, a client, and most importantly, a team whose members are accountable to one another.  Does the on-going patchwork project have these? 


    Yes and no.  Mostly no.  But there is no reason it can’t.


    How to Design a Patchwork Climate Action Project: 

    1. The measure of success and unstated assumption driving the current climate action project is that the pieces will all fit together if the architecture of our national and regional energy grids changes according to various foreseeable contingencies, e.g. heavier reliance on renewable sources, better real time and automated control of power flows (especially close to the point of energy use), and better integration of on-site supply with on-site use.  A lot of detailed thinking is going into this, mostly sponsored by the US Department of Energy.  The implementation team, aka “stakeholders”, were originally thought to be companies and institutions rather than people and their communities.  Some re-thinking is in order.  
    2. This basic assumption seems to be changing at the margins, and in a direction consistent with a “patchwork” vision.  It’s no surprise that the change manifests in DOE’s SunShot Initiative - solar energy has long been the best solution to grid limitations.  Thought is now being given to how the Initiative can engage with and support local communities - a welcome but heavy lift for a Federal agency which struggles to engage successfully with comparably sized entities, i.e. states and global industries. 
    3. In a more traditional project, there would be a budget for the patches as well as for the fabric.  Clearly, money is being spent on both, but sources are diverse and independent.  So, every patch and every thread of the connecting fabric will need to make sense independent of one another, both initially and when everything is eventually stitched together.  This could slow things down, and/or require smarter and more integrative planning, especially at the patch level.
    4. In a more traditional project, the schedule would recognize the various tasks and their interdependencies.  (You can’t start task X until you’ve completed task Y, and so forth).  It feels like a good thing that our national laboratories are being funded to think about the fabric to which the patches attach.  But there is no discernable traditional schedule for this work.
    5. Regarding a work plan, we seem to be in familiar territory, at least in California.  Our work plan prior to our 2002 electricity crisis relied on private sector “stakeholders” to resist the temptation to exploit their new-found market power.  They didn’t.  One obvious lesson is not to concentrate so much market power in too few organizations and “stakeholders”.  We still do.  We don’t yet have a political work plan that responds to fundamental technology and cost shifts that favor decentralization.     
    6. Fundamentally, the project client is, or needs to be, us.  All of us.  Can’t be anyone else, because we are actually already paying for the work and will be using the product. 
    7. We are also the project team.  Corporate and elected “decision-makers” place limitations on what we are able to do but also could work along-side us.  Some are starting to.  Holding more of them accountable to do so is part of our team’s work.
    8. Accountability varies.  It mostly resides locally, especially in our fractious and compartmentalized Federal political system.  If accountability resided elsewhere, the folks whose national, state and corporate policy decisions resulted in the climate emergency we face would have some explaining to do. 

    But they were only following orders.  CEOs were accountable to shareholders who measured their performance according to fluctuations in stock price.  National and state elected officials saw themselves as accountable to a shrinking minority who funded their electoral campaigns. 

    Meanwhile, local elected officials had no simple and prudent way of steering the local energy ship.    


    Until now. 


    Pivotal role of city government

    Clean, carbon-free local energy is now, quite dramatically and unannounced, cost competitive with imported energy. 

    City officials can negotiate (in their constituents’ long term economic interest) terms of development agreements that penalize lack of initiative and/or attention to a development’s carbon footprint.  Frankly, the current game is rigged in favor of no energy investment at all, sticking unsuspecting building buyers with a big hidden energy mortgage in addition to the property mortgage.


    City officials actually have the authority to determine who is chartered to provide energy services in their community.  They’ve had little reason to actually exercise this authority in the past.  They now have real choices with very different local carbon footprint implications and should now be expected to weigh them carefully. 


    Many are doing just that, but many also lack confidence, insight and community support.  Likewise, many city governments currently lack any in house energy management capacity, capacity necessary at a minimum to map out the way forward that best fits the city’s energy profile and demographics.


