Cutting carbon: State refining strategy for slashing power plant emissions

By: DAVE DOWNEY - Staff Writer
Top regulator calls for more ambitious effort to combat global warming | Saturday, February 16, 2008 10:33 PM PST ∞

Utilities will have to cut back on carbon emissions from generators like the Encina Power Station in Carlsbad when the state's new greenhouse-gas emissions rules kick in.
JAMIE SCOTT LYTLE North County Times file photo
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California's top energy regulator wants utilities to be required to rely more heavily on energy efficiency programs and green power next decade to meet the ever-growing demand for electricity.

Those efforts, as well as a cap-and-trade system for carbon emissions, should be central to the state's emerging strategy to combat global warming, Public Utilities Commission President Michael Peevey said last week.

But even as Peevey recommends more ambitious goals for slashing greenhouse gas emissions, the state's utilities are saying they may not be able to meet the existing goals.

Utilities, including San Diego Gas & Electric Co., and industry observers say California's existing deadline for converting 20 percent of the state's power to renewable energy by 2010 will probably pass unheeded.

"I think there will be some challenges in pulling that off," said Scott Anders, director of the Energy Policy Initiatives Center at the University of San Diego, of the 2010 target. "I don't think SDG&E is going to be able to meet that."

While Peevey's proposal answers questions about what the Public Utilities Commission wants the state's energy future to look like, it raises more about how the state's utilities are supposed to get there.

Peevey's proposal
Peevey's 122-page proposal, released Feb. 8, is the Public Utilities Commission's response to the landmark 2006 state law that calls on California's industries and power plants to slash emissions of carbon dioxide 25 percent by 2020 ---- or in essence, to return to 1990 levels.

The California Air Resources Board has been given the task of enforcing the ambitious goals, and the agency is developing a road map for achieving them.

A draft of that so-called "climate change scoping plan," which will outline a broad framework for writing specific rules later, is expected to be completed by the end of the year, a board spokesman said.

The legislation requires the air board to first consult with the energy and utility commissions, to tap their technical expertise on utility operations.

And the air agency is getting that technical advice through Peevey's recommendation, which covers both electricity and natural gas.

Peevey recommended that utilities be required to employ all efficiency strategies that are deemed to be "cost effective."

He also proposed significantly increasing the state's target for requiring energy to be derived from clean, renewable sources, such as solar and wind power. Peevey did not, however, specify a new percentage or deadline.

Further, Peevey suggested that whatever renewable targets the Air Resources Board settles on should also apply, for the first time, to municipal utilities.

Peevey also recommended that the state incorporate the electric industry into a so-called cap-and-trade program called for in the landmark 2006 law, while leaving natural gas providers out.

Under the program, a market would be established for trading emissions credits.

If a particular utility could not meet its reduction target, it would have the option of purchasing emission credits from other utilities, or perhaps from companies in other industries, that are finding it easier to comply.

Gov. Arnold Schwarzenegger has been promoting the idea of a regional cap-and-trade program, and several Western states and Canadian provinces have pledged to join California's program.

There is a wide range of opinion in the electric industry on whether utilities should participate in emissions trading, according to the proposed decision.

But Peevey recommended that electricity producers become key players from the get-go, when the trading program is launched early next decade.

Out-of-state dirty power
In another significant part of his proposal, Peevey wants to prevent California's utilities from meeting the state's emissions targets by simply importing dirtier power from out of state.

He said he wants utilities to be required to count emissions not only from California power plants but also out-of-state generators they buy power from.

"By not covering imports directly in the system, it is likely that there would be incentives for the electricity sector in California to reduce its (greenhouse gas) emissions by importing more power from out of state, without necessarily reducing emissions into the atmosphere at all," he wrote.

"As environmental costs begin to make in-state generation more expensive, the incentive to begin importing more power from uncapped out-of-state power plants would be strong."

Even today, Peevey stated, while imported power makes up just 20 percent of California's supply, it accounts for half of the electric industry's greenhouse gas emissions.

According to the Air Resources Board, power generation is the source of a quarter of all California carbon emissions.

Anders said it only makes sense to count emissions coughed up in other states.

"If power is produced in Arizona and we consume it here in San Diego, we should be responsible for it," Anders said.

Currently, the San Diego utility imports 6 percent of its power from outside California.

Spokeswoman Jennifer Briscoe said about half of that is generated from burning coal and the rest comes from natural-gas-fired plants. She said the company's coal contract is due to expire in 2013.

Market manipulation feared
As part of its developing strategy to combat global warming, the air board already has set an emissions ceiling for new contracts that effectively bars California utilities from using coal power in the future.

That's because most coal-fired plants can't stay under the ceiling. Natural gas-fired plants generate slightly fewer emissions than are allowed under the 2007 rule.

