At its Sept. 4 meeting, the Sacramento Municipal Utility District deferred deploying batteries along its electric grid in compliance with Assembly Bill 2514 of 2010. The reason: energy storage was not economically feasible. (See p. 93 and p. 143 of the Board Agenda)

The action was a reversal for Gov. Jerry Brown. While attorney general, he co-wrote AB2514 with Assemblywoman Nancy Skinner, D-Berkeley. The bill was signed into law by Gov. Arnold Schwarzenegger.

Under AB2514, public utilities must establish “procurement targets” for energy storage projects by Oct. 1, 2014.  The bill included targets for energy storage from batteries, hydroelectric storage, thermal storage, flywheel technology and compressed air energy storage.

But such targets were only required after considering “viability, cost-effectiveness, and a variety of possible policies to encourage the cost-effective deployment of energy storage systems,” in the board’s summary of the AB2514 requirements.

Battery storage helps make more viable such renewable energy sources as solar, storing power for use when there’s no sunlight; and wind, storing power for when there’s no wind.

SMUD staff recommended that its Board of Directors “defer establishing energy storage targets until more viable and cost-effective energy storage systems become available.”

It wasn’t a casual decision by SMUD to defer any rollout of battery storage.  AB2514 requires re-evaluations of the feasibility of battery storage every three years in perpetuity at a cost of $1 million per year for each public utility.  SMUD had invested over $30 million since 2008 in research to deploy batteries along its transmission lines to facilitate green power.

Batteries 

The AB2514 SMUD Storage Procurement Report of Aug. 28, 2014, included a technical and scientific overview of each energy-storage technology.  Battery storage technology is reported to cost up to $950 per kilowatt hour for the same electricity for which California residential electric customers currently pay about $0.10 to $0.20 (10 to 20 cents) per kilowatt hour (see p. 118 of the SMUD Report).

Left unsaid was that cost-effective utility-scale battery storage may not come about for another 50 years — or ever.  A recent analysis by John Morgan, adjunct professor in the School of Electrical Engineering at RMIT University in Australia, showed that battery storage makes wind energy and solar power even less economically feasible than they already are.

In late July 2014, researchers at Stanford University, including former Obama Secretary of Energy Steven Chu, announced a “holy grail” battery breakthrough. But John Goodenough, part of the team that invented the original lithium-ion battery in the 1970s, was skeptical. He said, “It is not clear he has achieved that goal with a sufficiently cheap process.”

Consumers are used to fast reductions in the cost of computing because of Moore’s Law, under which processing power doubles every 12 to 18 months. But that just hasn’t happened with batteries, where progress comparatively has been at a turtle’s pace.

AB2514 supported by unions and green energy interests

Back in 2010, Brown and Skinner were joined in their support of AB2514 by the California Labor Federation, Los Angeles Mayor Villaragosa, the California Public Utilities Commission and 54 special-interest group organizations involved in energy storage.

The only cited opposition was by the California Manufacturers and Technology Corporation. But the Senate analysis warned of problems that would persist:

“The most common form of energy storage device in use today is batteries. However, there are no commercially available batteries that could cost-effectively store the large amounts of electricity that can be produced by large-scale wind farms or solar facilities.”

In the coming weeks, CalWatchdog.com will be checking out some of the other energy producers in the state to see how they are dealing with AB2514.

One preliminary report: Despite SMUD’s problems, the Los Angeles Department of Water and Power has established energy storage targets of 21 megawatts by 2016 and 154 megawatts by 2021, but has not yet evaluated the potential cost.

Shiroma, a Democrat, was an outspoken opponent of 2010’s Proposition 23, which would have suspended AB 32, California’s Global Warming Solutions Act of 2006, until unemployment in the state dropped to 5.5 percent. Shiroma was also Board Chairwoman of the Sacramento Municipal Utilities District.

A 2009 study of AB 32, “Cost of AB 32 on California Small Businesses,” was by two Cal State Sacramento economists, Sanjay B. Varshney and Dennis H. Tootelian. It found that AB 32 would kill 1 million jobs by 2020.

