on May 21, 2013 2:08 PM

Original source: http://www.kcet.org/news/rewire/utilities/will-solar-doom-pge.html?utm_source=feedly

A report on the industry thinktank website The Energy Collective suggests that Pacific Gas & Electric might be the first U.S. power company to fall to competition with increasingly cheap rooftop solar.

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In his report, analyst Douglas Short points out that a confluence of factors contribute to what he sees as a bleak outlook for PG&E's future, including the utility's retail price structure for power, state laws, and good old California sunshine. Other analysts have called this looming threat to utilities the "death spiral": as rooftop solar gets cheaper and more people install it, utilities raise rates on non-solar customers, who then have greater incentive to install rooftop solar.

Understandably enough, PG&E disputes Short's bleak prognosis for the company -- but not his overall assessment of the issues.

Short puts it succinctly:

PG&E's marginal prices cannot compete with solar. Large residential customers pay 31¢-35¢/kWh [kilowatt-hour], the same prices that cause the solar revolutions in Hawaii and Australia. Even worse, according to PG&E, "By 2022, PG&E's top residential rate could reach 54 cents." Residential customers represent about 40 percent of PG&E's retail electric revenue.

Commercial customers experience high rates, too. Unlike residential customers, who need a commercial third party to own the solar panels to take advantage of the accelerated depreciation, commercial customers can keep that advantage for themselves, making solar more financially attractive. Commercial customers represent about 46 percent of PG&E's retail electric revenue.

Making things worse for PG&E, says Short, is a state law limiting rate increases for the utility's lowest "rate blocks" -- those customers who use the least power and are charged a lower rate per kilowatt-hour. By focusing potential rate increases on PG&E's biggest energy consumers, the law increases the attractiveness of rooftop solar even more for those energy high-rollers. That's fantastic for the planet, as high energy users moving to solar have more of an impact than those of use who've already cut out consumption down to the bare minimum. But it's not so great for PG&E's bottom line, as those lucrative customers suddenly become far less lucrative when the solar panels go up on their roofs. As Short says:

[O]nce customers go solar, PG&E loses the sales forever, exacerbating the smaller sales / higher price cycle.

Short expects residential rooftop solar prices to fall by about 10 percent a year, a projection that's well in sync with recent trends. This would put the cost of solar electricity at about 10-15 cents per kilowatt-hour in foggy San Francisco by 2020, about what PG&E's customers pay for non-peak power in 2013.

"There is nowhere else in the U.S. with the same confluence of events," says Short: "High and rising marginal prices, good sunshine, and inability to respond to changed competitive circumstances. If ever an electric utility was set up to fall to solar, it is PG&E."

"I don't think we're going to 'fall to solar,'" David Rubin told ReWire Tuesday. PG&E's Director of Service Analysis, Rubin works on the utility's net metering program. "We don't see solar customers adopting solar as competition. Our concern is that the rates we can charge are misaligned, and that our non-solar customers end up picking up the costs to provide the important grid services our solar customers require."

According to Rubin, PG&E's approximately 85,000 customers with rooftop solar installations make up 25 to 30 percent of all such installations in the United States. "We're proud of that fact," said Rubin. "We're proud of our solar customers. We'd just like to work with all participants to create a solution that provides a better balance between the interests of solar and non-solar customers."

This isn't a new argument, of course, and it's been countered by groups like Vote Solar, which pointed out in January that increased rooftop solar also saves non-solar customers from covering the costs of new centralized generation, long-distance transmission and other avoided investments. According to a January study commissioned by Vote Solar, such avoided costs amount to a net $92 million saved by California non-solar ratepayers.

The California Public Utilities Commission (CPUC), meanwhile, has been doing its own cost-benefit analysis of net metered rooftop solar, and expects to release new rules based (in part) on that analysis by the end of summer. We can expect a lot of arguments and counterarguments on the benefits of rooftop solar until then. Whatever policies the CPUC proposes will likely be watched closely by regulators elsewhere in the country.

