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Chile's Joint Citizen-Parliamentary Commission on Energy produces solid recommendations for reform, President Piñera should listen

2011-12-15T21:33:12Z

Noah Long, Energy Program Attorney, San Francisco

This year, President Piñera partially followed the advice from the OECD, NRDC and Chilean environmental groups to review Chile’s national energy policies and laws and develop a new energy strategy. When President Piñera was elected such a review was one of our key recommendations to improve the national energy sector, ensure opportunities for clean energy and avoid the worst polluting and environmentally damaging energy choices.

Unfortunately, President Piñera’s review process was held behind closed doors, rather than though a transparent and open process like we recommended. The results show the flaws in the process (my colleague Doug Sims will be blogging on this shortly).

Fortunately for Chile, the Chilean Congress and citizen groups refused to be shut out of this discussion and formed their own energy policy review commission. They recently released their report and delivered it to the President. The report includes key recommendations to improve the Chilean electricity sector and create long-term energy policy.

Here is a quick summary of their key reform recommendations:

Market Reform

Ensure regulators and grid-operators are independent from power-plant owners and improve transparency and civic engagement opportunities in the energy system.
Ensure a level playing field for renewable power generation to reduce barriers to new market entrants
Improve market incentives to close or retrofit old, inefficient and environmentally damaging power plants
Ensure adequate definition and regulation of biomass, including firewood.
Establish low income energy price assistance for low-income groups
Require the Ministry of Energy to produce a “Strategic National Energy Security Policy,” to coincide with OECD requirements for Chile’s entry to the International Energy Agency (IEA).

The Renewable Energy Standard

Increase Chile’s Renewable Energy requirement to 20% by 2020, and guarantee compliance of at least 20 GWhrs of renewable energy in 2020.
Require long term purchase requirements for renewable energy technologies, to eliminate barriers to entry.

Net Metering

Improve the net metering opportunity to include distributed renewable energy systems up to 300 kW in order to provide greater renewable opportunities to agricultural cooperatives, fishing associations, local businesses, health centers, hospitals and educational establishments. Reforming the current law for solar water heater subsidies (for low-income housing) to broaden the incentive to include residential electricity generation (net metering).

Energy Efficiency

Create a new Energy Efficiency (EE) Law that institutionalizes the goals, instruments and status of the Chilean Energy Efficiency Agency (ACHEE) and bring it back under governmental control. At minimum, the law should define the scope, included sectors, goals, the roles and responsibilities of the involved actors, requirements for energy-intensive companies and financial structure of the agency.
Establish energy consumption norms for energy-intensive companies based on international best practices.
Prohibit inefficient incandescent light bulbs in Chile through a minimum performance standard.
Decouple fixed cost recovery from sales for electricity distributors in Chile.
Implement the presidential commitments to the Heating Policy and the Refrigerator Exchange Program.

Internalize the environmental costs of fossil fuel power plants

Regulate heavy metal emissions from power plants including Mercury (Hg), Vanadium (V) and Nickel (Ni)
Address Environmental impacts of Power plant cooling
Tax fossil plants proportionately to their environmental impacts

President Piñera should work with the Congressional leaders and citizens that produced this report to develop a new national energy strategy.

California Energy Commission Renews its Commitment to Prevent New Long Term Investments in Dirty Power Plants

2011-12-15T21:20:01Z

Noah Long, Energy Program Attorney, San Francisco

This week, the California Energy Commission unanimously approved a petition by NRDC and the Sierra Club to commence a rulemaking to strengthen and clarify CEC regulations on SB 1368, California’s Emissions Performance Standard (EPS). The EPS, passed in 2006, precludes new long term investments in power plants that release more greenhouse gases than a combined-cycle natural gas power plant.

The petition discusses the magnitude of investments being considered by California Publicly Owned Utilities at coal plants that do not meet California’s emissions performance standard and requests 1) uniform mandatory reporting requirements for all investments under consideration and 2) clear criteria for evaluation of whether those investments are disallowed as new long-term financial commitments. The Staff supported our petition and the rule making committee will be led by Commissioners Peterman and Douglas.