    Essential role of community members and local businesses

    Concerned citizens can lend needed confidence, insight and support by getting involved.  We can lend expertise and help city public officials come up to speed regarding energy trends and opportunities.  Many of us are busy with patchwork projects and making patchwork project investments by reducing our own carbon footprints and learning how to manage our energy use responsibility.  We can be generous sharing experience and expertise in support of the institutions that appear to be walking the talk with us.  If they appear to be slow-walking the talk, we can offer a friendly reminder that to be late is to be irrelevant.   


    Local elected officials approve plans and oversee their implementation.  From here on let’s specifically advocate for each city and jurisdiction to do a good job on local climate action and adaptation planning.  And let’s intervene if there is an obvious failure put plans into effect, let alone keep them up to date.  Political points are scored by approving plans.  It shouldn’t be necessary to remind anyone that points can be taken away by voters if plans are not actually implemented.


    For those of us who have bandwidth and background, let’s not pin our hopes on what others could do if they weren’t preoccupied with extracting a livelihood from the institutions of our day.  Let’s find time every day to be the change we wish to see in the world, patching and stitching as if there really were a climate emergency. 


    Because there is.


    Gerry Braun

    Integrated Resources Network

    gbraun@iresn.org

     


    [1] We may be.  Syria’s civil war, whatever its complex political trajectory, appears to have been precipitated primarily by climate impacts.  See http://weather.climate25.com/project/thomas-friedman/. Multiply the disruption flowing from the situation in Syria by orders of magnitude and you may have an idea of the world we have been creating for our children and grandchildren.

  • 01 Feb 2016 9:12 PM | Anonymous

    The following post was contributed by IRESN Member Enoch Walker and was published by The Lune, a magazine of new contemporary poetry. 


    When as a child we are asked to write a poem, we get in touch with images that evoked feelings and try to recapture them using words.


    Later, when a poem is read out loud with passion and feeling, its words are etched in our memories by the power of the emotions they evoke.


    The totality of who we are…mind, spirit and imagination…is engaged.  If a poem resonates, it resonates at a gut level…to the extent it applies and relates to our lives. 


    More unconscious than conscious, more intuitive than reasoned, more felt than considered, our response runs deep.


    I got involved with solar energy R&D through my training as an engineer.  When I had responsibility for national and utility R&D programs in solar energy, part of the responsibility was to advocate for funding and congressional and corporate support.  If we achieved our R&D goals, our energy utility companies would have a new and better way of doing their business.  That was the basic business case. 


    It was necessary.  But not sufficient.  Its insufficiency led to the collapse of an enormously promising enterprise that began building solar power plants in California in the late 1980s.


    Solar R&D programs were being funded for another, quite sufficient reason. A reason that resonated. At a gut level, people got it that naturally generated energy from inexhaustible sources would be more harmonious and less worrisome than energy sources associated with environmental degradation, death and destruction.


    What people wanted mattered to governments and investor owned utility companies back then.  They funded energy R&D with an eye to public good will and the wishes of regulators.   The business case really didn’t resonate.  Later it was rendered irrelevant by changes in electricity  market rules that favored fuel based electricity generation over capital intensive renewable generation. 


    This reality finally dawned on me somewhere in the late 1980s.  I came to a conclusion that’s been routinely confirmed ever since.  Still applies.  It came to me at a time when the jury was still out on solar energy.  It occurred to me that my company, a large and powerful utility, would never even decide to move forward with solar energy let alone actually do it. 


    I realized it would have to be people individually choosing solar that would propel solar forward.  At the time solar resonated with people because they could imagine it as part of their lives, i.e. as an improvement.  My company was a monopoly.  It would get along just fine without improvements.  Yes, of course it could imagine changes in its business environment and needing to navigate them, but it couldn’t imagine actually initiating or creating the changes. 


    People, on the other hand, continuously imagine what they would want to be different in their lives, what they are willing to try, what they are willing to do and decide, sometimes without even “crunching the numbers”. 


    This is why ever since I’ve carried with me preference for programs and initiatives that put solar close to people, preferably on the buildings they live and work in. 


    I didn’t even realize the fully impact of this until it really started to happen.  I sometimes wonder if so called utility-scale solar would ever have broken through if people-scale solar hadn’t gotten traction first, thus reinforcing the intuitive resonance I mentioned above. 


