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Major Changes Coming To California Public Utilities Commission

Monday, June 27, 2016 | Sacramento, CA | Permalink


Daniel Hoherd, flickr

Gov. Jerry Brown and state lawmakers have reached a deal to overhaul the California Public Utilities Commission, the agency that's drawn fire for lackluster safety oversight and cozy relationships with the utilities it regulates.

The commission regulates gas and electric utilities, like PG&E and Southern California Edison. It regulates cable, phone and Internet companies – think Comcast and AT&T. And it regulates taxis and ride-share services – like Lyft and Uber.

“This entity governs so much of life in California now” – far too much for one agency, says Democratic Asm. Mike Gatto – one of the lawmakers who negotiated the overhaul with Brown. (Democratic Sens. Mark Leno and Jerry Hill are the others.)

Gatto pointed to the commission’s contentious debates over background checks for Lyft and Uber drivers.

“The CPUC had spent a whole lot of time and effort and energy on whether a background check should go back seven years or eight years,“ Gatto told reporters at the state Capitol Monday shortly after the governor's office announced the deal. “And they’re doing this, of course, while pipelines are literally blowing up.”

In addition to transparency and ethics reforms, many of the CPUC’s transportation responsibilities will be moved to the California Highway Patrol and Department of Motor Vehicles. The state will study whether to reassign oversight of cable, phone and Internet companies.

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Sweeping Public Utilities Commission changes announced

JUNE 27, 2016 11:19 AM

Embattled regulator has faced regular criticism

Influencers will need to register as lobbyists

Companies such as Uber, Lyft no longer in agency’s enforcement purview

On Monday, June 27, 2016, the day Gov. Jerry Brown and lawmakers announced a deal to overhaul the troubled California Public Utilities Commission, Assemblyman Mike Gatto, D-Los Angeles, explains why things needed to change. Jeremy B. White The Sacramento Bee


A deal between Gov. Jerry Brown and lawmakers announced Monday will bring major changes to the oft-criticized California Public Utilities Commission, including removing the regulator’s enforcement authority over ride-hailing services such as Uber and Lyft.

“These reforms will change how this commission does business,” Brown said in a statement.

As a series of crises have beset the commission, from its response to a massive Southern California gas leak to the ouster of its former leader after revelations of back-channel dealings related to a deadly San Bruno pipeline explosion, legislators have agitated for changes. Assembly Speaker Anthony Rendon, D-Paramount, called the regulator “a mess” in advocating reforms.

Calling the regulator overburdened and ineffective, Assemblyman Mike Gatto, D-Los Angeles, has advanced a constitutional amendment to dissolve the body and let lawmakers reconstitute it. With that measure marching steadily through the Legislature, Brown and lawmakers agreed to a package of changes. In the past, Brown has vetoed bills aimed at reining in the PUC.

“This is a key restructuring of the PUC,” Gatto said in an interview, adding that he would drop his measure. “We are freeing up their time and focus to really pay attention to the important things, which is the safety and fairness of our electrical and gas infrastructure.”

Sen. Jerry Hill, D-San Mateo, whose district encompasses the site of the gasoline explosion and who has been one of the agency’s most dogged critics, said he hoped the compromise would restore public trust in an institution widely perceived as being “in bed with those utilities.”

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Gov. Brown, legislators to shake up state utilities commission

By David R. Baker

June 27, 2016 Updated: June 27, 2016 5:11pm

  1. pastedGraphic.pdf


    IMAGE 1 OF 3

    California Public Utilities President Michael Picker (L) listens during a meeting at the California Public Utilities office in San Francisco on August 26, 2015. Governor Jerry Brown and state legislators ... more

    In a bid to end back-room deals between utility companies and their state regulators, Gov. Jerry Brown and legislative leaders proposed a sweeping overhaul of the California Public Utilities Commission on Monday, tightening ethics rules and handing some of its powers to other agencies.

    The commission’s leaders would need to report in public any conversations with utility executives over setting utility rates. Should they fail to do so, the state’s attorney general could drag them into Superior Court and fine them.

    The commission would also establish an ethics ombudsman to field ethics questions and complaints from commission employees and the public alike.

    The proposed changes mark the latest effort to reform the powerful commission in the wake of the fatal 2010 explosion of a Pacific Gas and Electric Co. pipeline beneath San Bruno. Investigations into the blast, which killed eight people, revealed a pattern of back-channel communications between the commission and the companies it regulates.

    “The utilities were controlling the commission — it became very clear that this was the problem,” said California Sen. Jerry Hill, a Democrat who represents San Bruno. “This is a tremendous step, and it moves us closer to putting the ‘public’ back in the Public Utilities Commission.”