On farming specifically, the study found that small farm businesses would be hit with $498 million in additional costs for AB 32 compliance due to increased prices for fuel, machinery, fertilizer, etc. Farm income would decline by $195 million. Farm workers would lose $101 million in income. And 3,671 jobs at small farms would be killed.

Despite such warnings, Prop. 23 was opposed by then-Gov. Arnold Schwarzenegger, then-gubernatorial candidate Jerry Brown and most of the state’s political establishment.

In her comments at a 2010 Sacramento event, Genevieve Shiroma, also president of the board of directors for the Sacramento Municipal Utilities District, said the utility helps to advance economic development and create jobs through its environmental programs, the Sacramento Press reported in 2010, in “Johnson, SMUD official protest Prop. 23.”

Mayor Kevin Johnson, Shiroma, and other representatives from public agencies and businesses receiving green subsidies said that Prop. 23 would harm the environment, green businesses and air quality.

“AB 32 has provided the vital regulatory certainty needed for venture capital investment, entrepreneurial innovation and market development to prosper in California,” Shiroma said while President of the Board of Directors for SMUD.

If Shirmoa had taken a different position on Prop. 23, it’s doubtful Brown would have re-appointed her as board chair.

After a highly funded demonization campaign, voters roundly rejected AB 23, 62 percent to 38 percent.

Part 1 of the ARLB series, What is the Agricultural Labor Relations Board, can be found here.

Part 2 of the series is background on Shiroma, and can be found here.

This is part 2 of a series on the ALRB. Part 1 is here.

Genevieve Shiroma, chair of California’s Agricultural Labor Relations Board, which oversees the relationship between farms and farm workers, grew up the daughter of a farm worker in San Joaquin County.

Staying close to her farm roots, according to AllGov California she earned her “associate of arts degree in math and science from San Joaquin Delta College in 1974.” After which she trekked only 70 miles away and in 1978 earned her bachelor of science degree in Materials Science and Engineering from the University of California, Davis, one of the state’s premier agricultural schools. She then joined CARB “as an air quality engineer. She worked there for 21 years, eventually becoming chief of the Air Quality Measures Branch.”

It was a natural step for her to chair the board itself, a post Gov. Gray Davis appointed her to in 1999. That position expired in 2005. In 2006, Gov. Arnold Schwarzenegger appointed her as a regular board member. And in 2011, Gov. Jerry Brown again appointed her as chair, making her the longest-serving current member of the ALRB.

ALRB

The five-member board was created in 1975 to implement the Agricultural Labor Relations Act, which Brown signed into law that year. The board’s authority is divided between the five board members and a General Counsel, all appointed by the governor. The ALRA stipulates: 

“It is hereby stated to be the policy of the State of California to encourage and protect the right of agricultural employees to full freedom of association, self-organization, and designation of representatives of their own choosing, to negotiate the terms and conditions of their employment, and to be free from the interference, restraint, or coercion of employers of labor….”

According to its website, the ALRB is:

1. “[R]esponsible for the prevention of those practices which the Act declares to be impediments to the free exercise of employee rights…”

2. “[R]esponsible for conducting elections to determine whether a majority of the employees of an agricultural employer wishes to be represented by a labor organization, whether they wish to continue to be represented by that labor organization, a rival labor organization or no labor organization at all.”

SMUD

In 1998, voters first elected Shiroma to the board of the Sacramento Municipal Utilities District, where she currently is vice president. The board elected her its president in 2002, 2006 and 2010. Currently she serves as its vice president.

Someone in a political position not surprisingly gets involved in politics. In local Sacramento politics, even more than in California, the Democratic Party dominates. She is a sponsor of the Harry S. Truman Democratic Club.

In 2006, as president of the board Shiroma led the battle for Measure L, which would have allowed the public utility to annex some of Pacific Gas & Electric’s private property in Yolo County. It lost, 61 percent to 39 percent.