The CEC has jurisdiction over California’s publicly owned utilities to enforce the EPS. The action today follows action at the CPUC last year to ensure full enforcement for the investor owned utilities.

The California Municipal Utility Association (CMUA) and MSR--the joint powers authority for Modesto, Santa Clara and Redding--opposed the petition and alternatively requested the Commission include a review of the role SB 1368 now that California has adopted a carbon cap-and-trade rule under AB 32. The Commission accepted this inclusion. SB 1368 ensures Californian utilities avoid the dirtiest power plants and continues to be a crucial backstop to prevent investments in highly polluting power plants and prevent gaming under the cap-and-trade rule. Including this item in the rulemaking should provide an excellent public forum to put a spotlight on the continued necessity of the EPS.

So, this holiday season I will be raising a glass to the CEC. While there is hard work ahead, opening a rulemaking on this issue takes courage, and they deserve our support for weighing in.

On another note, yesterday’s meeting started with a fond farewell for Commissioner Boyd who is retiring at the end of his second term and this was his last business meeting. Commissioner Boyd has been at the Commission for over ten years and in public service in California for decades. I’ll be raising a glass to him, as well.

Solar Power, the Economy and the Environment Win Again in California!

2011-11-14T16:35:56Z

Noah Long, Energy Program Attorney, San Francisco

On Thursday November 10, the California Public Utilities Commission (CPUC) announced its approval of PG&E’s contract with Abengoa’s Mojave Solar Project in the California Desert. The Project will provide significant environmental benefits by contributing 250 MW to the state’s ambitious 33% Renewable Portfolio Standard and will also help the State meet its greenhouse gas objectives under Assembly Bill 32.

The project uses solar thermal technology- which can have lower production variability and produce more power at peak-consumption hours than some other renewable technologies. CPUC President Peevey noted in his remarks that, “The Mojave Solar project is highly viable and the solar thermal facility will enhance the resource diversity of PG&E’s energy portfolio.”

In addition, the Mojave Solar project also represents the type of utility scale solar project that NRDC encourages developers to pursue and the CPUC to approve by virtue of being built on lands with low natural resource values. The Project conforms very well to solar project siting criteria developed several years ago by numerous environmental organizations, including NRDC. It’s located on private land with very low ecological values and is in the vicinity of existing road access and other developments. The California Energy Commission’s September 8, 2010 Decision approving the Project agrees, concluding that “overall, the proposed project area is composed of degraded habitat, which is of marginal suitability for special-status species and does not support a diverse assemblage of native plants and wildlife.”

The project has the support of conservation groups working in California. It demonstrates that large-scale solar energy projects can be planned in a way that protects plants, wildlife and other desert resources – in other words it’s a great example of a project that’s smart from the start. The Project achieves the balance between meeting our clean energy needs and protecting our sensitive desert ecosystems – two critical goals for California and for the country.

Well considered siting has commercial benefits, too, since it makes the permitting process more straightforward and certain. CPUC President Peevey and Commissioner Ferron highlighted the benefits to Californians that good project siting and planning provide, Commissioner Ferron noted, “With this project we have very high viability. The technology is tried and true, the financing is all wrapped up with the U.S. Department of Energy Loan Guarantee, and we’re told that the hard hats are on and the bulldozers are ready to roll. Therefore, we can have high confidence that this project will get built.”

So while we were not privy to the confidential contract details including the price, NRDC applauds the Commission for moving forward with a well planned solar project and look forward to its contribution to California’s climate goals and clean energy economy.

Good News for California Climate: A Ride Completed, a Bill Signed!

2011-10-10T20:01:25Z

Noah Long, Energy Program Attorney, San Francisco

Last week I took a few days away from the office to participate in Climate Ride California, along with several colleagues from NRDC’s San Francisco and LA offices (see Amanda and Adriano’s blogs).

It was a beautiful, often rainy, and heartwarming experience that bonded us and brought out our resolve to continue the struggle to protect our wonderful planet. There is nothing quite like riding 320 miles through the redwoods, hills and coast of California to remind you just how lucky we all are to be alive.

