Sunday, July 3, 2016

A Perfect Correlation - US Electricity Price v Consumption

Subtitle: A Bit of Gathering Into Groups Gives Good Results

It is not often that one creates a graph using actual data and discovers an almost perfect linear relationship.   It is even more rare to have a software package calculate the least-squares trend line and obtain a correlation coefficient, R-squared, of 0.99 or higher.   Yet, that is exactly what occurred for data from calendar year 2014 for US residential electricity consumption per customer, and average price per kWh.    The graph and simple statistics are shown below, then a discussion.   Note the R-squared value of 0.9997, indicating an almost perfect correlation.  
Figure 1.   Data from US Energy Information Agency, by state
Shows 39 states, excludes 10 states with lowest prices and Hawaii
This article follows another SLB article (see link) that ascribes the relatively higher price for residential electricity in California compared to the US average to mild climate and large population.  Conventional wisdom is very wrong in blaming solar power and wind power for the higher California prices.  

With the data ready at hand from US Energy Information Agency files from their website, it was a simple matter to sort the data for each state by annual average residential price in cents/kWh.   Being previously aware that low residential prices tend to correspond to high consumption, and vice-versa, inspection of the data for 2014 confirmed that relationship.  However, when the data is grouped into quintiles, a convenient grouping as there are 50 US states with ten members in each quintile, an almost perfect straight line resulted, as shown in Figure 1 above.   However, there are only four data points in Figure 1.   

The R-squared of 0.9997 resulted when only the four quintiles with highest prices are graphed, that is, the quintile with lowest prices was excluded.  Also, Hawaii is excluded as a high-priced outlier.   More on that in a moment.  

The data for each quintile is shown in table form below. 

Quint  kWh/y      Cents/kWh
1 13,528       9.67 
2 12,178     10.78 
3 11,445        11.89 
4 10,550     13.15 
5 7,311     17.58 

Next is shown in Figure 2 the graph of all five quintiles for 49 states - Hawaii is excluded as being a-typical and an outlier.   This graph has only a slightly lower correlation coefficient, R-squared of 0.9931.   

Figure 2.   Showing 49 states (excludes Hawaii)
The conclusion that can be drawn is that there is indeed a correlation, and a very good correlation, between average price for residential electricity and the quantity of electricity consumed on an annual basis by each utility customer.    California is in the fifth quintile for high price but low consumption (16.2 cents/kWh and 6,741 kWh/yr/customer).  Other states with California in the fifth quintile are almost all in the North East sector, Massachusetts, Vermont, Rhode Island, New York, Maine, New Jersey, and Connecticut.  Example states at the other extreme, in the first quintile are Louisiana, Arkansas, and Oklahoma - all hot, humid, and consuming 14,000 kWh/yr/customer on average, more than double that of California. 

In fairness, it should be noted that the high correlation coefficient only results when the quintiles are graphed.  For all 49 states individually, again excluding Hawaii as an outlier, a much lower correlation coefficient results, of R-squared 0.546.

UPDATE - 7/7/2016:  The graph shown below as Figure 3 is a repeat of Figure 2 above, with the highest (in red) and lowest (in green) states shown, as their average price's deviation from the national trend line.   California, the green circle at top left, is 2 cents below the trend.  Other states substantially below the trend include Maine, Colorado, Illinois, Utah and Montana. Those states with the highest deviation above the trend are Alabama, South Carolina, Tennessee, Mississippi, Connecticut, Louisiana, Maryland, and Texas.  -- end update
Figure 3 - Showing individual states
with greatest deviation from trend
as colored circles



Roger E. Sowell, Esq.
Marina del Rey, California
copyright (c) 2016 by Roger Sowell - all rights reserved


Saturday, July 2, 2016

Why California Electricity Costs More than US Average

Subtitle:  Mild Climate and Large Population Contribute to Prices

One of the more amusing aspects of writing a blog and commenting on other blogs is the almost unending stream of false information and wrong beliefs one encounters.   As former President Reagan said, "It's not that our . . . friends don't know anything, it's that so much of what they know just isn't so."  In this case, these people get to vote, and make their opinions known to elected officials, so it is somewhat important that what "just isn't so" gets pointed out.  Hence, this post on the disparity between US average electricity prices and the higher prices in California.   The facts show that California residential electricity use is below the national average, and the price per kWh consumed is slightly above average.  The reason for the higher price is low electricity consumption in a mild climate, by a very large number of customers, approximately 15 million customers. 