In developing his proposed decision, Peevey said regulators considered recommending only an emissions cap without the opportunity to trade credits.

But he said he rejected that idea because a market could accelerate reductions, spur technological advances that slash emissions and more equitably spread costs among California's electricity customers.

Some utilities advised the agency to recommend against a trading system, or at least urge a delay to allow time for a national or West regional market to develop.

According to the report, the Los Angeles Department of Water and Power, for example, warned moving too quickly could leave the California market vulnerable to gaming and manipulation.

But Peevey concluded that moving forward right away is worth the risk.

He maintained that simply setting a cap for future power plant emissions would not produce nearly as much reduction as would a cap that employs a trading system to help each utility meet it.

Peevey said the agency also considered and rejected a carbon tax, saying that such a tax would work better if it were applied to all sectors of the economy, not just electricity and natural gas.

All for efficiency
Briscoe said the utility welcomed Peevey's call for "cost-effective" efficiency improvements, and noted the steps the utility has already taken to squeeze more electricity out of its existing generators and transmission grid.

She said the company's efficiency programs should shave the San Diego region's electricity demand by 487 megawatts over the next 10 years.

"That's like a power plant," she said.

Briscoe said the area's demand is growing at the rate of 2 percent, or 100 megawatts, each year.

Demand was roughly flat when the electricity crisis hit California and hammered San Diego County customers particularly hard in 2000 and 2001, but it soon began to creep upward again.

A megawatt is enough electricity to keep the lights on in 650 homes, the utility has said.

Anders, the energy center director, said requiring utilities to promote more efficiency ---- in the way buildings are designed, air conditioners operate and appliances are made ---- has the potential to save a lot of power and significantly curb carbon emissions.

"Efficiency is the bedrock of any long-term energy planning in California," Anders said. "You get your cheapest megawatts by not using them."

Beyond 20 percent, but how?
But Peevey's call to quicken the state's shift to renewable energy may meet more resistance; Briscoe acknowledged the utility probably won't make the current target of 20 percent by 2010.

Briscoe said the San Diego-based utility gets 5 percent of its power from clean, nonfossil-fuel sources. And she said the company has signed contracts that are expected to boost the green proportion of the overall total to 13 percent by 2010 and to 19 percent by 2011.

A portion of that total is contingent upon the utility's getting the green light later this year to construct a $1.3 billion, 150-mile transmission line called the Sunrise Powerlink, between Carmel Valley and El Centro, she said.

"Without the Sunrise Powerlink, there is a lot of potential energy development that will die out there (in the Imperial Valley) without having a mechanism for delivering it," Briscoe said. "To reduce greenhouse gas emissions, we have to have a way to bring in more renewables."

Still, Briscoe said his company is not worried about Peevey's undefined appeal to significantly increase the existing renewable-energy target.

"We look at that as a milestone, the 20 percent (requirement) by 2010," she said. "SDG&E fully intends to go beyond 20 percent."

Similarly, Steve Conroy, a spokesman for Southern California Edison, called the Peevey proposal "a constructive first step" for addressing geenhouse gas emissions.

Conroy said Edison, which serves several counties north of San Diego, gets 17 percent of its power from renewable sources but will have difficulty reaching the 20 percent target for two years from now. He said that is because Edison needs to construct new power lines to bring in significantly more power from the sun and wind.

Utilities that miss the deadline are subject to fines of up to $25 million a year, assessed at the rate of 5 cents for each kilowatt-hour a company falls short of its goal. However, recently passed legislation allows utilities to avoid penalties if insufficient transmission capacity is the reason why they weren't able to hit the target.

The California Energy Commission will consider whether to ratify Peevey's proposal March 12 and the Public Utilities Commission will take it up March 13.

The public has until March 9 to comment on the recommendation.

The proposed decision may be viewed at: http://docs.cpuc.ca.gov/efile/PD/78643.pdf.

Contact staff writer Dave Downey at (760) 745-6611, Ext. 2623, or ddowney@nctimes.com.