Electric Utility Week reported on Nov. 13, 2006:

“SMUD’s initiative on the November 7 ballot would have allowed the muni to annex about 70,000 PG&E customers in Yolo County in Northern California. PG&E spent more than $10 million to defeat the annexation, while the pro-annexation campaign spent about $1 million.”

The pro-annexation campaign was called SMUD Customers Say YES to Low Rates, and was led by Shiroma and other SMUD board members. The Sacramento Bee reported on Jan. 2, 2006:

“The group has hired political consultant Richie Ross, Shiroma said Friday.”

Ross is one of the most influential strategists in Sacramento. A strike organizer for United Farm Workers longtime President Cesar Chavez, Ross now is a registered lobbyist for the UFW, whose cases go before the ALRB.

(The Electric Utility Week and Bee articles no longer are online, but copies of them are in this document.)

Looking into the ALRB

One case involving the UFW now before the board concerns the farm employees of Gerawan Farming, one of the Central Valley’s largest growers of peaches, plums, nectarines and grapes. As I have reported in a series of articles, the workers have been fighting off unionization by the UFW.

Briefly, the Gerawan Farming workers have spent months protesting the UFW takeover attempt. The UFW has maintained that a unionization vote by the workers more than 20 years ago still is binding, and the workers must begin paying union dues.

The farm workers, led by farm worker Silvia Lopez, have insisted that the union has done nothing at all for more than two decades. Lopez personally led a petition drive for a decertification vote.

In response, the ALRB charged the company, Gerawan Farming, with circulating the petition among its employees. However, Lopez and other employees insist that they, not Gerawan, circulated the petitions. Based in part on the publicity from my articles, the ALRB conceded and granted the farm workers the right to vote on the union contract.

Considering Shiroma’s background and the controversies before the ALRB, I emailed her some questions. She graciously replied.

Q & A

Here is my inquiry to Shiroma, with the verbatim questions and answers:

“I am submitting the following questions and will follow up with a phone call.

“This Los Angeles Times article (below) mentions that Fresno area farming owner Dan Gerawan filed a complaint against the Board for members having accepted outside income when the law prohibits ALRB board members from receiving outside income.

“http://articles.latimes.com/2004/nov/11/local/me-boards11/2

“Though the primary target of the complaint appeared to be Board Member Daniel Zingale, the article mentions that you were also receiving outside income.

“The LATimes said: ‘Gerawan said he has his own attorney general’s opinion affirming the constitutionality of a ban on board members working at outside jobs. He is using that opinion in pursuing his case against Zingale. Zingale is not the only Agricultural Labor Relations Board member with outside employment. Bustamante works as a public relations consultant, and Shiroma is an elected member of the Sacramento Municipal Utilities District.’

“I have these questions:

Q 1: “Were you in fact receiving income outside of your ALRB position at that time? If so, please describe the type and amount of income.
”

Shiroma: “No, I have not and do not receive outside income since first being appointed to the Board in 1999.”

Q 2: “If so, did you stop receiving that income? ”

Shiroma: “See response to 1. above.”

Q 3: “And, if so, did you stop receiving that income subsequent to Dan Gerawan’s complaint?
”

Shiroma: “See response to 1. above.”

Q 4: “Finally, do you feel that Gerawan’s complaint, and its impact on ALRB board members, could in any way prejudice a member about matters related to Gerawan or its employees?

Shiroma: “No.”

Q 5: “Also, in these Board minutes

http://www.alrb.ca.gov/content/pdfs/meetings/minutes/2005/minutes050405.pdf

you and current board member Cathryn Rivera-Hernande voted to allow up to $50,000 to be spent for the legal defense of Board Member Zingale for having accepted outside income, in violation of state law (which both he, the Attorney General, and the governor admitted he was doing).

“In hindsight, as the Chairwoman of ALRB, then and currently, do you feel this was a proper expenditure of public funds?”