The common wisdom (that "just isn't so") is that California electricity prices are 1) higher than the rest of the country, 2) higher than they should be, and 3) higher because of stupid California policies to build renewable energy plants such as solar and wind.   Each of those three things are addressed in turn below. 

Higher Than Rest of US

Figure 1
California residential electricity is approximately 25 percent higher than average, but not the highest in the country.  Data from EIA for 2014 shows that California is 9th highest, that is, 8 states have higher residential electricity prices.  

In tabular form, the states with highest residential rates and their 2014 prices in cents/kWh were:

CA 16.25 
RI 17.17 
MA 17.39 
VT 17.47 
NH 17.53 
AK 19.14 
CT 19.75 
NY 20.07 

HI 37.04

Those are Rhode Island, Massachusetts, Vermont, New Hampshire, Alaska, Connecticut, New York, and Hawaii.   The same data is shown in Figure 2, below, as a bar chart. 


Figure 2
What is also true of California electricity prices is that they have been a bit higher than the US average for many years.   Even in the late 1970s and early 1980s, it was common knowledge in the chemicals and petroleum industries that electricity prices in California were higher than in most other states.   

Therefore, it can be seen from the above that California residential electricity prices are a bit higher than the US average, but by no means are the highest in the US 50 states. 

Higher Than Should Be

California residential electricity prices are where they are, and where they should be, due to a number of factors.   The most important factor is the state has a large population, 38 million people with 15 million residential customers as of 2014, but has very low electricity consumption per customer.  The low consumption per customer is due to the mild climate with low humidity.  Or, as the EIA states, "In most of the more densely populated areas of the state, the climate is dry and relatively mild. More than two-fifths of state households report that they do not have or do not use air conditioning, and almost one-seventh do not have or do not use space heating. Residential energy use per person in California is lower than in every other state except Hawaii."    Things have changed, but only slightly, since EIA wrote that, as Maine has barely edged out California for second place in residential electricity use per customer.  

The second important factor, after the mild, dry climate, is the large infrastructure for transmission and distribution that must be built over mountainous areas within the state.  In contrast to the nearest state in size and population, Texas, California has many more mountainous areas where transmission and distribution costs are much greater.  

Combined, a low per-customer electricity use and large, costly network or grid requires that each kWh sold command a higher price to pay for the grid's assets.  The utilities are allowed a 10 percent return on capital employed, so smaller volume of electricity sold must command a higher price.  

Finally, the 16 cents/kWh and 562 kWh/month, on average, yields a lower electric bill for the average customer compared to the US average.   The average bill for a California customer is only $91 per month, compared to the average for the US at $114 per month. 

The data for all states and DC are shown below, in kWh/month:  (Note, US average is 911.3 kWh/month)




Figure 3
  HI 506.4 
 ME 549.4 
 CA 561.8 <====
 VT 568.5 
 RI   583.0     
 NY 591.0 
 AK 605.1 
 MA 614.9 
 NH 619.4 
 NM 633.4 
 MI 653.6 
 NJ   669.7 
 CO 687.4 
 WI   694.4 
 DC 721.5 
 CT 729.7 
 IL    745.2 
 UT 746.7 
 MN 809.6 
 MT 853.8 
 PA    853.9 
 WY 863.2 
 IA   891.4 
 NV 894.2 
 OH 901.3 
 US 911.3 
 KS 928.0 
 OR 929.5 
 DE 949.8 
 ID    982.1 
 WA 1,005.5 
 IN 1,008.6 
 AZ 1,012.7 
 NE 1,022.4 
 MD 1,024.9 
 SD   1,045.6 
 FL   1,092.3 
 MO 1,094.8 
 NC 1,135.7 
 OK 1,137.7 
 AR 1,142.6 
 GA 1,151.5 
 WV 1,158.0 
 TX 1,158.1 
 VA 1,171.5 
 KY 1,177.3 
 SC 1,186.6 
 ND 1,239.6 
 MS 1,247.9 
 AL   1,264.7 
 TN 1,285.8 
 LA 1,291.4 

Higher Due to Renewable Energy Policies

This third "just isn't so" reason is easy to debunk after showing in point 2, above, that California residential electricity prices are not higher than they should be, nor higher than the US average.  As shown above, both the average monthly bill, and the consumption in kWh/month are less than the US average.  In fact, the average consumption per customer is third lowest out of 50 states plus the District of Columbia, DC. 

