New ‘Green’ Law Is Union Giveaway

OCT. 4, 2010

By WAYNE LUSVARDI

Will a new law mandating green power storage facilities along green pathway electric transmission lines paradoxically result in short circuiting green power in California?

Or is this new law mostly symbolic to help Jerry Brown’s campaign for governor with help from an energy storage company that is pushing for government help for an uncompetitive technology?

This new law may also be a classic test of whether environmental lawsuits are used to eliminate market competition to the advantage of one energy storage technology over another at the expense of the larger public good and have little to do with the environment.

For sure, this new law will create massive subsidies for green power and energy storage technologies employed by union workers that will replace non-union jobs in the conventional energy industry.

AB2514 Mandates Storage

Recently, Gov. Arnold Schwarzenegger signed a new bill (AB2514) mandating storage of renewable power from wind and solar farms in facilities integrated into the transmission grid system for use when the wind doesn’t blow and the sun doesn’t shine. This new law will be initially imposed on public regulated utilities (Edison, PG&E) but will eventually be mandated for municipal electrical utilities as well.

The reason for storage of green power is that it is so variable that the entire southwestern U.S. would have to become one huge regional electric grid to make it work. If wind is not blowing in Edison’s massive proposed new wind farm in Kern County but it is blowing in, say, Oregon, then that is where wind power will come from (via the Pacific Intertie). But then the advertisement that green power will create jobs in California becomes tricky. Without storage capacity, Texas, Idaho or Oregon may be generating wind or solar power for California and vice versa depending on weather factors.  But with in-line grid storage California can supposedly generate its own green power, green union jobs, and green taxes to reduce its seemingly perpetual state budget deficit. But Californians have learned that for every energy utopia promised by politicians there is an energy crisis out there lurking.

FERC: A Battery is a Transmission Line

What’s behind California’s new energy storage law is an order by the Federal Energy Regulatory Commission (FERC), in response to California-based Western Grid Development’s request, that batteries used to store electricity from the transmission system be considered transmission facilities themselves.  Western Grid had proposed to install many small energy storage facilities along the path of new green transmission lines that would add up to a large amount of overall storage.

Following FERC’s order in July of this year, the U.S. Senate introduced the Storage 2010 Act that will provide up to $1.5 billion in tax credits to energy storage projects connected with intermittent power sources such as wind and solar.  California’s AB2514 is just conforming to Federal mandates and incentives.

Storage Makes Green Power Green (as in money)

The stored electricity could be used to meet peak time demands, to charge electric car batteries, or to help regulate the grid. But its primary use is to allow wind and solar power developers to sell their expensive power at peak times for many more times the price thus making green power competitive in the wholesale peak and spot energy markets.

Obama Rate Hike in Face of Prop 23

The FERC order could compel the California Independent System Operator (CAISO) to pay a 195 basis point adder to Western Grid’s rate of return conditional upon receiving joint approval of CAISO.  In other words, the Obama-controlled FERC is ordering a rate increase to pay for green power storage to be passed through to California electricity ratepayers at the same time that Prop 23 is on the ballot to suspend green power in California as a jobs killer and electricity rate escalator during a prolonged economic depression. And for the most part the public isn’t being informed.

The CAISO opposed the order on the grounds that FERC had rejected a similar request by the Nevada Hydro Company for its proposed Lake Elsinore Advanced Pump Storage Project in Riverside County.

Greens Blocked Hydropower Projects

FERC, the CPUC, and environmentalists have shot down many of California’s energy storage projects.  A proposal for a pump-back water reservoir energy storage project in the City of Industry in the Los Angeles area has been tried since 1972. In 2000, the City of Industry bought 5,700 acres in Tonner Canyon near the Metro Water District’s Diemer Filtration Plant in Yorba Linda.  But the project has never been able to gain any momentum due to environmental opposition.

In Lake Elsinore in Riverside County, the proposal to build a pumped storage facility has been in the works since 1987.  The CPUC rejected the proposed 32-mile power line from the proposed reservoir through the Cleveland National Forest to Escondido and the Camp Pendleton Marine Base. The Center for Biological Diversity is strongly opposed to this project.  Oddly, however, the center is also opposed to Prop 23 that would put a halt to green power projects blighting the deserts with ugly wind farms and green-path transmission lines that go through pristine deserts or national forests.