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Pre-Registration Comments[-]Go to Top

Snowbird-2 wrote on Feb 17, 2008 4:22 AM:California needs a lot of new power plants right away, as many as 15 full sized compound cycle gas fired plants. This will provide security in the event the Columbia river and Colorado River power plants have times of drought, and to replace older plants that are wearing out and make worse pollution than the new plants would make. This will buy time while California lets the new transmission lines be built to bring in power from the wind farms and the new central power plants using focused solar power to make steam to run conventional steam turbines and generators and to implement other projects that will take years. I fear these regulators and the state legislature are speeding down the road to force a new energy shortage that will make the terrible fiasco of a few years ago look like child’s play. Wind farms are great and more of them should be built, but sometimes there is not enough wind, especially in extremely hot weather so the BACK UP capacity is essential. All the public does is rail about global warming, and then proceed to block everything that needs to be done to provide us with adequate economical power. They object to the looks of power plants, wind farms, nuclear plants, and transmission lines. Others object because some bugs and animals may have to be moved out of the way. We must have redundant sources to provide extra capacity to provide for equipment maintenance and breakdowns especially during heat waves and natural disasters. It's OK to encourage conservation and energy efficient appliances but that must not be used as a mantra to excuse not building the necessary capacity plus adequate reserves. With just a minimum of equipment and capacity for normal use after everyone is painfully conserving there is no ability to provide extra for storms, heat waves, national emergencies business and industrial growth and to simply enjoy the pleasures of life instead if skimping. If these political obstructions and laws passed by the legislature which knows almost nothing about mechanical and electrical equipment and knows almost nothing about the contribution to the states economy of adequate low priced power, then this state is headed for years of increasingly hard times and budget deficits. Not only will us citizens be unnecessarily inconvenienced at every turn but the state will be billions short of tax revenue every year to provide the aid to schools, health care and all the other good projects it wants to provide.

LKF wrote on Feb 17, 2008 7:20 AM:This Peevey fellow must be another weak minded liberal. Carbon credits, carbon footprints. Such garbage being given to the People. Once again... Global Warming is a natural event. The Sun is making the decisions here, not mankind. Besides.. What's wrong with Carbon anyway? Afterall, it is what we are made from, including everything else. i.e. the Planet, the Solar System.. I wish the media would ask real questions and insist on getting the proof instead of just accepting the drivel that comes from these fools.

Ron wrote on Feb 17, 2008 7:52 AM:I smell taxes....
and this from the group who wanted to control the thermostat in your bedroom.

David wrote on Feb 17, 2008 8:08 AM:I agreee with "wrote on". Al Gore's plantation carbon imprint is "Bigfoot".

There it is wrote on Feb 17, 2008 8:40 AM:These people can't even figure out "wrote on" (see David), yet they think they understand global warming.

Ken wrote on Feb 17, 2008 8:54 AM:even if we burn biodegradable fuels in all power generators and mobile equipment, the carbon content is going to end up as CO2. Also, these fuels generally contain less energy per gallon,etc, than the traditional fuels. It seems the only way to lessen CO2 in the air is to use LESS energy, not different fuels -- unless we go nucular for power generation. ??

Paul wrote on Feb 17, 2008 9:10 AM:Anyone recall when Al Gore, when he was VP, wanted to tear down all the dams because they were blocking the rivers? More of your source of electrical power gone. Folks just keep on following your high priest of the environment, soon we will be back in the caves.

Mike wrote on Feb 17, 2008 10:22 AM:Thank goodness that Michael Peevey the president of the PUC is trying to do something about human caused global warming. Government taxes on electrical use are the answer. All proceeds to go to offset costs of installation of solar panels windmills and other non-carbon releasing energy. Even if the republiCON sell outs to coal and oil interest succeed in their campaign against a sustainable future win their evil campaign, we will be taxed. right now we pay a dollar or more of republiCON back door anti-regulation taxes directly to Big Oil. RepubliCON back door taxes are in the form of over priced products that are sold without competition or regulation. The back door taxes go to Big Oil and other corporate sponsors of CON radio and the RepubliCON party. These corporations especially Big Oil uses a huge percentate of their back door profits for coprorate executive compensation. At least with government taxes some money comes back to the public in the form of public benefit.

To LKF the earth and the solar system are made of carbon? Are you saying the earth is made of a 100% carbon? What percent do you think is carbon? What percent in our atmosphere is carbon? Any clue?

How much wrote on Feb 17, 2008 11:33 AM:Just how much are we really willing to give up to save the environment and the planet? While it may be nobel to say that we need to do as much as possible -- are we willing to do what it actually takes and reduce our standard of living, work more for less, give up some personal freedoms? How would folks react to the outlawing of anything larger than a 2.0 liter engine; one car per family; $6.00 per gallon gas, electric and natural gas rationing and a 75% tax rate. Works for me, how about you?

To How Much wrote on Feb 17, 2008 6:14 PM:You like that so much, move to where it's a reality, Europe. NOTE: There are many more people, like me, who emigrate from Europe to the US, than vice versa. Those that remain in Europe don't see fit to breed enough to replace themselves.

The only people who want to move en masse to Europe are North Africans and Pakistanis.

I wonder why that is?

Gringo wrote on Feb 17, 2008 6:57 PM:Al Gore did not invent the Internet, but he did make up global warming.