Yet, the impact of renewable energy policies in California may have some small impact on electricity prices.  Solar power, and wind power are addressed separately. 

Solar Power

Solar power, as shown earlier on SLB, had almost zero impact in California as little as 5 years ago.  Only in the past 5 years, since 2011, has solar power been added at the grid scale.  At present, there is almost 8,000 MW of solar power installed, almost all of which is PV.  The remainder is solar thermal.   The contribution of solar power is small, at approximately 6 to 7 percent of annual power sales.  It is clear, therefore, that the impact of solar power could not be a factor before 2011, yet California prices (see Figure 1) were 25 to 30 percent higher than the national average since 1990. 

Wind Power

The contribution of wind power in California has increased from 1.5 percent in 2001 to approximately 6 percent in 2014 of all electricity generated in-state, per the California Energy Commission data.   The fact is that wind resources in the state are few in number and below average in output, as measured by percent of installed capacity.  California wind turbines produce approximately 22 to 26 percent of installed capacity, compared to the Great Plains states of 45 to 42 percent of installed capacity.  Essentially, the wind blows stronger and more steady in the Great Plains states.    

It can be seen, then, that wind power contributes only a small fraction of total electricity in the state, and the electricity prices are higher due to low average consumption and a large asset base.  There can be no validity to the argument that policies on wind energy cause California electricity prices to be higher than the US average. 

Roger E. Sowell, Esq.
Marina del Rey, California

copyright (c) 2016 by Roger Sowell - all rights reserved








Thursday, June 30, 2016

California Electricity Rates - Residential - Not That High

Subtitle: Annual Average Price Keeps Pace With Inflation

This post is likely to create a bit of controversy, as the chart Figure 1 shows that annual average residential electricity rates (cents/kWh) have kept up with inflation but not increased in real terms since 1996.  That is in stark contrast to the popular wisdom that electricity rates in California are out of control and skyrocketing due to shutting down nuclear plants (two of them in 2012) plus building expensive solar power and wind power.   What is actually going on is more complex. 

Figure 1.  Nominal prices adjusted for Consumer Price Index (CPI)
The data in Figure 1 for state-wide annual average residential electricity prices are from US Energy Information Agency (EIA) data; while the inflation adjustment is from the US Consumer Price Index.   The overall trend from 1990 at 10 cents to 2016 at 16 cents is a mere 2.5 percent compound annual growth rate. 

The argument that solar power and wind power have increased electricity rates is simply not credible, especially so when the very minor contribution of each is considered.  Solar contributed only 6 percent of the entire grid load, and wind only 5 percent in 2015 per the California Independent System Operator, CAISO.   Only five years earlier, the contribution of each was almost zero.  

Instead, the flat trend since 1996 is due to the steadily decreasing cost of natural gas, and the steadily increasing percentage of natural gas in the generation mix.  Also, California has almost constantly replaced old, inefficient gas-fired plants with new, state-of-the-art Combined Cycle Gas Turbine plants with much greater efficiencies.   A new CCGT plant uses approximately one-half the natural gas as an older steam plant, for the same power output.   Therefore, the state is using much less gas per kWh generated, and the price of natural gas is much lower than in earlier years.   (As an aside, we all have the oil and gas companies to thank, with their expert use of precision directional drilling (PDD) and hydraulic fracturing, for bringing great quantities of natural gas to market and depressing the gas prices). 