Shiroma: “Yes. Government Code 995 provides that, upon the request of an employee or former employee, a public entity shall(emphasis added) provide for the defense of any civil action or proceeding brought against him, in his official or individual capacity or both, on account of an act or omission in the scope of his employment as an employee of the public entity.”

Q 6: “Shouldn’t Zingale have paid for this himself?”

Shiroma: “See above.”

Q 7: “Finally, given that Dan Gerawan indirectly caused this expenditure approved by you and Board Member Rivera-Hernandez, do you still feel that the ALRB of Directors can act without bias in matters related to Gerawan?”

Shiroma: “Yes.”

————-

Update: Shiroma’s positions on AB 32 and Proposition 23 are reported here.

Ahhh. SMUD wants to prepare rate payers for the future. I know that I feel better about my $370 electric bill.

This is the garbage bureaucrats think will pass muster with rate payers. Last year at this time, my electric bill was about $100 less. The same has happened with my PG&E bill – both are inexplicably higher, and during a much warmer, dryer winter.

For your reading pleasure, I’ve copied the entire “2012 Rate Restructuring: frequently asked questions.” I’ve added a few of my own thoughts and comments (in red), where the SMUD creative writing surpassed even Harlequin Romance novel standards.

Reader Warning: Be careful – you may need a barf bag before you finish. I hope SMUD didn’t pay a PR firm to write this drivel.

“Rate Restructuring,” in the words of SMUD:

Why is SMUD proposing to restructure its rates? 
SMUD wants its rates and charges to better align with the costs they are meant to reflect, including the cost of electricity and the cost of maintaining the infrastructure that supports a reliable power-delivery system. Proposed changes would move charges closer to that ideal. The “ideal” of a reliable power delivery system involves proposed changes that involve higher rates. I get it. 

For small commercial customers, a key part of the proposed restructuring is to have rates better reflect the cost of electricity when it is used. This would encourage customers to reduce usage during the summertime hours of peak demand, when electricity is most expensive. Read the general manager’s report on rates and services.

The small commercial customer will take the biggest hit – as usual. They don’t have high-paid lobbyists or big unions to fight back. And don’t forget the rate payers in higher socioeconomic zip code areas.

Given all of the subsidies, discount programs and free government stuff to low-income households, the middle class neighborhoods are probably bringing home a great deal less – especially since we are taxed on our earned income.

Is SMUD doing this to increase its revenues?
No. (Of course not) The proposed restructuring is designed to be “revenue neutral” for SMUD. It would not be a general rate increase, and it would not produce any increase in SMUD revenues. However, the restructuring could impact some customers because components of the rates are changing. SMUD has done it this way, and used this creative language so that no one will notice that they are not subject to CPUC oversight with a general rate case hearing… not that anyone should ever be subject to CPUC oversight…

“Revenue neutral” is secret code language for we are hiding the increase elsewhere, but rest assured, we will eventually collect. 

What are the most significant elements of SMUD’s proposal to restructure rates?
SMUD is proposing small increases in fixed monthly service charges to recover a higher proportion of the total infrastructure costs associated with providing service to residential and small commercial customers. These costs include equipment such as wires, poles, transformers, and substations. (Medium and large commercial customers already pay closer to their proportionate share of these fixed costs in monthly charges that don’t depend on how much electricity they use.) You won’t notice a “small increase,” right?

To offset the increase in the fixed service charge and minimize impacts on residential customers, SMUD would slightly reduce its kilowatt-hour prices for electricity usage. In addition, SMUD would shorten the summer billing season from six months to four months (June through September). Rates per kWh will continue to be higher in the summer billing season than the rest of the year, reflecting market costs. Only a utility bureaucracy can “shorten the summer billing season.” Even Mother Nature can’t do that.

For all small commercial customers, SMUD is proposing “time-of-use” rates. Customers would be charged more for power between the peak usage hours of 3 and 6 p.m. on weekdays in summer, when electricity is most expensive. SMUD would shorten the summer billing season and reduce the kWh price of electricity on all “off peak” hours.
SMUD proposes to institute a late fee of 1.5 percent on the current amount due if SMUD does not receive full payment within three business days of the due date on the bill. And if you don’t pay within 3 business days, Rocko and Guido might make a collection visit. 

