Cali Wrestles With Clean Energy Policies Amid Financial Crisis


CEC-IEPR2009State law requires the California Energy Commission (CEC) to assemble a report every other year with recommendations for policies to “conserve resources; protect the environment; ensure reliable, secure, and diverse energy supplies; enhance the state’s economy; and protect public health and safety.”

That’s a massive task, particularly during a time of flux for how we generate, manage and consume energy, and according to Jeff Byron, the presiding member of the committee that put together the Draft Integrated Energy Policy Report (IEPR) released this week, a few factors made the challenge even greater: the state financial crisis, staff furloughs and the stimulus package, which created new funds and programs for the commission to manage.

Speaking today at the final public hearing for the IEPR this morning, Byron said, “It’s not quite the IEPR I envisioned when I took on the assignment a couple years ago.” The committee hasn’t been able to address all of the issues it wanted to, said Byron, and it’s looking for more feedback on three issues in particular before it settles on recommendations: how to meet the state’s target for utilities to get 33 percent of their energy from renewable sources by 2020, how to “procure” electricity from renewables and conventional sources, and as the CEC’s Suzanne Korosec put it, “how to make hybrid market work a little more effectively.”

The 247-page document presented at today’s hearing touches on hot-button issues including the state’s low-carbon fuel standard, renewable portfolio standard and the lack of emissions credits available for power plants in the southern part of the state, and the smart grid buildout.

Of course, the challenges for building a cleaner, smarter power grid are many. Just integrating variable sources of energy (such as fickle wind and solar) into the power supply and building the transmission lines to support it requires years worth of deal making, financing, bureaucratic processing and government approvals.

distribution-system-cecBut according to comments submitted to the commission by utility Southern California Edison ahead of today’s hearing, another important piece of infrastructure is being overlooked as regulators develop policies for the smart grid buildout: the distribution system, which encompasses the network of power lines, substations, transformers and meters that connects the end user (your household, for example) to the transmission system.

“[M]ost of the smart grid technology discussion is confined to transmission issues and integration of renewable generation,” SCE writes. While the utility agrees these areas are “critical,” it points out that “the state’s energy policy goals will have significant impacts on the distribution system as well.”

distribution-system-smart-cecIt’s a critical piece of the grid upgrade, and not just in California. According to the final 2007 IEPR (which as SCE points out, dedicated a full chapter to assessing the impact of policy recommendations on the distribution system — it’s grouped in with transmission in today’s draft), 90 percent of all customer outages within California and throughout the U.S. were related to problems with distribution, and the system accounts for a larger share of energy losses (read: inefficiency) than transmission.

Addressing distribution is part of the hefty to-do list the IEPR has created. Today’s draft report recommends that the Energy Commission as well as the California Public Utilities Commission open a joint proceeding to analyze just how important distribution system upgrades will be for ensuring grid reliability and bringing distributed energy onto the grid at large scale. More research is needed, Byron’s team concluded, on how energy policies will affect the distribution grid:

For example, distribution lines may need to be reinforced with technology that can meet demand when on-site distributed renewable energy is not generating electricity. At the same time, upgrades, storage, or other resources may be needed to accommodate two-way flows from intermittent renewable power that is not dispatchable and is placed where it is convenient to the customer, but not to the grid.

In other words, as California races to reach its emission reduction and clean energy goals, and to upgrade its grid, a lot of unanswered questions remain. Regulators have limited resources and a running clock to answer them.

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