It is also a fact, however, that electricity rates are quite complicated in California.   The state has a multiple tier system for power pricing based on the kWh used each month.  The rate structures have changed over the years.   The complex, and a bit un-fair system has caused a new and improved system to be developed by the California Public Utility Commission.  The CPUC website for the improved system, and the process to develop that system, is at "California Residential Electric Rate Redesign"  see link

Below is a portion of the Rate Redesign website statements:

"In 2001 during the energy crisis, California passed legislation that froze volumetric electricity rates for a large portion of residential electricity usage (i.e., usage less than 130% of the baseline energy allowance or customer tiers 1 and 2). As utilities' costs increased over the years, because tiers 1 and 2 were frozen by law, increases could only be borne by those customers consuming above 130% of baseline levels (or customers in tiers 3 and 4). As a result, the difference between the lowest and highest tiers has become very large, and rates for tiers 3 and 4 to more than double those for tiers 1 and 2.

In June 2012, the CPUC opened a Rulemaking to examine existing residential electric rate design, with the intention of ensuring that rates are both equitable and affordable for the foreseeable future, including for low-income customers.

On October 7, 2013, Governor Brown signed into law AB 327 (Perea), which allows the CPUC greater flexibility in setting residential rates, as well as:

o  Repeals rate increase limitations on energy usage tiers 1 and 2 (up to 130% of baseline) to allow rate reduction in tiers 3 and above.

o Revises rates for low-income ratepayers, pursuant to the CARE program such that the aggregate discount is between 30% and 35% the bill.

o Limits fixed charges to $10/month for non-CARE customers and $5/month for non-CARE customers.  (Should read $5/month for CARE customers -  Roger)

o Fixed charges may not increase by more than the consumer price index each year, starting on January 1, 2016.

o Allows for a reduction in the number of energy usage tiers in residential rates, but requires rates to have at least two tiers.

o Prohibits mandatory or default time-of-use pricing before January 1, 2018.


o Requires the CPUC to develop a new net metering rate, which would become available on January 1, 2017."

Conclusion

The state's average prices are keeping up with inflation, and no more.  However, the disparity between low users (less than 130 percent of the baseline kWh per month) and those with greater consumption (more than 130 percent of baseline) led to rate reform.  It is entirely possible for a low-use customer to be paying approximately 15 cents per kWh, while a residence with triple the baseline use would be paying 30 cents per kWh, or more.  

It is also clear from the chart in Figure 1, with the annual statewide average at 16 cents, solar power and wind power have purchase power agreements that are more than attractive to new investors.  It is unfortunate that wind power in California has already been essentially built-out, as there are few remaining locations with advantageous wind.  However, solar power is an entirely different story. 

The state has almost limitless square miles of otherwise un-used land with the famous California sun beating down daily.  Recent installed costs for grid-scale solar power plants indicate approximately $2,000 per kW installed, and with the California sun bringing 26 percent annual output, a plant can be built and operated at a 10 percent return on investment with power purchase agreement of 10 to 11 cents per kWh.    That is far, far less than what the utilities must pay for daytime power in the summer.    That is a bit more than what the utilities pay for incremental power in the winter daytime, however the amount of power the solar plants produce in winter is also much smaller.  On balance, the solar power plants are quite attractive at $2000 per kW.   More reductions in installed costs are imminent, so that $1800 and even $1500 per kW are only about 4 to 5 years in the future. 

There are some grid operating implications, but those will be explored in future articles. 

Roger E. Sowell, Esq.
Marina del Rey, California

copyright (c) 2016 by Roger Sowell - all rights reserved

High Speed Rail in California Stuck At The Station

Subtitle: Lack of Funds Makes HSR Fizzle

High speed rail in California has hit yet another snag, this one likely to be fatal.  The almost-$100 billion project to connect San Diego with both Sacramento and a branch to San Francisco is too short of funding and is likely to die, as it should.   The article by Bloomberg (see link) "California Hits The Brakes on High Speed Rail Fiasco" has the realistic portrayal of the proposed project: too expensive, too slow to attract customers, and too few customers likely to ride, resulting in perpetual subsidies to cover the losses.  
Artist rendition of California HSR.  

The fatal snag is the almost zero funding resulting from a recent auction of climate-change securities, proceeds from which the rail would be built.  

As with UK's nuclear plant proposed for Hinkley Point C, with funding woes of its own, the California HSR has "no investors . . . lining up to fill the $43 billion construction-budget gap," per the Bloomberg article. 

