MISSION IMPOSSIBLE FOR CITY COMPLIANCE WITH GREEN POWER MANDATES

‘Whoever called politics "the art of the possible" must have had a strange idea of what is possible or a strange idea of politics, where the impossible is one of the biggest vote-getters. People can get the possible on their own.  Politicians have to be able to offer the voters something that they cannot get on their own. The impossible fills that bill perfectly. As a noted economist has pointed out, nothing "could prevent the California electorate from simultaneously demanding low electricity prices and no new generating plants while using ever increasing amounts of electricity.” You want the impossible? You got it.’  - Economist Tom Sowell

Pasadena Star News staff writer Dan Abendshein’s article “Pasadena Volunteer Committee Creating Energy Road Map” (Dec. 28) contains several gaps which need to be filled in order to adequately inform the community, and most respectfully Mr. Abendshein, as to what is really going on with long-range energy planning in Pasadena.  Mr. Abendshein can’t be faulted for these gaps given his fledging status as a new writer handed a mission impossible to understand highly improbable “Green Power” mandates for California ’s cities. Abendsheim's article is here:
http://www.pasadenastarnews.com/news/ci_11324731.          

The “volunteer committee” referred to in the article is the Advisory Group to the Department of Water and Power’s 20-year Integrated Resource Plan (IRP) which is mandated on all public and municipal utilities. Here are the members of the Advisory Committee which were omitted in the article: Sid Tyler (Council member); Rudolph Carrasco (associate director with Harambee Christian Family Center and columnist at San Gabriel Valley Newspaper Group); Don Bremner (Sierra Club); Don McIntyre (former mayor); George Falardeau (Art Center College of Design); Dr. Carol Carmichael (environmentalist, Caltech); Paul Little (Chamber of Commerce); Bernard Melekian (Police Chief; Interim City Manager); Rod Olguin (City Planning Dept.); and Phyllis Currie (Manager, PWP). 

Assigned to assist this group in developing the IRP is Aldyn Hoekstra, a consultant with Pace Global Energy.  Hoekstra was formerly in Strategy and Risk Management for Sempra Energy, among several other consulting firms, and holds a master’s degree from Stanford in Engineering Economic Systems. As my East Pasadena compatriot Jeff Rupp, former head of the California Department of Transportation (CalTrans), reminded me about consultants, however – “a consultant is a person who borrows your watch to tell you what time it is.”

What Rupp is alluding to is City compliance with Assembly Bill 32 – the Global Warming Solutions Act of 2006 – which mandates milestones for adopting plans and implementing a reduction in Green House Gases (GHG) or entering into what is called a “cap and trade” program in lieu of GHG reductions.  Under AB 32 each electric utility, public or municipal, must adopt a plan to reduce Green House Gases to 1990 levels by the year 2020.  That plan must be in place by January 1, 2009.  The City of Pasadena already has a proposed Integrated Resource Plan which merely requires sanctification by a consultant.   
The revised Integrated Resource Plan for Pasadena is proposing a shift to a mix of wind, solar and geothermal energy resources for 10% of the City’s electricity by the year 2012; and for 25% by 2030. AB 32 calls for what seems to be an impossible 50% to 75% shift by the year 2050.

The Star News article did not mention that the head of the Environmental Economics Program at Harvard University no less has issued a blistering critique of AB 32 - read here:
http://weblog.signonsandiego.com/weblogs/afb/archives/029734.html 
Also the lead scientist for the Air Resources Board who is charged with developing standards for implementation of AB 32 with respect to diesel emissions has been found to have phony credentials - read here: http://weblog.signonsandiego.com/weblogs/afb/archives/030175.html   

Pasadena reportedly imports 68% of its electricity from a “dirty” coal fired power plant in Utah . The remainder of its power is from its aging power plant and two newer small peaker plants at its Glenarm Avenue facility.  

Consultant Hoekstra is recommending that Pasadena replace its old natural gas power plant at Glenarm Avenue and the entrance to the Pasadena freeway. What new energy technology would be used in a retrofitted power plant that would meet “Green Power” prerequisites is uncertain and dubious. A new transmission line link is also mentioned in lieu of retrofitting the Glenarm power plant to reduce GHG emissions.     

As Mr. Abendshein wrote in his article:

To do so, the city would either need to update the power plants or embark on an expensive project to build an underground power line to bring electricity from the eastern side to the west - at a cost of about $140 million. The city has also looked at partnering with Los Angeles or Burbank and Glendale to link power lines together to the western part of the city. But the plan would not be viable, said Currie. "It costs too much," she said, "and the regulatory issues are significant."

Jeff Rupp pointed out that the Gold Line corridor could be used as a right of way for any power line to bring power from east to west.  But the permitting issues would likely be forboding with the MTA. And MTA would want to charge a "rent" for use of the right of way.   

It is suggested that PWP explore using new ceramic technology for any underground cable or overhead power line which might reduce transmission line losses.  New power cable technology by Mercury Cable Company in Dana Point may be promising for Pasadena, as reportedly such technology has passed a pilot test by the TVA.   Pasadena perhaps might be able to get large reductions in energy if it also considered using such new cable technology for electric distribution lines all over the city.

The problem with Green Power mandates that is glossed over in the Star News article is the likely large rate increases that will result. The cost projections for implementing AB 32 were devised during the economic bubble, which we are now learning also was also a perceptual bubble which distorted our ability to think realistically about financing things such as Green Power.  Consultants in New York City forecasted that a 10% shift to Green Power would result in a 40% rate increase.  That is why the City of Durango, California has recently called for eliminating Green Power mandates during an economic recession even if such plans wouldn’t be implemented until 2012. Shifting to Green Power is a risky policy. But Green Power is a fait acomplis with the incoming Obama administration.  

For example, if we are able to reduce the City’s energy usage or shift to cleaner but more expensive sources of power, what will the City do with any “stranded asset” problem which might arise.  A “stranded asset” is a bad investment that still needs to be paid off – such as a coal-fired power plant in Utah, an old gas-fired power plant on Glenarm Avenue, or existing transmission and distribution lines.  And to be prudent shouldn’t the City be considering buying insurance (a hedge) for any Green Power premium?  

In closing, Jeff Rupp aptly summarized the near impossible mission of the IRP Advisory Group in an email he sent me earlier this week: 

If the City wants to be a leader in the green movement, perhaps they could get a consultant and an advisory committee that starts out with the premise “How can we be green and not screw the citizens (excuse me, stakeholders) with needless rate increases”—Now that would be leadership!”

 

 

Comments

[Erica Chisholm]

Hi, Wayne. Your numbers on the city's power content are a little off. Here is an accurate breakdown of Pasadena's power resources as they currently stand:

http://cityofpasadena.net/waterandpower/pcl/

Customers receive a Power Content Label with their bill on a quarterly basis.

Regards --