How would rate restructuring affect customers’ bills? Duh – the bills are going up, and  some by as much as 50 percent. Just ask those small commercial customers…
Most customers would see very little change in their electricity bills on an annual basis, and SMUD rates would remain more than 20 percent lower than PG&E’s electricity rates on average.

SMUD projects that in 2012 the average bill impact for approximately 90 percent of all residential customers will be less than $2 a month. Some residential customers would save money on an annual basis. Eighty-seven percent of residential customers who have electric heat would see bill changes averaging less than $2 a month. Who will save money? Low-income rate payers? Solar customers? Government offices? 

Seventy-five percent of small commercial customers (drawing 21 to 299 kilowatts) and 7.5 percent of very small commercial customers (drawing less than 21 kW) would save money in 2012 under the proposed changes. For 95 percent of the very small commercial customers, bill impacts would be less than $10 a month on an annual basis. My husband owns several small commercial warehouses – his SMUD rate just went up this billing cycle by 50 percent, and one-half of the buildings are empty. 

For information on projected bill impacts beyond 2012, see Addendum 2 to theGeneral Manager’s Report and Recommendation on Rates and Services.

What types of customers are apt to have higher electric bills under the proposal?
Small and very small commercial customers who use a lot of power during the peak hours of 3 to 6 p.m. on weekdays in the summer billing season (June through September) – when electricity is most expensive – could have higher bills on an annual basis unless they shift power consumption to off-peak hours. What about certain zip codes, and small business owners with empty buildings? 

Residential customers who have gas heat and use very little electricity may pay slightly higher bills because of a proposed increase in the fixed monthly charge, which is designed to recover more of the fixed costs of the infrastructure for the power delivery system.  For these customers, the maximum impact in 2012 would be $2.80 a month. Brilliant! Penalize customers who use less electricity.

Eighty-seven percent of residential customers who have electric heat would see bill changes averaging less than $2 a month.

To encourage energy efficiency, customers on the Energy Assistance Program Rate (a discount rate for qualifying low-income residents) will pay the standard rate for electricity use that exceeds their “base usage” plus 600 kilwatt-hours a month. (Base usage is 700 kWh in the summer billing season and 620 kWh the rest of the year for customers with gas heat.)

How would low-income customers on the Energy Assistance Program Rate be affected by the proposal? blah blah blah blah blah
SMUD projects that 90 percent of these customers would save money in 2012, while the 10 percent who have energy use that exceeds the discount cap will see their bills go up if they don’t reduce their power usage. Of course they will save because I am going to be paying a bigger part of their share, along with very small and small businesses.

Customers on the low-income rate would continue to get a 35 percent discount on base electricity usage and a 30 percent discount on up to 600 kWh of additional (“base-plus”) electricity usage in any given month. Hey! I am a member of the historically low-paid media… what about a discount for us? For electricity usage in excess of that, customers would pay the standard residential rate. This proposal was designed to encourage energy efficiency. (Base usage is 700 kWh in the summer billing season and 620 kWh the rest of the year for customers with gas heat.) These customers would see no change in their fixed monthly service charge of $3.50 in 2012.

Beginning in 2013, the fixed monthly charge would increase $1 each year, topping out at $8.50 in 2017, and there would be a corresponding decrease in kwh charges for electricity use. For information on projected bill impacts beyond 2012, see Addendum 2 to the General Manager’s Report and Recommendation on Rates and Services.

Skip this section – this will only make you crazy.

Overall, proposed changes in Energy Assistance Program Rates would be “revenue neutral” for SMUD, meaning the changes would neither increase nor reduce the revenue SMUD collects from this group of customers.