Here's the thing, though: plunging solar prices won't always need net metering to help encourage energy users to install solar panels to cover most of their daytime consumption needs. Once solar power is cheaper than buying power from the grid, subsidies will be just an additional incentive. At some point, and that point may not be far off, that solar death spiral will very likely claim an American utility. And it's not as if PG&E isn't vulnerable, especially given other recent potential financial setbacks for the company.

dkasler@sacbee.com

Published: Wednesday, May. 22, 2013 - 12:00 am | Page 6B

California's heavy industries spent $280 million on greenhouse gas permits in the state's latest carbon auction – a sign to environmentalists that the controversial program is hitting its stride.

The California Air Resources Board, reporting on the results of its third carbon auction, said credits that allow polluters to emit greenhouse gases this year sold for $14 a ton. That's the highest price for any of the auctions.

Allowances for use in 2016 sold for the minimum $10.71 a ton. The auction was held last Thursday.

The auctions are an essential piece of the California cap- and-trade market, which is designed to reduce carbon emissions.

To read the entire article go to: http://www.sacbee.com/2013/05/22/5438313/carbon-auction-price-rises.html

In California, the cost of carbon is starting to rise.

Last week, California held the third auction of greenhouse gas “allowances” under the state”s new cap-and-trade system, in which companies buy and sell permits to emit carbon dioxide.

The price for current allowances rose to $14, state officials reported Tuesday. That’s up from $13.62 in the second auction, held in February, and $10.09 in the first, held in November.

A gently rising price is exactly what cap-and-trade supporters want. It gives businesses – such as operators of power plants, factories and oil refineries – a reason to cut their greenhouse gas emissions. At the same time, a slow increase won’t trigger sudden spikes in the cost of energy or consumer goods.

“We have solid reasons to be optimistic about California’s carbon market, and the continued growth of the clean energy economy,” wrote Emily Reyna with Environmental Defense Fund on the group’s web site. “The skeptics aren’t staying silent, but their case is losing steam.”

To read the entire article go to: http://blog.sfgate.com/energy/

May 21, 2013

Gov. Jerry Brown's proposal to shift $500 million in cap-and-trade fees levied on business for greenhouse emissions into the state budget ran into bipartisan opposition Tuesday.

The two Democrats and one Republican on a Senate budget subcommittee denounced Brown's plan, which was included in a revision of his state budget last week.

The $500 million loan to the general fund is designed to partially offset the Brown administration's forecast that revenues will dip below earlier projections in the 2013-14 fiscal year by $1.8 billion, but members of the committee said it made little sense since the same budget proposes to repay some of the state's "wall of debt," which is mostly money owed to schools.

Money from the fees is supposed to pay for programs that reduce greenhouse gases, and the Legislative Analyst's Office had warned in the past that using the fees for other purposes could be illegal..

To read the entire article go to: http://blogs.sacbee.com/capitolalertlatest/2013/05/500-million-cap-and-trade-loan-to-state-hits-wall-of-opposition.html

Special to The Bee

Published: Wednesday, May. 22, 2013 - 12:00 am | Page 13A

We had such high hopes in April.

California recently collected nearly half a billion dollars under its new emissions trading system, which "caps" industrial greenhouse gas emissions and requires firms to obtain pollution permits for every ton of carbon they emit. The state's unenviable next task was to choose among all the worthy options to meet the law's requirement to invest those proceeds in projects that further the goals of AB 32, the state's landmark clean energy law.

On the table were a host of impressive near- and long-term projects to advance clean and efficient energy; more bikeable, walkable communities; mass transit; the weatherization of low-income homes; and the all-important job-training programs to enable low-income Californians to take part in our growing clean energy economy.

Then came last Tuesday's announcement that these investments will likely have to wait. The governor's May revised budget disclosed plans to divert $500 million in cap-and-trade auction proceeds to the general fund. This transfer would be a one-time loan to be paid back with interest.