Upon my return, I received some excellent news!

This weekend Governor Brown signed NRDC sponsored legislation to improve enforcement of energy efficiency appliance standards in California. SB 454, authored by Senator Fran Pavley (D-Santa Monica), passed the legislature with bipartisan support. SB 454 will improve enforcement of California's energy efficiency standards for appliances such as air conditioners, televisions, refrigerators and light bulbs. The new law provides for an administrative enforcement structure at the California Energy Commission, with a clear pathway for civil enforcement by the state Attorney General when necessary. SB 454 helps level the playing field for businesses that are complying with energy efficiency standards by improving enforcement against those who try to skirt the requirements. The bill also ensures that expected energy savings are more fully realized; thereby saving money and reducing pollution.

I worked to support the bill with my colleague Victoria Rome- and it was great to see it all the way to the finish line!

And so California’s leadership in fighting climate change rides on!

Los Angeles Department of Water and Power misses the mark in energy efficiency

2011-08-11T00:28:01Z

Noah Long, Energy Program Attorney, San Francisco

In a recent report issued by NRDC, we found that no matter which way you look at it, the Los Angeles Department of Water and Power (LADWP) is falling short on delivering energy efficiency. Energy efficiency, by law, is the state’s top priority energy resource, meaning utilities are required to invest in reducing demand before paying for more energy generation. In Los Angeles--which has the largest publicly owned utility in the nation, those investments are falling short.

On nearly every measurement, LADWP has missed the mark when they have the tools to surpass them (each of the following graphs are found in our report). In 2010, LADWP energy efficiency savings were well below 1%. Sacramento’s public utility, the second largest public utility in the state, achieved more than twice the savings.

2010 Savings as a Percent of Sales

LADWP’s savings in 2010 were worse than their previous year, though most other public utilities in the state continued building upon energy efficiency savings.

Annual Growth in Reported Electricity Savings, by Utility

In a worrying sign of worse things to come, last year all of the publicly owned utilities were required to assess how much energy demand they could meet by improving energy efficiency over the next ten years. LADWP failed to release any assessment, but in the resource plan they released, they projected average energy savings over the 10-year period that amounts to 36% less than their 2007 target (the targets are set every three years) and averages 0.65% of sales. These targets are well below national best practice, and fall short of what several more active publicly owned utilities in the state are planning.

2010-2020 Average Annual Energy Saving Targets as a Percent of Projected Retail Electricity Sales

Indeed, The POU aggregate targets are 12% lower than previous targets set in 2007. However, when LADWP is excluded, the POUs in aggregate adopted a 3% increase in targets relative to their 2007 targets! The graph below shows the percent change in average 2010 annual targets from the 2007 targets. On average, the Mid-sized and Small utilities increased their targets.

Percent Change in 2010 Targets Relative to Targets Adopted in 2007

Part of the problem is that LADWP is under investing in energy efficiency. Compared to many of the better-performing public utilities, LADWP is investing a smaller percentage of revenue to achieve energy savings. Recent indications from LADWP management indicate that they intend to reduce those investments even further in years to come.

2010 Investments as a Percent of Revenue

LADWP should be a leader in energy efficiency--it’s the fastest, cheapest and cleanest energy resource available. More energy efficiency would help LADWP, and its customers, across the board: lower demand means fewer reliability concerns, less pollution, and fewer power plant upgrades. Reducing total demand makes compliance with the state’s 33% renewable mandate cheaper.

There are plenty of good examples around the state of utilities that are achieving far better results.

Here are three ways LA could save more energy:

1) LADWP must secure a significant multi-year energy efficiency budget. A real budget commitment would ensure sufficient investments and provide certainty that LADWP is serious about maintaining momentum on energy savings.

2) LADWP needs to open up its energy efficiency program planning. There are plenty of great experts (LADWP General Manager Ron Nichols used to work at a leading firm). LADWP should reach out and open its doors to new ideas.

3) LADWP needs a transparent and consistent approach to evaluation and measurement of efficiency program results. The sad truth is that the savings reported in the graphs above are based on LADWP estimates, without any transparent or independent evaluation. Transparent evaluation can vastly improve energy efficiency programs--improving savings opportunities and reducing costs.

