Power Agency Leans Green
Created in the midst of the electricity crisis by lawmakers who gave it vague duties, the state power authority at 6 months of age says it has found its calling as a champion of clean, green power.
In an “investment plan” approved unanimously by its five-member board Thursday, the authority charts a far more limited future than originally envisioned.
As recently as September, the agency had considered building small gas-fired power plants. Under the new vision, it would not own plants or take over transmission wires. Instead, it would serve as a banker and broker to get more windmills, rooftop solar panels and power-sipping appliances installed across California.
“We’ve injected a bit of humility into this draft,” said S. David Freeman, chairman of the California Consumer Power and Conservation Financing Authority.
The plan approved Thursday suggests that California should have a buffer of 15% more electricity than projected demand, not 22%. The authority also shrank the amount of additional power generation and conservation capacity it proposed to help build by 2006, from 8,000 megawatts to 3,500 megawatts. (For comparison’s sake, California’s peak electricity consumption last year was 48,500 megawatts). And the agency dropped its proposal to ask the Legislature for stronger authority to take over private power projects.
The blueprint tries to reassure independent energy companies, saying the authority “has no interest or desire to displace any private enterprise in California.”
Environmentalists and consumer activists praised the plan. But the state’s private utilities, whose customers are expected to pay for much of the agency’s $5 billion worth of projects, expressed serious reservations.
In written comments, Southern California Edison officials said they see little or no need over the next four years for more power plants than those already under construction. Pacific Gas & Electric argues that the burden of paying for more renewable energy production in California should not fall on private utility customers alone.
California’s electricity situation has changed radically since the Legislature voted to create a public power authority last winter. Once threatened with blackouts and out-of-control prices, state officials today have so much electricity under contract that they often sell it at a loss.
That reality helped convince the authority to check its ambition.
The California Energy Commission predicts a need for 8,000 megawatts of new supply or additional conservation over the next decade in the state.
Private power plants supplying about 3,000 megawatts--enough to serve 2.25 million homes--are likely to be finished in a year or two. Many other projects are in the permitting process, although recent upheaval in the industry has halted some of them.
By choosing to finance 775 megawatts of power production that doesn’t burn natural gas or oil, the authority would help the state achieve a goal of having 20% of its power come from clean sources such as hydropower, solar and wind.
The power authority would also finance programs that could, on short notice, take 2,100 megawatts off the electrical grid. The program would work through the installation of sensors at businesses that get paid to allow grid operators to curtail air conditioners or other equipment when electricity supplies get tight.
An additional 625 megawatts in energy savings could come from the “greening” of public buildings, such as the installation of solar panels on school roofs.
Laura Doll, the authority’s chief executive officer, said that by this summer she hopes to go to Wall Street with a package of projects. The agency is authorized to borrow $5 billion in revenue bonds. To ensure that the bonds get paid back, each project the agency finances must generate supporting revenue.