Will SMUD do anything to help customers who might have higher bills as a result of rate restructuring?
SMUD encourages customers to take advantage of its wide range of programs to improve energy efficiency. For all residential customers, SMUD has – among other things – a comprehensive, whole-house solution called the Home Performance Program, rebates on energy-efficient appliances, and loans for investing in improvements such as dual-pane windows. For qualifying low-income customers, SMUD also offers special efficiency programs such as home weatherization, in addition to discounted rates.

For commercial customers, SMUD offers energy audits, product rebates, energy tracking services and help with retrofit projects, among other things. For more information, click here. And you can finance the upgrade and energy retrofit costs – for a small fee, of course…

SMUD Loan terms (link here)… 

• We offer secured financing at a fixed interest rate of 8.75 percent. (Wow! calling Rocko and Guido…)
• We charge an application fee of $200 per loan. We will return this fee if we decline the application. 
• Generally, we make loans for up to 10 years or, the remaining term of any senior lien…

How is SMUD letting customers know about the proposed rate restructuring? 
Complete information on the proposal is posted on smud.org. In addition, SMUD is conducting a public outreach campaign to explain the proposal to customers. 

The campaign includes approximately 100 presentations for business associations, civic organizations and neighborhood groups. (To request a presentation, contact Rosanna Herber at SMUD, 916-732-5850 orrherber@smud.org.) Media outreach, print ads and bill inserts are part of the effort. Contact Rosanna Herber? The bumptious, browbeating, Sacramento activist Rosanna Herber? I’ve been a party to a few of Herber’s presentations … I don’t see the soft-sell approach here. (local knowledge disclaimer)

How can customers comment on the proposal or get answers to their questions about rate restructuring?
SMUD welcomes feedback from customers. Customers may submit written comments through Aug. 4 to rates@smud.org or to Rates Administrator Rob Landon, Mail Stop A451, SMUD, P.O. Box 15830, Sacramento, CA 95852-1830. Dear Rob, *$!!@*%$? … Sincerely, Katy

Customers who have questions or would like to request a hard copy of the General Manager’s Report and Recommendation on Rates and Services may call the rates hotline, (916) 732-6222, or e-mail rates@smud.org.

When will the SMUD Board of Directors decide on restructuring, and when will changes take effect?
The SMUD Board is expected to vote on rate restructuring on Thursday Aug. 4 at at 6 p.m. in the SMUD Headquarters Auditorium. Most of the changes will go into effect on Jan. 1, 2012. When was that meeting? I don’t recall the “public outreach” on that one… did I miss the memo, or the notice in my bill, or the public meeting with my neighborhood association which removed me from its email list?

Why is SMUD proposing to increase the monthly service charge?
SMUD needs to increase the fixed monthly service charge for residential and small commercial customers because the current charge does not cover the true cost of maintaining the infrastructure that enables reliable power delivery through a robust electric grid. This includes the cost of poles, wires, transformers, and substations, which must be covered even if an individual customer is not using any electricity. “A robust electric grid” which the Legislature and Governor have just sliced and diced with the Renewable Portfolio Standard, requiring 33 percent renewable energy from wind, solar, biomass, and geothermal. Hey Al Gore – the planet does not have a fever… it’s leaders have a spending and a serious B.S. proble

Okay – I am not going to subject you to the rest. If you are a glutton for punishment and have no life, here is the link to the rest of the drivel.

However, I could not resist the final question:

Why is SMUD changing some of its terminology for rates?
SMUD is changing some of its rate terminology in an effort to better define for customers what they are paying for and why, to introduce customers to some new concepts, and to prepare for the future. (Because, rate payers are too dim to understand a rate increase if SMUD doesn’t use the flowery lingo.) This part of the rate restructuring is called the SMUD Clear Terms^SM Initiative… but there is no link to read this clever-sounding “initiative.” 

However, the downtown Sacramento Sierra Curtis Neighborhood Association (home-away-from-home to many legislators) has information. And, this is the same neighborhood association which Rosanna Herber served as President for several years, and she is currently a member of the Curtis Park Energy Stars Steering Committee. Hmmm.

JAN. 23, 2012