LADWP is going to have to step it up if California is to remain the nation’s leader in energy efficiency.

California's Coasts Lose at the Expense of LADWP Politics

2011-07-20T23:25:06Z

Noah Long, Energy Program Attorney, San Francisco

Last week, I wrote that July 19th would be the next test of the California State Water Board’s resolve in finally enforcing the Clean Water Act to protect California Coastal Waters from a damaging practice called once through cooling (OTC).

The votes are in and, it turns out, the Water Board wasn’t willing to stand up to LADWP’s political pressure to protect California’s coastal waters.

The State Water Board gave LADWP an extra 10 to 15 years to comply with the OTC policy for its three power plants, Harbor, Haynes, and Scattergood (extensions from 2015, 2019 and 2020 to 2029), despite the fact that the Board’s own expert advisory committee on energy and reliability made it clear there was not enough information to justify pushing the deadlines back to accommodate LADWP.

Some of the Water Board members said they needed more information before amending the regulations, but a majority voted to amend them anyway, giving LADWP exactly what they lobbied heavily for.

Oddly, the board seems to have forgotten that as recently as last year, LADWP thanked the Board for accommodating LA by extending the schedule to 2020, saying in a comment letter that it would “make every effort to comply with the… date of 2020.”

The hearing was a something of a carnival. LADWP, the owner of the three plants, was given unlimited time, and took over an hour and a half to persuade the board why it needed more time to phase out once through cooling, while all other speakers were requested to limit comments to three minutes each.

LADWP showed pictures of wildfires, talked about earthquakes and brought out about every scare tactic you can imagine, claiming that without significantly more time to phase out OTC, California’s energy supply would be threatened. Of course regulators should worry about these sorts of dire predictions if they were actually rooted in fact, but LADWP had only assertions and no analysis to back up these worst-case claims and seemed to play only into fear of the “what if.” Unfortunately, it worked.

Ultimately Chair Hoppin picked the compliance date out of thin air. Hoppin brought LADWP General Manager Ron Nichols back to the microphone to get him to support a deadline 2029-- despite no analysis (except LADWP’s assertion that it needed until 2035) to suggest that any delay was necessary.

The Board had no estimate whatsoever of the increased impacts to coastal waters from the extension.

Ron Nichols has reason to be happy. He showed he had the right stuff: he has the political skills to roll the State Water Board--and that he knows a good environmental law when he sees one: it has a loop hole wide enough for LADWP.

Board Member Tam Dudoc , asked the other members to head the advice of the expert review committee to not extend deadlines and to require LADWP to provide additional information before taking any action, but she was outvoted.

Board member Fran Spivey-Weber voted with Hoppin – ignoring the analysis that it took the Board six years (a process which LADWP participated in) to form the existing schedule and claiming that ‘it doesn’t make a difference’ since any date was ‘arbitrary.’

In addition to extending the deadlines for these three plants, the Water Board made changes to the language of the policy that paves the way for other plant owners to seek extended delays in exchange for minimal mitigation fees and assurances. Unfortunately for all of us, it does make a difference. It now looks like it will be decades before California finally protects its coastal waters from this destructive technology, if it happens at all.

Is the State Water Board serious about protecting California coastal waters? Next week's vote will test their resolve, again.

2011-07-15T19:45:54Z

Noah Long, Energy Program Attorney, San Francisco

The story is getting all too familiar: Once again, the California State Water Board is considering amendments to its sensible policy to phase out once-through cooling – an outdated and destructive technology that sucks billions of gallons of sea water into coastal power plants to cool turbines.

Gerick Bergsma 2009/Marine Photobank.

The water is heated significantly and then is spewed back out into the ocean, bays, and estuaries. This process kills larger fish, sea turtles, and marine mammals as they get trapped screens, and kills small fish and other marine life as they get sucked in and cycled through the plant. It also hurts the marine ecosystem by discharging hot water back into the ocean, bays, and estuaries.

2007 (c) Octavio Aburto/Marine Photobank."