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    Beset by scandals, the state’s energy regulator is facing a massive reorganization



    Porter Ranch residents at a protest in February call for the closure of the Aliso Canyon storage facility.


    June 28, 2016, 12:05 a.m.

    In a broad reorganization of California’s primary energy regulator, Gov. Jerry Brown and state lawmakers announced a deal Monday to strengthen external oversight, boost transparency in communications with the electric and gas industries and jettison some authority over Uber, Lyft and other ride-hailing companies.

    The package of reforms comes in response to scandals up and down the state in recent years, including the 2010 gas pipeline explosion in the San Francisco suburb of San Bruno, the decommissioning of the San Onofre nuclear power plant near San Clemente and last year’s Aliso Canyon gas leak in Porter Ranch. In each case, the regulator, the California Public Utilities Commission, has faced significant criticism over alleged lax oversight or having a too close relationship with the energy companies involved.

    “This represents a new day for the people who in the last five years or so have suffered based on some sort of breakdown in California's regulatory environment,” said Assemblyman Mike Gatto (D-Glendale), who presented the proposal at a Monday news conference.

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    Editorial: PUC reforms: Here’s what else must be done

    By The San Diego Union-Tribune Editorial Board | 3:17 p.m. June 27, 2016


    Surfers wade in front of the closed San Onofre nuclear power plant. Southern California Edison, one of the two utilities that owns the plant, wants state regulators to keep a settlement agreement in place that leaves customers on the hook for $3.3 billion of the $4.7-billion cost to close the facility. (Gregory Bull / Associated Press)

    1. 0

    The California Public Utilities Commission reform package introduced by Gov. Jerry Brown on Monday with the blessing of three of the PUC’s staunchest critics is an important step toward bringing transparency and higher standards to the state’s scandal-scarred utilities regulator. But it is crucial that this only be seen as a first step. Far more needs to be done to make the PUC a trustworthy, reliable defender of the public’s interest.

    If approved by the Legislature and properly enforced, the proposal would:

    Require much more disclosure of unofficial meetings between regulators and utility officials. The state Attorney General’s Office would be able to go to Superior Court to demand compliance.

    Require that PUC board members not have worked for a state utility for at least two years.

    Require that far more of PUC actions be subject to the California Public Records Act.

    Require everyone who seeks to influence PUC decision-making to register as a lobbyist.

    Create the position of POC ombudsperson to make it easier for whistleblowers to raise concerns.

    Free up resources by shifting the enforcement of regulations covering companies like Uber and Lyft to the California State Transportation Agency.

    The statement the governor released detailing his proposal included endorsements from Assemblyman Mike Gatto, D-Glendale, and Sens. Jerry Hill, D-San Mateo, and Mark Leno, D-San Francisco. In February, Gatto pronounced the PUC to be “broken” and proposed a constitutional amendment to restructure the agency and reduce its autonomy. Hill and Leno authored three of the six PUC reform bills that Brown vetoed last October.

    Since then, the governor appears to have changed his mind about the need for more PUC accountability, likely spurred by both legislative pressure and a series of fresh reminders of the PUC’s awful judgment. The latest:

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    Oakland council votes to block coal-shipping plan

    By Rachel Swan

    June 27, 2016 Updated: June 28, 2016 8:02am


    Photo: Scott Strazzante, The Chronicle

    Hoping for more high paying jobs, Oakland resident Gregory Nash counter protests against those trying to bar coal from being shipped through Oakland before City Council meeting on Monday, June 27, 2016.

    The Oakland City Council voted unanimously Monday to block the handling and storage of coal in Oakland, effectively halting a developer’s controversial plan to ship coal from the port.

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    Oakland Votes to Block Large Shipments of Coal



    Demonstrators facing off in front of City Hall in Oakland, Calif., before a council meeting on Monday on the transport and storage of coal shipments.

    Credit Aric Crabb/Oakland Tribune, via Associated Press

    SAN FRANCISCO — The city of Oakland, Calif., on Monday banned the transport and storage of large coal shipments, a blow to a developer’s plans to use a former Army base as an export terminal to ship coal to China and other overseas markets.

    The terminal would have been the largest coal shipment facility on the West Coast, with a planned capacity to increase coal exports in the United States by 19 percent, according to the Sierra Club, the environmental group.

    Weeks of feisty debate over the ban, which the Oakland City Council unanimously passed late Monday night and which will become law after a second reading next month, covered familiar ground: the trade-offs between jobs and environmental concerns.