Karl wrote on Feb 17, 2008 7:10 PM:Now that's funny Gringo.

Roberto1 wrote on Feb 17, 2008 9:30 PM:I have an idea, Lets increase importing polluted power from Mexico, Canada, Texas etc. and build more of those beautiful power transmission lines that help us keep our regular Forest burns on schedule. Forest fire smoke is good pollution and we need to help support other countries and states. We don't need anymore good paying jobs as they will only make property values rise anyways....Long live the environmentalist who will save us and let everyone else die!

Jay wrote on Feb 18, 2008 10:18 AM:"Snowbird-2" is right: We need more power plants. Efficiency is wonderful, but we still need to supply 15-20 million new people in California in the next 50 years, even if they are efficient users.

Poor "Mike" is a product of our school system. Here are the elements in the earth: Approximate % by weight
Oxygen 46.6
Silicon 27.7
Aluminum 8.1
Iron 5.0
Calcium 3.6
Sodium 2.8
Potassium 2.6
Magnesium 2.1
All others 1.5
Note that carbon is .03% of earth while only 380ppm or .038% in the atmosphere, and 18.5% in human body. So it is kind of important.

"Ron" is right: Lots of hidden new taxes and costs brought to you by the people who know how to run your life better than you do.

"To How Much" is right: Forward moving cultures make babies because they have optimism.

Concerned-1 wrote on Feb 20, 2008 8:44 AM:It's the economy stupid! Stop the global warming hysteria before we go broke. This kind of legislation should not even be considered in these times. Honestly, have we lost all common sense? For the Mikes in the world, please reference India, China, Mexico and others for world pollution stats. Whatever we do will make no difference, other than to spiral us into a full depression, or worst.

James wrote on Feb 21, 2008 8:35 AM:Those who do not believe in climate change are one of the following: misinformed, very low in IQ, refuse to change their ignorant and selfish lifestyle or want to live in a big fat lie in which they refuse to change and thus find comfort in living in this "lie". Many if not all of the top professors from MIT, Harvard, Scripps Research, Caltech and so forth would agree that humans are the culprit in climate change. Human-induced activities of burning fossil fuels has to have a consequence. Look at LA, who caused all that pollution...only man's activities. The rainforest, again...selfish man. The PPM (parts per million) concentration has sky rocketed from 275 PPM to 380 PPM. What this means is that we the human race are adding another "blanket" on this planet. More green house gases means hotter temperatures...it's that simple. Those who refuse to care/believe about climate change would most likely be the ones to die in the chaos of riot and war. Those who do care, will be the ones to survive and thus pass on "their" genes in a dying planet.

Tony wrote on Feb 22, 2008 7:18 AM:Ok James...here is a math question for you...take all the known oil reserves that have ever existed on our planet...calculate the tons of carbon contained in the oil. Now, look up the surface area of our planet and convert it to square inches...now take you 380 ppm and subtract 275 ppm and calculate the tons of carbon in that "difference"...and you will find that all the oil ever known to exist only accounts for about 1/3 of the increase in carbon in the environment in the last 30 years. So, even if we burned all the oil at once, its not enough to account for the recent increase in carbon levels...so my question for you is, where did the other carbon come from? I will give you a hint....look to the west at sunset.

James wrote on Feb 22, 2008 8:32 AM:Tony

Here are the CO2 sources:
Carbon dioxide is manufactured mainly from six processes.

As a byproduct in ammonia and hydrogen plants, where methane is converted to CO2; From combustion of wood and fossil fuels; As a byproduct of fermentation of sugar in the brewing of beer, whisky and other alcoholic beverages; From thermal decomposition of limestone, CaCO3, in the manufacture of lime, CaO; As a byproduct of sodium phosphate manufacture; Directly from natural carbon dioxide springs, where it is produced by the action of acidified water on limestone or dolomite (Wikipedia) Tony, I wish climate change is a lie, but the overwhelming evidence indicates that man is changing the ecosystem on a grand scale.

Tony wrote on Feb 22, 2008 10:17 PM:James...I am sorry, you flunked the test...what you point out may be partially correct, but the total amount of carbon, or CO2 from these sources is very minor when compared to the rest of the sources that drive atmospheric concentrations of CO2....I didn't say we were not experiencing climate change, I was pointing out that most of the increase in carbon didn't come from oil even if we used all the oil...c'mon, do the math its not that difficult.

James wrote on Feb 23, 2008 6:32 PM:Well Tony, I was a biology major not a math major. I'm pretty rusty in my calculus, howabout you show me the calculations. So in a nutshell, you believe this is a cyclic event caused by the sun and not by man. You could be right or wrong. Once again, I wish you were right, but I really don't think you are.

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