Phasing out once-through cooling will likely mean either shutting down (mostly old and inefficient) fossil fuel plants that use the technology, or retooling their cooling systems to use currently available technology (closed cycle wet cooling) that uses less than a tenth the amount of water and therefore has a less harmful impact to the ocean’s ecosystem. Dry cooling systems, already required for new power plants in California, would use no ocean water.

Let’s take a look at this quick timeline of the battle-worn policy:

1972: The Federal Clean Water Act is passed, requiring that water used for cooling power plants use the best technology available to minimize adverse impact on marine life.
2005: The Water Board starts deliberations in earnest on the once-through cooling policy.
2006: The first draft policy is released. Adoption of the policy is put on hold until state-funded technical feasibility and electrical grid reliability reports can be completed.
2008: An amended draft policy is released.
2009: Another amended draft policy is circulated. With the support of California state energy agencies, this moderate, compromise policy includes a timeline to phase out the destructive practice at the state’s 17 coastal fossil fuel plants over 10 years and creates an inter-agency group to advice the Water Board on any necessary changes to the policy to ensure the state will keep the lights on. The plan addresses the two nuclear plants separately, and gives them somewhat more time to comply.
2009-2010: The policy was almost destroyed before it was completed -- substantial amendments proposed in the months before the plan was finalized would have seriously undermined its implementation. But when the votes came in last May, the board did the right thing, and adopts a more complete version of the policy, with fewer loopholes.
Late Summer 2010: After the policy is voted on, but before it was finalized, it had to survive an–end-of-session legislative attack that would have gutted it.
Fall 2010: After five years of back and forth, the policy was finalized – 40 years after the passage of the Clean Water Act required it.
Fall 2010: Only days after the policy finally became law, the Water Board staff proposed another set of amendments to gut the policy.
December 2010: The Water Board again kept their cool and voted down the amendments, choosing instead to let the policy work.
April 1, 2011: Owners of power plants using once-through-cooling submitted their implementation plans. The plans vary widely in completeness and reason. The Los Angeles Department of Water and Power’s (LADWP) plan requests a delay until 2035 to fully implement the policy, without substantially analyzing any faster implementation timeline or scenario.
May 2011: Without any public analysis of reliability concerns, the Water Board staff released draft amendments to the Policy that provide LADWP’s requested delays, with almost no new analysis of impacts of the substantial- and opening the door for other power plant owners to ask for further delay.
July 5, 2011: the interagency group put in place by the Water Board to analyze grid reliability concerns votes on a motion recommending the Water Board take no action until it collects more information from LADWP, noting there is not sufficient information to justify extending the deadlines for compliance.

And now we are at another critical turning point: once again the Water Board is considering amendments to the policy that once again threaten the core of the Policy.

On Tuesday, July 19th, the Water Board will decide whether it will meaningfully implement its policy or cow to political pressure and allow multi-decade delays before the Policy has a chance to work. The test is another crucial one: if the policy works as it is intended to, the Board will have to tow a hard line for at least ten years, showing that it can tell the difference between empty political pressure and serious concerns about the reliability of the electric grid- concerns that may require some reconsideration of the existing timeline.

You can help!

Attend the State Water Board meeting on Tuesday, July 19th to show your opposition to deadline extensions, and your support for protecting the ocean.
Contact the Los Angeles City Council members and ask them to oppose the deadline extensions for LADWP’s power plants.

The Facts about Light Bulbs and Mercury

2011-07-11T20:58:21Z

Noah Long, Energy Program Attorney, San Francisco

Compact fluorescent lights (CFLs) use about a quarter of the electricity of traditional incandescent light bulbs, reducing energy costs for consumers. By conserving electricity, CFLs also avoid some of the mercury emissions from power plants that burn coal. Burning coal is a far larger source of mercury in our environment and a far bigger risk to our health. In fact, we’ve calculated that using a CFL results in less than half of the mercury emissions of using a 100 W incandescent light bulb.

However, CFLs themselves contain a small amount of mercury, which has led to some questions about whether they are safe to use. We’ve taken a close look at this issue, and we believe that CFLs are the right choice for those concerned about both their health and their energy bills.