The article goes on to list four of the reasons the HSR project is doomed to failure: "the rail project wouldn’t keep its promises. To do so, it would have to be the fastest, most popular bullet train in the world, with many more riders per mile and a much greater percentage of seats occupied than the French and Japanese systems -- a highly unlikely prospect."

The problems are legion with the California HSR proposal.   First, it is more of a milk-run rail than a high-speed rail.  As I wrote several years ago for a very-highly placed client, actually a member at that time of the HSR board, having a HSR route stop multiple times between terminus stations (San Diego and Sacramento) defeats the entire purpose.  The rail is trying to compete with the time required, cost, and inconvenience of air travel.   

For the typical businessman, it is quite easy to board a plane in San Diego and be in Sacramento approximately 90 minutes later.  With arrival at the San Diego airport for security check-in requiring a half hour to one hour, the entire trip is two to two-and-one-half hours.   Starting the trip in Los Angeles instead of San Diego cuts only 15 minutes off of the trip.   

Also, an air trip from Los Angeles to San Francisco requires 75 minutes in the air, and with check-in approximately two hours and 15 minutes.   The HSR is to run from Los Angeles to San Francisco in two hours 45 minutes.  With time for boarding, that is easily three hours or a bit more.   That is the promise.  What is the likely reality?   Rail boarding will become just as time-consuming as today at airports, once the inevitable terror attacks occur at a few train stations in the US.   The travel time will then be extended by at least an hour. 

The train would start at Union Station in Los Angeles, then make several stops on the way to the high desert where the speed finally picks up.  There are then more stops in the Central Valley, and slower speed as the train reaches the Bay Area and makes yet more stops.   

The practical route is also the least popular, politically.  A bit of history with rail systems shows that a city with a train passing through it has economic success.   Cities off the rail line wither.   For that reason, the current routing for HSR has multiple stops in the Los Angeles basin, and multiple more stops in the Bay Area.    The smart thing to do (but politically disastrous) would be to route the train from San Diego to Palmdale, with Los Angeles Area travelers taking a shuttle train (or cars) to Palmdale to board the HSR.  Bypassing Los Angeles entirely was simply not an option, according to my source on the Board.   However, it is equally certain that Los Angeles' future is not dependent on anything as trivial as a HSR stop, not at this point in history.  

Roger E. Sowell, Esq.
Marina del Rey, California

copyright (c) 2016 by Roger Sowell - all rights reserved

Monday, June 27, 2016

Designing an Electrical Grid From Scratch

Subtitle: Ranting and Raving Does Not Produce A Useful Result

Sometimes one just has to laugh at the things others complain about, and even rant and rave about.  A blog article I wrote recently produced a rant (on WUWT), about how the California electrical grid and its operation are grossly unfair and should never have been allowed to reach the condition that it is in today.   The chief complaint, it appears, is the price paid by residential customers, what is known as the rate structure.   California does have some high rates, it is true, by law there are a few tiers or levels of price depending on the season and how much power one uses.   The more use in the summer during peak
California Energy Commission - major electric transmission lines 
demand, the higher the price.   Conversely, low use in Spring during offpeak hours has a low price. 


Another loud complaint is the use of renewable generating resources on the California grid. Most of the howls of indignation appear to be directed at solar power and wind power systems.   It seems that geothermal is not on the list that causes anger.    The utter confusion, indeed ignorance, of how hydroelectric power is treated as a renewable source or not is perhaps understandable.  Basically, most systems of 30 or smaller MW count as a renewable, while most larger systems do not.  

I requested the unhappy commenters to provide their solutions to how California should proceed, what would and would not be included in their ideal grid.   Their goal, of course, is to have cheaper power.    No response as of this date, however.   It seems it is much easier to complain than it is to offer workable, sound solutions.    I should point out that I have never seen a utility reduce their rates when adding new generation assets, or for transmission or distribution assets.   In fact, where nuclear power plants are being built, the utility (in Georgia, USA) obtained a special law from the state legislature to increase customers' power bills for the several years of the nuclear plant's construction. 

Therefore, I put together a few items that one should, and in some cases must consider (laws of many types play into the electricity issue).  