    But the debate also raised the larger and more unusual question of how much a city should weigh the global environmental impacts of the commodities that flow through its ports. A report prepared by the city argued for a coal ban partly because the coal, once it was burned overseas, would contribute to climate change and rising sea levels.

    “Oakland cannot afford to ignore the scientific evidence that clearly show the harmful effects and risk associated with coal,” said Dan Kalb, a City Council member who proposed the ban along with the mayor, Libby Schaaf. “With this new law, we’re taking the steps needed to protect our community, our workers and our planet.”

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    Berkeley Lab: It Takes 70 Billion Kilowatt Hours A Year To Run The Internet

    JUN 28, 2016 @ 09:23 AM

    Christopher Helman , FORBES STAFF


    How much is cost lolcats? (Photo by Cindy Ord/Getty Images for SiriusXM)

    America’s myriad server farms and data centers operate 100 million drives that hold 350 million terabytes of data — everything from your decade-old emails to lolcat videos and the collected offerings of Netflix NFLX +2.51%.

    A new report from the Department of Energy’s Lawrence Berkeley Laboratory figures that those data centers use an enormous amount of energy — some 70 billion kilowatt hours per year. That amounts to 1.8% of total American electricity consumption. At an average cost of 10 cents per kwh, the annual cost of all that juice is on the order of $7 billion.

    Seventy billion kilowatt hours is such a giant number that it’s helpful to put it into some other terms. For comparison purposes, 1 kwh is enough power to keep ten 100-watt lightbulbs illuminated for one hour, or to keep your smartphone charged for an entire year.

    To generate 70 billion kwh you’d need power plants with a baseload capacity of 8,000 megawatts — equivalent to about 8 big nuclear reactors, or twice the output of all the nation’s solar panels.

    Sliced up per capita, the average American uses about 200 kwh a year for his or her internet use, costing about $20. For those of you obsessed with carbon footprints, your internet use is responsible for the emission of about 300 pounds of carbon dioxide per year.

    But our internet addiction is only growing. According to Nielsen, the average adult in the United States spends 10 hours and 39 minutes a day consuming digital media. That’s up an hour a day in the past year. And we’re spending most of that additional time peering at our smart phones, which now occupy us for an hour and a half each day.

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    Diablo Canyon agreement should put an end to debate about nuclear power

    JUNE 23, 2016 3:10 PM

    PG&E concluded Diablo Canyon nuclear plant is not economical

    Nuclear power can’t compete with solar, wind in new wholesale market

    21st century approach emphasizes flexibility, distributed generation


    Pacific Gas & Electric Co. on Tuesday announced plans to close its Diablo Canyon nuclear plant within the next decade. The deal will bring the company closer to the mandate that 50 percent of California’s electricity generation come from renewable energy sources by 2030. Pacific Gas & Electric Co.


    Special to The Bee

    The agreement between PG&E, Friends of the Earth, organized labor and other environmental organizations is the final chapter in the tumultuous history of nuclear power in California.


    1. David Freeman

    S. David Freeman is the former general manager of SMUD, chairman of the Tennessee Valley Authority and other utilities. Contact him at

    It began in the 1960s, when Chet Holifield, then chairman of the Congressional Joint Committee on Atomic Energy, envisioned nuclear power plants dotting the Pacific Coast every 50 miles. That dream never came true, but as Sacramento citizens will recall, we did build Rancho Seco. And Southern California Edison and PG&E completed large nuclear power plants of their own.

    I helped bury Rancho Seco when I was general manger of the Sacramento Municipal Utility District in 1990. And contrary to the dire predictions, the lights stayed on, the rates didn’t go up and SMUD has behaved rather well ever since.

    The other large nuclear plants, San Onofre in Southern California and Diablo Canyon in San Luis Obispo, created their own controversies. Their costs spiraled out of control to the tune of billions of dollars that triggered massive rate increases. In fact, it is fair to conclude that these cost overruns at the nuclear plants triggered the deregulation policies the state adopted more than 20 years ago.

    Today, power plants that serve the investor-owned utilities must compete in the wholesale market created by California law. It is thus with some irony that the last remaining nuclear plant, Diablo Canyon, is now going to be closed because its owner, Pacific Gas & Electric, has concluded it is not economical. Nuclear power just can’t compete with the sun and wind in the new wholesale market.

    Nuclear power plants epitomize the 20th century approach to electricity production: the plants take lots of time and money to build, and generate immense amounts of electricity, but their inherent design requires them to be operated around the clock (except for refueling and repair pauses).

