Blacking out green power

Boosting wind, solar and other sources of renewable energy might seem like a no-brainer during these times of out-of-control energy prices, looming blackouts and increasing air pollution.

At least that is what John White and many others thought. White, who has fought for years to clean the air we breathe by pushing for cleaner power plants and vehicles, saw the soaring price of traditional, polluting generating facilities as a golden green opportunity.

That opportunity got even brighter when California began signing multi-year power contracts to stabilize the topsy-turvy electricity market. Renewable power does not pollute the air or exacerbate global warming. It is often price-competitive. And wind and other green power projects can pump out juice before a new fossil fuel-fired power plant can even come on-line.

However, the opportunity to boost the amount of green power flowing into homes and businesses in any meaningful way appears to have been squandered by California’s biggest and newest power buyer: the state Department of Water Resources (DWR).

DWR has been buying tens of billions of dollars worth of juice on behalf of financially fried Pacific Gas and Electric and the state’s two other investor-owned utilities since early this year. Yet instead of embracing solar, wind, geothermal and other renewable power sources, it has contracted for only a token amount.

Of the nearly 9,800 megawatts (MW) locked up in power deals lasting until 2010, only 120 MW comes from wind, geothermal and biomass energy, which is just 1.2 percent. (One MW powers up to 1,000 family homes. Biomass power is produced by combusted or fermented agricultural, industrial or forestry wastes.)

White, head of the Center for Energy Efficiency and Renewable Technologies (CEERT), attributed the missed opportunity to “indifference, ignorance and secrecy.”

DWR’s $43.8 billion power deals were negotiated behind closed doors and were only partially revealed for the first time last month, after a group of news agencies and Assembly Republicans sued Governor Gray Davis under the California Public Records Act to bring the deals out into the light.

Davis’ people had argued that revealing the complete records would hurt the state’s bargaining position, but Judge Linda Quinn last week dismissed that argument and ordered Davis’ office to release the complete unedited records.

To make matters worse, because the bulk of the state’s power needs will be provided by these multi-year deals, the green power market has nearly dried up and renewable suppliers are in worse shape today than when the market was first deregulated.

Quoting Bob Dylan, White summed up his sentiments: “When you’ve lost everything, you can still lose a little more.”

At a recent hearing by the Senate Energy Utilities and Communications Committee, DWR representatives were grilled as to why they have failed to diversify the state’s power portfolio by contracting with so few renewable suppliers. The law that authorized DWR to buy power directed the department to purchase both fossil-fueled and renewable generation.

“One of the things that people want to see come out of this crisis is a significant increase in renewable energy, which is considered a significant benefit to air quality and fuel diversification,” said Senator Debra Bowen (D-Marina del Rey).

DWR’s Ray Hart claimed the department’s aim was to sign up electricity that flows this year. Yet 70 percent of the power under contract is for supplies from power plants that will be built over the next few years—all of which will be fueled by unregulated natural gas, the supply and price of which is very volatile.

Hart asserted the door was open to renewables, saying 1,200 MW from wind, biomass, geothermal and landfill gas projects was in the works. Clean air advocates were skeptical, noting many renewable projects were given short shrift by the department.

“We were turned down flat by DWR,” said John Weisgall, vice president of Cal Energy. His company offered DWR 60 MW of geothermal power immediately, 170 MW beginning in 2004, plus a possible additional 100 MW, but DWR said it was not interested.

Another renewable supplier said dealing with DWR “is like pouring molasses uphill on a winter day.” Brian O’Sullivan, head of Coram Energy Group, offered DWR 39 MW of wind power at a price below the average contract price.

He said DWR changed the terms of his offer a couple of times before rejecting it, causing him to sense that “no one is empowered to act.”

Another green power generator, who hopes to close a wind deal with DWR soon, said, “Everyone has had problems with DWR, primarily because on a policy level the door is closed.”

Davis’ chief energy czar, David Freeman, former head of the Sacramento Municipal Utilities Commission, who beefed up its renewable power and energy efficiency programs, strongly disagreed and insisted the administration supports renewables.

When asked about the rejected bids, he drawled, “You are talking to someone who spent his whole life advocating renewable energy and conservation and I take second place to no one.”

The spurned green energy suitors, according to Freeman, were unable to come up with proposals that were definitive and timely: “I can’t provide marketing skills that don’t exist.”

Wind power took a hit in another arena as well. The state’s grid operator, the California Independent System Operator (Cal-ISO), has so far refused to rework its rules to make room for wind generation, largely because of the difficulty in predicting when and how hard the wind will blow. Cal-ISO slaps hefty penalties on wind generators that do not provide all the power offered.

According to Nancy Radar of the California Wind Energy Association, Cal-ISO’s rule is keeping 1,000 MW of wind power from feeding into the grid. The controversial rule may come up for a vote at the end of July and it could be overturned by the Cal-ISO board.

Clean power and ratepayer advocates are pushing for legislation that would require 20 percent of our energy supply to come from wind, geothermal, solar, biomass and other clean power sources within a decade.

Matt Friedman, attorney with The Utility Reform Network, warned, “We need to protect ourselves against the natural gas monster and from drifting towards total reliance on natural gas.”

Weisgall warns that if DWR, which is still finalizing power deals, continues to shut out most renewable generators, California will lose its prominence in renewable energy development. And we’ll all be breathing dirtier air.