John Buse, the Bio-Diversity Center’s attorney, is quoted as saying “Certainly, I think the public can tolerate some of these transmission lines on public land if they’re needed, but here we have pretty good evidence that this isn’t needed,” he said. “We’re pretty skeptical of the stated need for these facilities.” But then where is their support for Prop 23 that would at least temporarily stop such projects?

Will environmental organizations be rushing to vote YES on Prop 23 to stop the environmental degradation from energy storage projects? Don’t hold your breath.  Environmental organizations are all about political power and union jobs not green power or environmental protection.

Energy Storage Technologies

Because of environmental opposition to reservoir energy storage projects, Compressed Air Energy Storage (CAE) technology is being considered as an alternative.  The Federal Energy Administration has awarded $25 million in federal stimulus funds for a 300-megawatt compressed air energy storage project using a salt porous rock formation near Bakersfield for storage.

But compressed air energy projects use a peaking gas turbine plant that environmentalists typically don’t like.  And if there were no mines or caverns to store compressed air in, such underground storage basins would have to be excavated along with any impacts to underground water supplies and habitats.

Although actual costs to store green power are unknowable, all the other storage technologies out there are many times the cost of either reservoir storage or compressed air systems.  But the two cheapest technologies are the most environmentally unfriendly and conversely all the others are more environmentally friendly but are the most costly. See chart.

Is Brown Green?

Attorney General Jerry Brown has been attributing AB2514 to efforts by he and Assemblywoman Nancy Skinner, D-Oakland, who authored the bill and touts herself as an environmentalist.  However, the largest contributors to her last re-election campaign unsurprisingly were electrical workers unions and general trade unions. Environmentalism serves as a cover for union labor interests.

According to online sources, AB2514 came into being due to lobbying by Edward G. Cazalet, head of Megawatt Energy Farms, which proposes to develop an inside-the-fence Independent Storage Provider Concept system.

But will green energy storage work?  Reportedly, the best battery system out there today costs about $0.80 per kilowatt hour. So the U.S. Department of Energy, FERC, the CPUC, Gubernatorial Candidate Jerry Brown, State Assemblywomen Nancy Skinner and the state Legislature have to reduce costs by a factor of eight to make it work.  That $0.70 per kilowatt-hour cost spread is a subsidy to unions that electricity ratepayers will be paying for all in the name of green power.  To make it work the real cost of peak time power including all subsidies and stimuli will have to rise to levels not seen since the California Energy Crisis of 2001.  Green power and green power storage are being made to work no matter the cost.

Stop Dirty Coal or Dirty Pol?

A slogan for the anti-Prop 23 campaigns is: “Stop Dirty Coal.”  But those proponents of Prop 23 to halt Green Power might use their own counter slogan: “Stop Dirty Pols.”

To make affordable power you don’t have to pump hydro or build complex air compressor-gas turbine plants that store compressed air in massive underground caverns or man-made subsurface basins that alter the environment.  More dams and hydro-power should be built for peak energy load times, especially when the wind doesn’t blow and the sun doesn’t shine. Hydro is nearly instantaneous and can respond to energy volatilities.  A federal study indicated that of the 800 federal dams a significant number have untapped hydro storage capacity. Exploiting existing dams for energy storage might lessen environmental impacts. But hydro-power still doesn’t count as green power in California.

If the process were understood by the public, they would realize that California electricity could be made far cheaper if it continued to rely on scheduled use of coal-fired power imported from other states that create no air pollution in highly dense cities along the coast with peaking demands met by hydro-power.  The very expensive and dirty option of natural gas would be eventually mothballed and Californians would be able to make their house payments and use their air conditioners.

On Oct. 2, a mortgage firm sponsored the Help and Hope Foreclosure Prevention and Home Buyer Fair with 30,000 in attendance with manufactured scenes out of the 1930s depression optimally timed before elections. If you asked those distressed homeowners who attended if they would rather have cheap coal power that pollutes air in Utah but allows them to run their air conditioner and make their mortgage payment or very expensive green power that cleans the air in the desert and ends up so that they can’t run their A/C or make their mortgage payment in the remote chance of a union job, what do you think they would vote for?