The Brown administration's rationale is that it wouldn't be "fiscally prudent" to start investing these funds when income from future auctions can't be predicted.

The underlying premise may be true, but the stakes are too high for such a drastic maneuver.

To read the entire article go to: http://www.sacbee.com/2013/05/22/5438341/brown-should-not-retreat-from.html

By Darwin BondGraham

This article was published on 05.23.13.

Original source: http://www.newsreview.com/sacramento/students-environmentalists-pressure-calpers/content?oid=9960069

Does your pension cause climate change? Demonstrators at last week’s Regents of the University of California meeting in Sacramento think so.

A movement is afoot to divest city pension funds and university endowments from fossil-fuel companies.

Organizers of the campaign, including local students and climate-change activists with 350.org, hope to tarnish the brands of oil, gas and coal companies. Ultimately, their goal is to move hundreds of billions of dollars from economic activities that cause climate change toward renewable, low-carbon investments.

California and Sacramento will be major battlegrounds.

Divestment activists are targeting California’s state pension systems, the California Public Employees’ Retirement System, or CalPERS, and the California State Teachers’ Retirement System, CalSTRS. Both have enormous holdings of fossil-fuel company stocks and bonds.

The University of California, which administers its own giant endowment and multiple pension funds, is also being pressed to ditch oil, gas and coal securities.

Last Thursday, students converged on the Regents governing board meeting at the Sacramento Convention Center.

“We’re hoping to convince the Regents to divest the UC system from the 200 largest publicly traded fossil-fuel companies,” said Ophir Bruck, a third-year UC Berkeley student who helped organize the action. “We’re not going to bankrupt these companies. It’s largely about hitting their reputation. …

“We want folks to associate their brand with the destruction of the Earth’s climate system.”

Sacramento-headquartered CalPERS manages the retirement investments for most of the Golden State’s city, county and state employees and has approximately $265 billion in assets under management. CalSTRS, also headquartered in Sacramento, has $164 billion invested.

Another group taking up the cause, California Teachers for Fossil Fuel Divestment, plans to press the CalPERS and CalSTRS boards to dump carbon-energy company securities.

“This will not be easy,” said Gary Waayers, a biology teacher from San Diego who founded California Teachers for Fossil Fuel Divestment. “Fossil fuels are a major part of the net worth of the planet, so divestment means divesting from a significant sector of the economy.”

CalPERS, the nation’s largest pension system, owns shares in at least 292 different companies involved in oil, gas and coal exploration, production, refining and transport. About 10 percent of the market value of CalPERS’ stock portfolio is fossil-fuel investments. The pension’s largest fossil-fuel stock picks are U.S. corporations Exxon Mobil Corp., Chevron Corp. and Schlumberger.

CalPERS also owns about $1.4 billion in oil, gas and coal company bonds. Through the bond market, CalPERS has financed the activities of companies like Nexen Inc., one of the largest exploiters of Canada’s massive oil sands.

CalPERS also owns tens of millions in company bonds financing TransCanada, which has battled environmentalists, landowners and scientists for a decade over its proposed Keystone XL pipeline, which would transport oil-sands extracts to Texas for global export.

The oil sands, thick deposits of bitumen and dirt from which oil can be extracted, can be refined into 168 billion barrels of oil. By comparison, Saudi Arabia has 264 billion barrels of reserves buried beneath it.

The scientific consensus is that if such vast reservoirs of oil are tapped and burned, climate change will very likely destroy the conditions for life on Earth, causing spikes in temperatures, massive droughts, wildfires, rising sea levels and other catastrophic transformations of the biosphere.

During last week’s Regents meeting, the university’s leaders received a presentation from UC researchers about climate change. Under a business-as-usual scenario, in which carbon reductions are not made, California’s Sierra Nevada snowpack will entirely disappear by 2050. Without mountain snow, California’s cities and agriculture will dry up, according to UC’s scientists.

Sacramento would become an uninhabitable desert.