    By contrast, the 21st century approach to electricity production emphasizes flexibility, distributed generation and seeks to reduce overall demand. In 2030, California law will require that 50 percent of electricity be from renewables like wind and solar. That power must be used when available, except for the amount stored. On most days for many hours, these renewable resources will provide 100 percent of the electricity needed. In those hours, a “must run” nuclear plant would crowd out that renewable energy and actually cause us to waste it.

    This new concern is called “overcapacity.” It is a shorthand way of saying a large base load of must-run power, like from Diablo Canyon, just doesn’t fit into the power supply of the future. That was the conclusion reached not by me, but by PG&E.

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    Plan for regional power grid raises hopes, doubts

    By Jeff McDonald | 7 a.m. June 27, 2016

    A plan to expand management of California's power grid to a six-state area is raising concerns that the energy — and the governance — might not be as clean as billed.

    The idea is to restructure and expand what’s known as the California Independent System Operator, or Cal-ISO, a nonprofit based in Folsom that manages the majority of state transmission lines and the electrons coursing through them.

    The California operator, run by a five-member board appointed by the governor, would join with a for-profit Oregon utility to create a regional energy market that serves six or more Western states.

    State officials say the expanded market would allow California to sell excess solar and wind power to other states rather than let it go to waste. It would also create a single, clean, reliable and more efficient Western grid, they said.

    “When you have a bigger geographical footprint, you have a deeper resource pool and a deeper demand pool,” Cal-ISO spokesman Oscar Hidalgo said. “This provides better integration in the day-ahead market. You’re able to optimize resources.”

    After a transition period, the new entity would be governed by a nine-member board that answers to the Federal Energy Regulatory Commission, or FERC — not to Brown or any other elected leader in California.

    That’s important because some public-interest advocates remain as skeptical of federal regulators, as they are of California regulators, because U.S. officials were slow to respond to the state Legislature-caused energy crisis in 2000-2001 that caused billions of dollars in ratepayer losses.

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    Folsom’s California ISO leading push for distributed energy resources

    JUNE 24, 2016 2:40 PM

    Plans call for power ‘aggregations’ to tap into California’s power grid

    DERs run the gamut, from electric vehicles to rooftop solar arrays

    ISO calls its federally approved proposal the first of its kind in the U.S.


    The California Independent System Operator in Folsom has gained federal approval for developing a framework for small-scale power generators. Randall Benton Sacramento Bee file


    At the turn of the millennium, when the Toyota Prius hybrid was being introduced to California motorists, some energy experts talked of a day when electric vehicle owners would plug into the state’s power grid, pushing surplus energy back into the expansive system.

    The predictions had the ring of something that our grandchildren would see in some distant, Star Wars-like future.

    In reality, Californians could be plugging into the grid as soon as early next year, according to officials with the Folsom-based California Independent System Operator, which runs the state’s electric transmission grid.

    Earlier this month, ISO received approval from the Federal Energy Regulatory Commission to develop a framework aimed at driving distributed energy resources – DER for short – into the power grid. ISO calls its effort the first of its kind in the nation.

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    Bracing For Blockchain: Distributed Ledgers Poised To Drive Adoption Of Distributed Generation

    JUN 27, 2016 @ 08:23 AM

    William Pentland , CONTRIBUTOR

    I write about energy and environmental issues.

    Opinions expressed by Forbes Contributors are their own.

    The distributed energy revolution is already underway. In 2008, New York City boasted a fleet of backup generators estimated at about 2 gigawatts, or roughly 20% of the annual coincident peak demand. Nearly 15% of homeowners in the United States own a backup generator, according to Generac, a manufacturer of generators based in Wisconsin. By contrast, the distributed generation revolution is only just beginning. In 2015, only about one million homes, or slightly less than 1% of all homes, had installed rooftop solar panels in the United States, according to the EnergySage.

    Unlike backup generators, rooftop solar panels are almost always interconnected with the electric power grid. This is because solar panels seldom produce sufficient power to supply all of a home’s electricity needs at a given time. In addition to relying on the grid as a source of supplemental power, home and business owners with onsite solar systems typically sell a portion of the electricity they generate to distribution utilities under an arrangement known as net metering. To do so, they need to be interconnected with the electric grid.

    The reason backup generators are rarely interconnected with the electric grid is that the interconnection process is frequently expensive and administratively cumbersome.

    The cost and complexity of interconnecting distributed generation with the electric grid has been described as the Achilles heel for distributed energy.

    Many of the value streams created by DG are difficult to capture without significant levels of interoperability. The result is that DG cannot always monetize the full scope of benefits it provides without significantly expanding the capital costs via an enhanced interconnection technology. The development of “plug-and-play” interconnection technologies that enabled greater levels of control, islanding detection, stability, protection, forecasting and similar functionalities would be a game changer.