    I stay in touch with a network of passionate solar advocates who originally organized around a theme of moving solar to “scale,  They have come to rejoice in the scale that projects, companies and industries have achieved over the decade since wind and solar markets reached “tipping points”. 


    I share their joy, principally because the dominant part of the solar industry is now large enough to propose, lobby and negotiate for favorable policies using its money and clout rather than having to rely on public sentiment to carry the day.  For now anyway. 


    But for the future, I would have the industry take Kipling’s advice as it approaches maturity and “walk with Kings—nor lose the common touch”.  In other words, solar advocates, don’t forget who brought you to the dance.  It was everyday people who could imagine solar on their homes and in their communities, not so much the engineers like me who initially thought solar technologies and projects would need to scale up to fit the utility business models of the twentieth century. 


    It’s good that the scale-up did happen.  Nevertheless, the business models of the twenty-first century may continue to need to be shaped by what resonates with real people and real communities.


    Returning to the poetry metaphor above, Robert Frost’s life goal was to “write a few poems that would be hard to get rid of”.  In our “modern” world, the only things hard to get rid of are things that live in the hearts and imaginations of people down through generations.  Solar energy is now alive in this way. 


    May it continue to be.

  • 01 Oct 2015 1:55 PM | Anonymous

    (The following op-ed, co-authored by Gerry Braun and Mark Braly, appeared in both the Davis Enterprise and the Davis Vanguard in the last week of September, 2015.)


    The City of Davis and UC Davis have climate action plans that call for aggressive carbon footprint reductions.  Both have had recent opportunities to put their plans into action.  UCD partnered with a private land developer to create West Village, a new residential development on land west of its main campus.  A mutually agreed goal was that all the energy used by West Village homes and would be supplied by on-site renewable energy systems.


    Additional goals were that the net zero energy be achieved at no additional cost to West Village residents and no loss of profitability to the developer.  Thanks to detailed technical and financial analysis, combined with energy conserving design features recommended by Davis Energy Group and solar electricity infrastructure skillfully provided by SunPower Corp., as of November 2013 West Village was “well on the way to the ultimate goal of operating as a ZNE community”. [1]


    More recently, the City of Davis negotiated an a development agreement with The New Homes Company to create a new housing development in Davis called The Cannery.  Project plans called for consideration energy conscious design features along the lines of those adopted for West Village.  However, no energy or climate action goals were set.

     

    During negotiation of The Cannery development agreement, representatives of the Valley Climate Action Center (VCAC) met with negotiators for both sides and advocated for a net zero goal for The Cannery following the West Village example.  It was clear at the time that such a goal would be unachievable unless certain essential features, e.g. properly sized rooftop solar arrays, would standard for all buildings.

    No energy related goals were set, but New Homes did decide to include solar arrays (undersized relative to design energy usage) on all Cannery single family homes, albeit, explaining that larger solar arrays and net zero energy packages would be offered as upgrades. 


    Net zero energy goals were achieved at West Village under less favorable conditions, e.g. at a time when rooftop solar installation costs were significantly higher than they are today and during the remainder of The Cannery build-out.  So, the VCAC board arranged a follow up meeting with City and New Homes representatives last week to re-open discussion of climate action goals.


    VCAC representatives pointed out that on its current trajectory, The Cannery development will add significantly to the City’s carbon footprint unless a large percentage of initial home buyers opt for necessary upgrades.  They further pointed out that, while net zero energy can be cost-effectively achieved during initial construction, later retrofits aiming for net zero will practically and economically unrewarding.  Incremental owner initiated solar array upgrades will be as much as two or three times more costly on a unit energy basis than their cost as part of the new construction process.


    After considering New Homes’ description of their sales process for The Cannery, the VCAC board voted to recommend that The New Homes Partnership and the City of Davis collaborate to establish a net zero goal for The Cannery and to include standard features in Cannery homes that lead to its achievement.  VCAC believes that both parties can advance their reputations for innovation and environmental stewardship by adopting a net zero goal for The Cannery. 


