Sempra Energy, the San Diego-based parent of The Gas Company and San Diego Gas & Electric Co., spent the last 12 years building up new companies outside its regulated utilities.
Executives say they plan to spend the next five years investing in Sempra's utilities and in renewable power.
The North County Times sat down with three Sempra executives on Tuesday: Neal Schmale, chief operating officer and president of Sempra Energy; Mike Allman, who was at the time CEO of Sempra Generation but has since moved over to become CEO of The Gas Company; and Darcel Hulse, president and CEO of Sempra LNG. What follows are selections from those conversations, each of which was held separately.
On greenhouse gas emissions and related regulation
Schmale: Our strategy is really, really consistent with trying to develop a low-carbon footprint. We also think the natural gas infrastructure business is good business. We're still in business to be in business, but you tend to be more successful in business if the thing you're doing is consistent with the great flow of history, and right now the great flow of history is toward less carbon. ...
Inevitably, through some means or other, the world is going to effect some way of getting greenhouse gases down. Whether or not it gets through now or later, or what form it gets through, is a different issue ...
To be blunt about it, we think probably the best thing from the standpoint of being simple to administer and so forth would be a carbon tax. If they just had a carbon tax, it would be easy to administer, it would be fair.
Sempra's strategy for the future
Allman: The core is renewables (energy production), solar in particular.
We have a goal to be the first company to own and operate 500 megawatts of solar power. We looked at all the technologies, and we think photovoltaic panels are the way to go. In the desert where you have abundant sunshine, you build it at scale so you can drive the cost down; it's near already existing infrastructure.
Hulse: With a photovoltaic system, a cloud comes over, you stop electricity production just like that.
But we have to provide a steady supply. How do we provide that? Well, nuclear power can't respond like that, coal power can't respond like that. Gas power plants are the only ones that can respond quickly, that can pick up the load and keep us from shutting down. I've always maintained that without gas, we cannot have renewable energy.
Some thoughts on solar energy
Allman: Solar is scalable. You can add to an existing plant, like we have at El Dorado (outside Las Vegas).
You can bring in the guys and install it and once you have half a megawatt, plug it right into the grid, move to the next one ... As a rule of thumb, it takes eight acres of solar to get one megawatt ...
There's plenty of land. I ran the rough numbers once: There's enough desert in Nevada to power the whole country. And we (Sempra) own four square miles out there already ... California is our biggest customer. There are others, but they can't compare to California ... solar costs about twice as much per unit of electricity as gas, and about twice as much again for coal. But no one is building new coal plants any more.
Why aren't utilities going to meet the state requirement to have 20 percent renewable power by 2010?
Allman: Companies made bids to build renewables that were too low.
Then they came back (to the utilities) and said, we need the price to be a little higher to make it work. Then they'd come back again, and ask for the price to be higher again, and the utilities couldn't do it.
All these utilities signed plenty of contracts to meet the requirements, but they were with these companies. We've tried to be consistent and do what we say we're going to do.
To go nuclear, or not
Allman: We have no plans to build nuclear.
On the importance of smart meters
Schmale: Obviously we don't agree with them on everything, but from a policy perspective, the California Public Utilities Commission has really done some very good things in terms of renewable portfolio standards, in terms of standards for appliances, and the smart meter initiative ---- which will eventually set the stage for some kind of time-of-use pricing, which eventually will save consumers money.
They've (the PUC) realized that there's a bunch of things that have to be done, and they've moved all of those things forward. From a policy perspective, they've been very thoughtful. I think eventually the smart meters are going to play a more significant role in conservation than people realize, in an analogous way that cell phones play a more important role in communication than people realized.
Call staff writer Eric Wolff at 760-740-5412.