    The key to capturing the full value of interconnection is the ability to arbitrage the economics of supply and demand at micro levels in real time. In other words, distributed generation needs an autonomous system for facilitating peer-to-peer sales and purchases of small amounts of electricity. Until recently, the cost of conducting such peer-to-peer transactions has significantly exceeded the benefits.

    Enter blockchain, or distributed ledgers.

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    Study Links 6.5 Million Deaths Each Year to Air Pollution

    By STANLEY REEDJUNE 26, 2016



    A coal-fired power plant on the outskirts of Beijing.

    Credit  Kevin Frayer/Getty Images

    A sobering report released on Monday by the International Energy Agency says air pollution has become a major public health crisis leading to around 6.5 million deaths each year, with “many of its root causes and cures” found in the energy industry.

    The air pollution study is the first for the agency, an energy security group based in Paris, which is expanding its mission under its executive director, Fatih Birol.

    The agency, whose 29 members are wealthy, industrialized countries, was founded in response to the Arab oil embargo in 1973 to coordinate international responses to energy issues. It is perhaps best known for its monthly oil market reports that are eagerly awaited by traders.

    Mr. Birol, an economist, argues that pressing concerns about climate change and the emergence of countries like China and India as major energy consumers and polluters mean that the agency needs to shift its strategy.

    “To stay relevant,” he said in an interview on Friday, we “need to work much closer with new emerging energy economies.”

    Mr. Birol has been working to build bridges with China in particular, which energy experts say is crucial to the success of global efforts to reduce emissions.

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    One year later, how a Pope’s message on climate has resonated

    A SHIFT IN THOUGHT Catholics worldwide are showing a new zeal for combatting climate change since Pope Francis highlighted the issue in 2015, experts say.

    By Cristina Maza, Staff writer JUNE 24, 2016


    1. Andrew Medichini/AP/File

    For Catholics around the world, climate change is a heightened priority – and many are taking action in the wake of efforts by Pope Francis to focus on environmental stewardship.

    It’s a story that runs counter to popular perception, which holds that religious people do not believe in climate change – or believe that it falls outside the realm of human control.

    In truth, people of faith have played important roles in environmental causes for generations. Yet, at the same time, polls find that devout Americans are generally less likely to be concerned about global warming than their nonreligious peers.

    But among Catholics this may be starting to change. In the year since Pope Francis released his encyclical, Laudato Si, imploring his followers and fellow believers to care for the earth and its creatures, observers say more and more Roman Catholics are beginning to view climate change as a moral issue in which caring for the earth and caring for the poor intersect.

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    The Sun Is Setting On Fossil Fuels

    JUN 27, 2016 @ 08:17 AM

    Jon Markman , CONTRIBUTOR

    Analyzing tech stocks through the prism of cultural change.

    Opinions expressed by Forbes Contributors are their own.

    Things are getting a lot tougher for the embattled carbon fuels industry. That’s according to a new Bloomberg research piece predicting a slow, inevitable death for the widespread use of crude oil.

    To be sure, fossilized dinosaur goo has been under siege for a while. The politics of climate change coupled with spills, fires, explosions and other self-inflicted wounds have made industry survival challenging. Weak commodity prices have made it all much worse. In the past, the industry has persevered. The difference this time is that competing energy sources are finally starting to make economic sense.


    Investment in Power Capacity, 2008-2015 Source: BNEF, UNEP image credit: Bloomberg

    Take solar. Prices for solar panels are plummeting. The cost of solar panels has declined 95% since 2008, and the trend is accelerating. While that makes it very difficult to be in the business of making panels, it’s a dream scenario for large utility businesses building out capacity. That’s exactly what has been happening. There has been more corporate investment in solar in the first quarter of this year than all of the other energy sources combined.

    The math is simple: Solar is getting cheaper every day, and it is renewable, so there is no need to worry about supply chain bottlenecks, environmentalists or politics. Plus, it’s a virtuous circle. Falling prices lead to greater demand, which leads to economies of scale, network effects, and still lower prices for panels. It’s the sunshine version of Economics 101.

    Meanwhile, the math for fossil fuels has been predictable and grim. Prices for coal can’t fall fast enough. There is no demand for new supply. In the developed world, environmentalists have squashed debate. Coal’s share of U.S. electricity production has gone down 17% since 2005. This comes even as companies like General Electric (GE) use Big Data analytics to make the idea of cleaner coal a reality. In the developing world, economic upheaval in China has meant less demand, leaving most producers waiting for India to come on line with new coal-fired power plants. Good luck with that in the current world political climate.

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