    Perhaps more importantly, in taking action, both parties can correct their original message to the public and the world.  In a home construction and sales context, thicker carpets and other amenities are rightly labeled and offered as profitable upgrades.  In a moral and environmental stewardship dimension, sustainability is not an upgrade.  It is basic to bringing a potentially runaway global climate back into balance.


    [1] http://news.ucdavis.edu/search/news_detail.lasso?id=10775

  • 21 Dec 2014 3:58 PM | Anonymous

    In a recent article Gerry Braun and Richard McCann summarized energy service options available to Davis, pointing to the benefits of  locally accountable energy service delivering clean, low carbon electricity to Davis residents and businesses. This article reviews recent trends in the costs and performance of clean energy technologies, which are now poised to offer an energy future that can be small-scale and local.

    Renewable energy on the rise

    California leads the US in deploying smaller renewable power systems.  The economics are shifting to make the smaller systems cost competitive with the large “utility-scale” generators that have long dominated the power grid. Global market trends now favor decentralized renewable energy deployment, featuring thousands and even millions of individual renewable generators and energy storage devices. 

    This transformation is forming the basis of a 21st century electricity system that will be increasingly decentralized, enabling local jurisdictions like Davis to have great flexibility.  We’ll be able to determine our sources and uses of energy so as to achieve our sustainability goals while keeping energy costs affordable. 

    Is this armchair speculation, or is there evidence of a major shift in energy sector investment?  The evidence is compelling, but it requires careful interpretation.  Globally, the shift is occurring faster than most energy experts imagined.  To some it may appear too good to be true. 

    But true it is nevertheless.  In the past decade global wind power capacity, already substantial, increased by a factor of 10.  Solar power capacity, starting from a smaller base, increased by more than a factor of 25.  Combined, global solar and wind industries now attract close to a quarter trillion dollars of annual investment worldwide. These rapidly growing industries have enough manufacturing assets and create enough jobs to sustain their own continued growth into the foreseeable future. 

    While the US lags many other countries in per capita renewable energy investment, California does not.  Thanks to its environmentally sound policies and excellent renewable resources, California continues to lead the US in renewable energy deployment.  In 2014, California accounted for more than half of new solar power capacity installed in the US, i.e., 3.3 gigawatts out of 6.5 gigawatts.  

    Much of the new solar capacity in 2014, about 65% for California and 50% for the US, consisted of relatively large power plants.  Industry analysts, however, detect and forecast a shift over the next few years that favors smaller installations connected to local electricity grids.  By 2018, they project new “distributed” solar power installations to exceed centralized installations by a factor of two in the US and nearly a factor of six in California.

    Small is beautiful

    What are the benefits of smaller-scale generation? Reliability and resiliency, direct consumer cost controls, better integration with local energy resources and energy management systems, great potential for local economic development, more control over the environmental impacts – in short, real potential to align our energy use with our city’s economic, environmental and social goals and needs.

    This trend toward decentralized electricity, along with comparable trends in the market for electric vehicles, has significant implications for Davis’ energy future.  Davis residents are already investing in solar power at a per capita rate that exceeds that of most, if not all, other California cities.  The excellent solar energy resource in California’s Central Valley results in opportunities for residents to save money by choosing solar.  Davis’ savvy community members are, apparently, especially alert to the opportunity. 

    Wind power also can come into the mix of local resources. Witness the large wind turbines at the Budweiser brewery in Fairfield.

     

    Thus, among California communities Davis is especially well positioned to achieve an important milestone, i.e., lower cost, more resilient local energy supply that is carbon-free and may eventually suffice for all local needs.   It helps that, thanks to the growth in global industries, solar and wind power technologies are mature, proven and already at cost parity with the mix of resources that currently serve northern California’s electricity needs.  Scale economies and incremental innovation in manufacturing processes, rather than research laboratory breakthroughs, produced this result.

    While US fossil fuel and electric utility industries regard variable renewable resources as dangerously “disruptive” and “intermittent”, another view is that they mitigate the climate and ecological disruptions and economic intermittencies resulting from energy business as usual. 