Sabrina Fang, a spokeswoman for the American Petroleum Institute, said divestment by university endowments is misguided.

“The development of oil and natural gas in America has done more to create jobs and generate revenue than any other industry,” she said.

Fang pointed to a December 2012 study, commissioned by API, that showed oil and gas company investments as producing big returns for universities.

She called the current oil and gas boom in the United States an “unstoppable revolution … helping economic recovery.”

Climate activists have countered with their own research. A recent report by the Aperio Group, an investment-management company, urges endowments and pensions to “do the investment math” when it comes to the question of whether dumping fossil-fuel stocks negatively impacts earnings.

Aperio’s analysts conclude that “the impact may be far less significant than presumed,” and that exclusion of oil, gas and coal stocks is likely to change overall investment returns by only half-of-one-hudredth of a percent.

Another report, circulated by activists and written by the HSBC bank, says sticking with carbon-energy stocks is risky.

HSBC’s analysts note that much of the value of oil-, gas- and coal-company stocks is based on the presumption that these firms will tap and burn their proven reserves. If, however, governments act to reduce CO2 emissions and invest in new technologies to reduce demand, then the value of these stocks could plummet, sticking investors with big losses.

Activists say, however, that dumping dirty-energy stocks should only be the start for cities.

“I hope that in the end reinvestment will become an even bigger movement than divestment,” said Jamie Henn, a spokesperson for 350.org. “There are these huge pools of money sitting in college endowments and state pension funds that could be invested in ways that both deliver a good return and help the environment and community in the process.”

California’s massive pools of pension and university endowment wealth also have global reach. CalPERS money is invested in Russian energy giants like Gazprom and Lukoil and Brazil’s state oil company Petrobras. UC pension funds are tied up with European and Chinese oil and gas companies.

Neither CalPERS nor CalSTRS have taken up the issue of a possible move to divest from carbon-intensive-energy holdings. Bruck said he’s hoping his coalition can press the UC Regents to take up the issue in the fall and perhaps vote sometime next year.

Already seven UC campus student governments and the faculty Senate of UC Santa Barbara have voted in favor of divesting UC’s $71 billion in pension and endowment investments from fossil-fuel companies.

The total endowment holdings for the nation’s 831 largest colleges and universities is estimated to be $406 billion as of last year. Exxon Mobil alone has a market capitalization of $401 billion.

Stephen Lacey: May 21, 2013

Only three hours after getting sworn in as energy secretary, Dr. Ernest Moniz went to the Washington convention center this afternoon to deliver his first speech in office.

Secretary Moniz spoke to a crowd at the Energy Efficiency Global Forum about his upcoming agenda as secretary.

"Efficiency is going to be a big focus going forward," he said. "I just don't see the solutions to our biggest energy and environmental challenges without a very big demand-side response. That's why it's important to move this way, way up in our priorities." The audience applauded.

Moniz's decision to speak at an energy efficiency conference "speaks volumes about how important efficiency is" to his plans at the Department of Energy, said Kateri Callahan, president of the Alliance to Save Energy.

To read the entire article go to: http://www.greentechmedia.com/articles/read/ernest-moniz-gives-his-first-speech-as-energy-secretary?utm_source=Daily&utm_medium=Headline&utm_campaign=GTMDaily

By David J. Unger, Correspondent / May 21, 2013

Monday's deadly Oklahoma tornado has left relatively intact one of the state's biggest and fastest-growing industries: energy.

Why It Matters

Energy: Oklahoma is home to a major pipeline hub and ranks 11th in US energy production.

Environment: Above-ground energy infrastructure is vulnerable to extreme weather, making surrounding land vulnerable to spills.

A boom in US oil and gas production is underway with drilling rigs, storage tanks, and pipelines increasingly dotting the country's landscape. Some of the development is taking place in and around so-called "tornado alley," an unofficial swath of much of Oklahoma that spills over into surrounding states most prone to tornadoes.