California already has quite a mix of generating types, including nuclear, gas-fired, petroleum coke-fired, oil-fired, diesel engines with generators, geothermal, hydroelectric, wind, solar PV, solar thermal, biogas, and biomass.   Some storage is already provided by batteries, pumped storage hydroelectric, and a gravity rail system is under construction.  There are mandated combined heat-and-power (CHP) systems that replaced standard boilers.   In the gas-fired category, there are at least three types: steam, combined cycle gas turbine (CCGT), and peaker plants or simple cycle gas turbines.   However, at least a few peaker plants are also CCGT.  

Below is a list of generating technologies, with perhaps others existing that do not readily come to mind after a bit of research.    In no particular order, then, here is a list of 46 generating and 7 storage possibilities.   Note:  BL denotes Base Load design, LF denotes Load Following.   There are substantial initial cost and operating cost implications for Load Following vs Base Load designs.   Acronyms may be familiar to readers, if not I can provide a link to a resource. 

1 Nuclear BL PWR - AP-1000
2 Nuclear BL PWR - EPR
3 Nuclear BL BWR - ABWR
4 Nuclear BL SMR
5 Nuclear BL LFTR  - MSR Thorium
6 Nuclear BL HTGR
7 Nuclear BL Fusion - Tokamak
8 Nuclear BL Fusion - LIFE
9 Nuclear - LF PWR - AP-1000
10 Nuclear - LF PWR - EPR
11 Nuclear - LF BWR - ABWR
12 Nuclear - LF SMR
13 Nuclear - LF LFTR  - MSR Thorium
14 Nuclear - LF HTGR
15 Nuclear - LF Fusion - Tokamak
16 Nuclear - LF Fusion - LIFE
17 Coal Rankine - Med Pres
18 Coal Rankine - USC
19 Coal Gasified - IGCC
20 Hydroelectric Large
21 Hydroelectric Small
22 Natural Gas Rankine
23 Natural Gas CCGT
24 Natural Gas SCGT
25 Natural Gas Methane SMR - Fuel Cell
26 Geothermal Rankine
27 Wind Onshore HAWT
28 Wind Onshore VAWT
29 Wind Offshore HAWT
30 Wind Offshore VAWT
31 Solar PV - utility scale
32 Solar PV - residential demand reduction
33 Solar Thermal w/o storage
34 Solar Thermal w/storage
35 Solar Pond - Rankine
36 Biomass Burn - Rankine
37 Biomass Synthetic Methane (Park process)
38 Biogas Methane collection
39 Wave Various
40 Tide         Turbine
41 Ocean Current Turbine
42 OTEC Thermal - Rankine
43 River Current - turbine
44 Oil         Rankine
45 Diesel Engine
46 Natural Gas ICE engine - cogen and tri-gen
47 Storage Pumped Hydroelectric - onshore
48 Storage Pumped Hydroelectric - offshore - MIT spheres
49 Storage Pumped Hydroelectric - combined onshore and offshore
50 Storage Battery
51 Storage Capacitor
52 Storage Gravity - rail

53 Storage Compressed air

With those as the available cards in the proverbial deck, one must then have solid answers to a few dozen questions (or issues) about electrical grid design and operation.   Below are listed just a few of the hundreds of issues that must be resolved in an electrical grid.   I pose these to the ranters and ravers, with the full expectation that they will not ever provide any answers.   Perhaps merely reading the questions will give them pause, and a bit of respect for a grid as large and complex as the California grid.   