    The above costs and benefits may not, per se, justify a commitment to relying entirely on decentralized energy services for Davis, but the trends shaping California’s energy future may tip the balance in favor of moving in that direction.  Fossil costs are projected to steadily rise from current lows, even without counting myriad subsidies.  Future fuel prices are likely to be as volatile and unpredictable as in the past.  Nuclear power, with mega-project lead times exceeding ten years, even if cost-effective, cannot realistically be a factor in local integrated resource planning. 

    Meanwhile, the large and efficient scale of solar and wind equipment manufacturing results in incremental annual cost savings that are driving solar and wind equipment costs downward at a time when the cost of capital for project investments and system purchases is at an all-time low.   

    Fortunately, even as solar and wind technologies continue to thrive and improve, other new technologies are emerging and maturing.  Technologies are maturing that will enable energy consumers to produce, store and even sell electricity and to shape their energy usage profile to capture dollar savings.  These technologies will come into play as important and necessary elements of 21st century energy systems. 

    The choice before Davis

    What will it take for Davis to move toward low cost local energy supply resources?  We think it will take a willingness and commitment to be on the cutting edge of change, to rethink how our city’s electricity grid should operate to better enable these new green technologies. This can’t be done in a hurried fashionundefinedwe need a commitment to building a full understanding of the choices and the organization needed to execute a transition plan. We also need to be flexible in the face of this rapid evolution, to be able to adopt new and better technologies as they become available.

    Energy is essential to economic activity.  Increased reliance on locally supplied energy requires a new model for energy services.  In the next article in our series we will summarize the view from the cutting edge, including the progress being made in imagining, designing and integrating smaller local energy systems into the fabric of California’s, and the world’s, existing centralized electricity and fuel grids. 

    Gerry Braun and Lorenzo Kristov

    Gerry Braun is a founder and member of the Integrated Resources Network, a growing community of pragmatic innovators working for a smart and clean energy future.

    Lorenzo Kristov is a member of the California Independent System Operator team and a nationally recognized energy policy expert in the areas of market design and infrastructure planning.

  • 21 Dec 2014 3:55 PM | Anonymous

    Last year the Davis City Council funded work to evaluate the city's long-term electricity service options.  The matter was tabled as the June election drew near.  Then this summer the city  commissioned a resident satisfaction survey that, among other questions, asked if the city should form a municipal utility and purchase PG&E’s distribution system.[1] 46.5 percent of respondents said yes, 34.5 percent said no, and 19 percent were undecided. This result suggests it is time to resume serious public discussion of Davis’s energy future, based on relevant factual information and insights.


    In this article, the first of a planned series by local energy professionals, we briefly summarize electricity service options available to Davis and comment on questions raised by council members , advisory group members and other stakeholders.  We are familiar with studies commissioned by the city, but our primary reference is to our direct knowledge and other independent sources.  Our only pre-judgment is that the city's energy choices will be increasingly consequential and therefore deserve informed and thoughtful attention by city leaders and citizens.

     

    Various options exist for a local government to take an active role in providing local energy service.  The city’s consultants identified municipalization of the local electricity distribution grid as the city’s best option.  Municipalization involves setting up a publicly owned utility (POU) to take charge of power planning and retail power service.  The utility can take the form of either a city agency or one of several choices for an independent utility. For example Roseville’s electric utility is a city department; Sacramento’s is an independent special district.

     

    Publicly owned utilities collectively supply approximately 25 percent of electricity in California and own more than 40 percent of the high voltage electricity transmission capacity in and out of the state.

     

    Forming a publicly owned utility (POU) allows a local government to perform the same functions as a for-profit utility but at a smaller, and many would argue, more manageable level. Local governments may run the utility directly, and/or may sub-contract specialized functions. POUs are governed by city councils or elected boards, and not by theCalifornia Public Utility Commission (CPUC), making them more directly accountable to voters impacted by the utility.

     

    Another option is called community choice aggregation (CCA).  It involves taking responsibility for power procurement, but not power delivery, which would continue to be provided by the incumbent for-profit utility. CCA implementation is governed by state law and administered by the CPUC.