This may sound more worrying than it is. While hurricanes routinely disrupt offshore oil and gas production in the Gulf and elsewhere, inland, rigs, pipelines, and tanks are comparably unaffected by extreme weather – most of the time.

"I don't see a tornado disrupting our mass oil and gas delivery methods," Otto Lynch, a civil engineer who serves on the American Society of Civil Engineers' committee on America’s infrastructure, said in a telephone interview. "[Pipelines] are typically underground. The substations around the routes are very small, low profile, and very rigid. Unless a tornado hit directly, I don’t see an issue from the mass delivery standpoint."

To read the entire article go to: http://www.csmonitor.com/Environment/Energy-Voices/2013/0521/Oklahoma-tornado-Energy-dodges-a-bullet?nav=92-csm_category-leadStory

By David J. Unger, Correspondent / May 22, 2013

The vote is one of many symbolic gestures by the GOP-controlled House gestures in favor of a project that would transport oil from Canadian oil sands to Gulf refineries. If the Senate doesn't block the so-called Northern Route Approval Act, President Obama will almost certainly veto it. The point is to raise the profile of an issue that is frequently edged out by the headline of the day.

Half the country has never heard of the Keystone XL pipeline, a new poll shows. The White House would prefer not to talk about it, and the State Department isn't rushing its assessment. The Washington press corp has its hands full with testimonies on Benghazi, the IRS, Justice Department subpoenas, and crises ad infinitum.

The pipeline has undergone five years of applications, articles, assessments, studies, comments, and debates. It has tested the patience of critics and supporters alike, as they try to sustain the public's attention.

"Republicans tried to make it an electoral issue in 2011 and 2012 – tying it to the cost of energy," said David Meyer, professor of sociology and political science at the University of California, Irvine, and author of "The Politics of Protest: Social Movements in America." "Environmentalists are using it as a wedge to open up a discussion about climate change."

Neither side, Mr. Meyer added in a telephone interview, has had much success.

Fifty percent of Americans have never heard of the Keystone XL pipeline, according to a poll released Tuesday by Yale and George Mason universities. Looking at the glass half full, it might be impressive that half the country has heard of an obscure piece of energy infrastructure. But only 18 percent said they follow the issue closely.

To read the entire article go to: http://www.csmonitor.com/Environment/Energy-Voices/2013/0522/Keystone-XL-Hot-topic-in-D.C.-Ho-hum-in-rest-of-US?nav=92-csm_category-leadStory

A thumbs-up for pipelines

May 18th 2013 | VANCOUVER

IN A beautiful land of forests, mountains and fjords, it is no surprise that British Columbian politics has a greenish streak. But the economy in Canada’s westernmost province is languishing. The campaign for the provincial election on May 14th turned into a fight between jobs and the environment. Jobs won, and so, probably, did planned pipelines across the province to take oil and gas from Alberta to Asian markets.

Contrary to the findings of most opinion polls, the provincial Liberal Party (no relation to the federal party of the same name) hung on to power, winning 50 seats—one more than in the 2009 election—to 33 for the main opposition, the left-of-centre New Democratic Party (NDP). The result was a triumph for Christy Clark, the premier, spoilt only by the fact that she seemed to have lost her own seat (by 785 votes) to the NDP. If this result survives a possible recount, the premier is expected to remain in office by triggering a by-election in a safe seat.

Ms Clark, a 47-year-old single mother and former radio phone-in host, began a second spell in provincial politics in 2011, taking over an unpopular Liberal government. She ran a well-judged campaign, promising to boost jobs and curb spending. The main issue became a series of proposed energy, pipeline and mining projects. Ms Clark has given conditional backing to Gateway, a pipeline to export oil from Alberta to a British Columbian harbour, which is being reviewed by the federal government. She gave a more enthusiastic welcome to projects for natural-gas pipelines and terminals in the province, saying they would bring jobs and tax revenues.

To read the entire article go to: http://www.economist.com/news/americas/21578071-thumbs-up-pipelines-its-economy-stupid