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Light Sweet Crude Displacement

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I live in the San Francisco Bay Area and despite its well-deserved ‘tree hugger’ image the inland part of the Bay is home to a concentration of refineries essential to California’s economic vitality.  These refineries produce the boutique blend of gasoline not available anywhere else.  The EPA’s insistence on these unique regional gasoline blends is one reason fuel prices are higher here in California than elsewhere in the country.  When one of our California refineries burps or has any type …Continue Reading »

Will California Hit the Cap and Trade Megamillions Jackpot?

And you thought the California Global Warming Solutions Act (AB32) was all about limiting greenhouse gas emissions, didn’t you?  Think again. There is a brewing fight in Sacramento over how to spend the gold expected to start pouring in when the Golden State starts its carbon cap and trade program.  The original intent of AB32 was to use the proceeds from the carbon permit auctions to invest in technologies and programs that reduce greenhouse gas emissions.  Makes sense, right? But the law was …Continue Reading »

The Good News and Bad with California's Energy Efficiency Code Updates

California adopted an energy efficiency code in 1978 the first time Jerry Brown was Governor, and now it has updated that code to reflect advanced in technology.  I have not been a big fan of many of California’s crazy regulatory demands, but the Energy Efficiency Code was a good idea in 1978 and it is still a good idea. The proof is in the data. California today has an energy intensity fully 50% than the national average, and it is a good thing since our utility rates are among the highest in …Continue Reading »

Is California's Resource Adequacy at Risk?

California is experiencing growing concerns over resource adequacy.  The CAISO took the unusual step of objecting to the proposed shut down of the Calpine Sutter natural gas power plant at FERC saying the plant would be needed as soon as 2017 to assure resource adequacy and thus is made no sense to shut it down now. Why is Sutter being shut down? Because California electric demand is weak along with its economy, but all that renewable energy being added to the grid is classified as “must take” …Continue Reading »

Market Rationalization Demands Grid Parity

"In the last two years, the delivered cost of energy from PV was cut in half. NRG expects the cost to fall in half again in the next two years, which would make solar power less expensive than retail electricity in roughly 20 states. The expected drop in solar costs has the potential to revolutionize the hub-and-spoke power system, which currently makes up the power industry."    --- David Crane, CEO, NRG Energy It was not supposed to be this way, and yet here it is---the highly regulated …Continue Reading »

Grid Parity Arriving with a Fury!

For years advocates of wind and solar energy have been telling us that prices would fall and these clean, renewable technologies would be competitive with natural gas.  That sweet spot is often referred to as grid parity. Congratulations that day of grid parity success has arrived! At its December meeting the California Public Utilities Commission approved more than 500 MW of solar procurements by regulated investor owned utility and more than 294MW of those contracts were at or below the market …Continue Reading »

Federal Judge Blocks California AB 32 Low Carbon Fuel Standard

California’s Global Warming Solutions Act of 2006 or AB32 as it is often called was designed to reduce greenhouse gas emissions. For a while it was thought this law would be made obsolete by the passage of Federal Cap and Trade legislation.  But after cap and trade failed to in support in Congress and the Copenhagen Conference of Parties failed to win international agreement on extending the Kyoto Protocol, AB32 proponents have pressed forward. But in a ruling handed down December 29, 2011 …Continue Reading »

California puts Solar PV on Utilities Christmas Shopping List

As part of its year-end approval of pending renewable energy procurement contracts the California Public Utilities Commission got some good news from the falling prices of solar PV panels. Of the 544 MW of solar projects on the CPUC’s December 15th agenda 294 MW (54%) were at or below ‘grid parity’ which is defined in California market price referent rule as the costs of building a new combined cycle natural gas fired power plant. The other projects approved were priced higher but still judged …Continue Reading »

Signing Long Term Solar Power Contracts in a Falling Price Market

"The PPA unnecessarily saddles ratepayers with extraordinary above-market costs -- $1.25 billion. We could probably get almost 500 megawatts of renewable energy for the price we're paying for this 250 megawatts."---CPUC Commissioner Mike Florio. That was the essence of Commissioner Florio’s pique in voting no on the approval of a purchase power agreement between PG&E and a solar power producer.   We are seeing more of this show up as the cumulative cost of meeting California’s 33% renewable …Continue Reading »

How Much will Clean Energy REALLY Cost?

That is the question customers are asking as their utility rates go up to pay for the cumulative cost of the aspirations of politicians and regulators.  But until now the answer to that question was hard to get at least in California where under state law and utility regulations the costs of utility procurement of renewable energy contracts was kept confidential.  Governor Jerry Brown has signed SB 836 sponsored by Los Angeles County Senator Alex Padilla requiring that the California Public …Continue Reading »