     

     

    There are three CCA entities in three California counties, Marin, Sonoma and San Francisco.  Marin’s CCA also serves the City of Richmond, in Contra Costa County. San Francisco’s CCA has been formally established but has not yet started operation. Several other California cities have voted to form or investigate formation of CCAs, including Lancaster, and Santa Cruz.

     

    Both POUs and CCAs offer market access to smaller local firms that deliver distributed generation, storage, renewable energy, and demand-side (efficiency, conservation, and demand response) technologies and practices.

     

    In December 2013 the city’s consultants concluded that a Davis POU would best meet the city council’s goals related to local control and cost and reliability of service.  This conclusion was based on comparing current costs and rates for existing public and for-profit utilities and estimating the specific cost of acquiring existing PG&E infrastructure.  Advisors pointed to the need for a bottom-up business plan that would account for annual costs specific to Davis’s unique customer base and energy usage profiles and patterns.

     

    City Council members recognized that operating a POU would involve the same costs and risks faced by existing POUs as well those to be encountered prior to start up.  Incumbent for-profit utilities wage costly, no-holds barred, political and electoral campaigns to prevent the formation of CCAs and POUs.  Elected officials are often targeted.  When the municipalization campaigns are successful, settlements of related disputes may or may not cover the costs incurred by the local jurisdictions.

     

    CCA customers can “opt out” and assert their right to return to service by the for-profit utility.  This is a serious concern, because the for-profit utility has considerable means and motivation to recapture its lost customers. The opt out rates for the Marin Clean Energy is 23%; Sonoma Clean Power’s opt out rate, initially 7%, is projected to level out below 20%.  

     

    A CCA has also limited flexibility to respond to price competition, primarily because CCAs only collect revenues for electricity procurement services; the incumbent utility still performs such functions as electricity delivery, metering and billing.  CCAs thus collect no revenues for these other functions and as a result are lightly staffed.  Also, they initially must purchase electricity from the same generation market that is being tapped by their for-profit competitor.  Even so, the Marin and Sonoma CCAs are below PG&E’s residential prices. 

     

    POUs are better equipped than CCA’s for price competition.  But their operations require a range of professional and organizational skill sets that do not arise spontaneously.  While organizational capacity is maturing, the POU must invest in staff development and/or outsource critical functions.  While mature POUs generally offer service at significantly lower prices than for-profit regional utilities, related savings would not be immediately realized by a new, stand-alone POU.

     

    Other options might be considered as well, such as leasing local power lines from PG&E or working collaboratively to set up small scale local grids able to exchange power with the regional utility, as has been proposed for the Hunters Point area of  San Francisco.  Not all of these choices are mutually exclusive, and some may attract partners from other municipalities or companies.

     

    As energy professionals and Davis residents, we are concerned that the costs and risks of doing nothing to change Davis’s approach to electricity supply may outweigh the costs and risks of taking action.  We are daily reminded of the profound and transformational implications of new smart and clean technologies for business as usual.  Fully realizing the economic and environmental benefits of smarter, more decentralized electricity systems may require decentralizing the management and financing of these systems. 

     

    Likewise, cities like Davis that have adopted climate action plans may need greater control over energy planning and operations to allow them the flexibility to implement the envisioned changes, for example, to dramatically expand local production of electricity for local consumption.

     

    Given the need to set examples of workable solutions to the problem of managing climate change worldwide, we feel a sense of urgency in re-opening broad public discussion of Davis’s energy future.  The next article in this series will outline the on-going and future changes in the electricity sector that create opportunities and options for Davis.

     

    We look forward to contributing to a vigorous, technically and economically well-informed debate about the options.

     

    Gerry Braun and Richard McCann

    Gerry Braun is a founder and member of the Integrated Resources Network, a growing community of pragmatic innovators working for a smart and clean energy future.

    Richard McCann is a co-founder and principal with M.CUBED, a policy analysis consultancy specializing in energy, climate change, environmental and water issues.



    [1] http://www.davisenterprise.com/local-news/survey-finds-well-of-support-for-public-power/

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