1. Power grid first of all must be safe
2. Power grid second, must be reliable
3. Power grid third, must sell affordable power
4. Utilities must obtain a reasonable return on investment
5. Power grid must meet all load conditions, all the time 
6. Account for variations in demand daily, weekends, seasonal
7. Account for planned and unplanned asset outages
8. Account for adverse weather, earthquakes, fire, flood, wind, tsunami
9. Account for blackouts and brownouts
10. Account for fuel supply issues including disruptions (coal, natural gas, etc)
11. Account for available space (if any) on railroads for coal imports from other states
12. Account for growth in demand, if any
13. Account for environmental impacts - wildlife, air, water, soil, radiation, noise, explosion, etc
14. Account for transmission and distribution systems
15. Account for customers' ability to pay - poor, elderly, etc
16. Account for power attributes as attracting or deterring commerce and industry
17. Pricing must also pay utilities for fuel and other operating costs
18. Account for critical services - hospitals, life-support systems at residences, etc
19. Account for cooling water, river, lake, ocean, or air-cooling, mixed-cooling
20. Account for customers' installation of solar on property, and wind; will you buy power from individuals?
21. Account for other states with offers to sell power to California, yes, no, what conditions
22. Account for large industry or commercial sites that self-generate, will you be their backup?
23. Account for large industry or commercial sites that produce excess - will you buy?
24. Account for location, siting, of generating assets, and environmental justice issues
25. Account for location and siting of transmission assets, distribution assets
26. Will you cooperate in a regional grid, or a very large regional grid?
27. For experimental technologies that need research and development - will you fund this?  How?
28. How will you determine acceptable pollution emissions to air, water, soil, and via radiation?
29. What levels of animal, bird, and fish deaths will you accept and how to justify these?
30. What level of grid reliability will you deem acceptable, and how to justify this? 99% or higher?
31. How will you ensure that grid reliability is uniform across all areas, so no group is discriminated against?
32. How will you price the power sales, by residential, commercial, industrial, transportation, or other method?
33. Will you have a flat rate, or a tiered pricing system, and why?
34. Will you encourage efficiency in use, or profligacy, or be neutral, and why?
35. How will you address energy profligacy by a rich few, and the increased generation assets that requires?
36. If nuclear is part of your assets, who pays for a nuclear disaster and related deaths? Property damage?
37. How will you bring electricity to a very small user in remote areas?  Not at all?  
38. Will you have above-ground or in-ground distribution, where and why?
39. Will you allow distributed generation, if so, at what size and where? 
40. How will you address the disparity in use vs location in California, with coastal areas
having mild summers and winters thus low usage, but inland areas
. having hot summers and cold winters thus much higher usage? 
41. For gas-fired peaker plants, if you have those, how will you regulate their use?
42. For large hydroelectric plants, if you have those, how will you decide where to put them?
43. How will you decide when to retire an asset, either generation, transmission, or distribution systems? 
44. On a daily and hourly basis, how will you choose which generating assets to run, which to order to stand by, and which to hold in reserve? 

45. How will you ensure complete compliance with all Federal Laws and regulatory agencies, including but not limited to FERC, Nuclear Regulatory Agency, PURPA, Clean Air Act, Clean Water Act, various national energy policy acts, and state agency regulations such as California Energy Commission, California Coastal Commission, California Public Utility Commission, California Independent System Operator, California State Water Resources Control Board, and California Air Resources Board? 

Have I any experience in any of these issues?  Absolutely, but just a bit.  My engineering experience includes economic justification and preliminary design of a CCGT plant that was installed and is still running near Houston, Texas at a large chemical plant.   I also performed a make-or-buy analysis many times, one notable example was for nuclear power to a large refinery using a small reactor.  Also, I did an economic justification with technology selection, and sizing for a large hydroelectric project overseas.  I had the nuclear power course in undergraduate school for nuclear chemistry, physics, reactor design, and remainder-of-plant design for multiple types of reactors.   I had a full guided tour of a large nuclear reactor in Perry, Ohio with a group of fellow engineers.  I was assigned to analyze completely the fiasco of the South Texas Nuclear Plant design and construction process, then report on the entire matter to my employer.  I have evaluated and made recommendations to several clients on their make-or-buy decisions for both electricity and steam in their large refineries and process plants.   As an attorney, I don't discuss my clients or my cases.  It is sufficient to say that I am quite familiar with many of the legal requirements for grid-scale electrical systems.  

With California presently in a crisis summer, with high loads on the grid and inadequate natural gas supplies due to the Aliso Canyon storage facility problems, it is not surprising that the grid is a popular subject.   Everyone seems to know what California should do.  It is easy to rant.   I wonder how many, if any, could provide answers to any of the issues above.  

Roger E. Sowell, Esq.
Marina del Rey, California

copyright (c) 2016 by Roger Sowell - all rights reserved