The amount of mercury contained in a CFL is very small — a typical bulb today contains about 3mg. To put that amount in perspective, there is up to five times that amount of mercury in the watch battery on your wrist; quite notably, between 60 to 200 times that amount of mercury in a single “silver” dental filling in people’s mouths, depending on the size of the filling; 100 to 200 times that amount in the old-style thermometers many people still have in their medicine cabinets; 200 times that amount per switch in the light switches of certain freezers; and about 500 times that amount in thermostats on the walls of people’s homes. (These are conservative estimates based on comparison to a bulb with 5 mg of mercury.) CFLs also use the same technology as the linear fluorescent tubes we have been using in our schools, offices and hospitals for over 50 years. Those tubes can contain up to 100 mg of mercury each.

Still, you may be concerned that a delicate glass bulb is different from the watch on your wrist: if a CFL breaks, some of the mercury inside can escape into your home. Some news reports have raised concerns that broken CFLs could result in harmful air concentrations of mercury in the room where the bulb is broken, but these reports are based on worst-case situations, assuming common sense measures (such as ventilating the room) are ignored. If a bulb does break in your home, don’t panic. The small amount emitted is unlikely to be harmful, and you can use simple cleanup procedures to further minimize any exposures. Keep kids away from the breakage, open a window and carefully clean up the pieces and place them in a ziplock bag for proper disposal.

While it is sensible to handle broken CFLs with care, by far the most important step people can take to reduce mercury exposure in their daily lives is to avoid eating fish contaminated with mercury. Eating fish is the main source of mercury exposure for Americans, and the form of mercury found in fish is more toxic than the form used in CFLs (or other household products). While fish is part of a healthy diet, people should take care to choose the types of fish which contain the least amount of mercury, particularly if they are pregnant or nursing. NRDC’s website contains recommendations for choosing fish that contain the least amount of mercury. Visit http://www.nrdc.org/mercury for a printable shopping guide to safe fish.

On Obama's trip to Chile, he should bring "la buena energía"

2011-03-12T00:32:49Z

Noah Long, Energy Program Attorney, San Francisco

President Obama has a scheduled trip to Chile later this month. And in the agenda, clean energy should be a top priority. Chile is a small country, another world away, but it is on the precipice of an energy policy disaster and its success—or failure—in confronting its energy challenges will likely set a course for South America.

Chile’s energy sector reminds me of some of the opening lines of Robert Frost’s “The Road Not Taken.” “Two roads diverged in a yellow wood…long I stood. And looked down one as far as I could. Then took the other… having perhaps the better claim, Because it was grassy and wanted wear.” The reader will forgive my edits to the poem, I hope.

Unfortunately, Chile looks poised to take the more commonly tread route, to a costly and polluted future.

When I first visited Chile nearly six years ago, the government was starting to take clean energy seriously- they were reeling from an energy crisis caused by overinvestment in insecure and damaging energy resources: in the 1990s the government approved a series of highly controversial hydro-electric projects, and then made a big bet on natural gas generation by building pipelines to bring gas from Argentina. After huge investments hydro and gas, Chile has spent much of the last decade struggling through droughts and gas line cut offs by the Argentines.

As a result, Chile’s energy prices have yo-yoed and pollution problems worsened as gas plants had to convert to run on exorbitantly expensive and dangerously dirty diesel fuel. At first, policy makers seemed to take energy efficiency seriously- creating an energy efficiency agency, starting an energy consumption labeling program and subsidizing efficient lighting. They even seemed interested in renewable energy- setting a renewable energy standard, which, though small, was and remains the first of its kind in Latin America. This makes eminent sense as Chile has some of the best solar resources in the world and high potential for geothermal and onshore wind. Some of these resources are commercially viable now, without subsidies, and could be quickly brought on line to diversify supply and keep down energy costs.

When President Piñera came into office in 2010 many signs seemed pointed at continuing clean energy efforts, but so far the Piñera administration has failed to deliver:

The new government promised a new renewable energy target of 20% by 2020, but has yet to get it finalized, let alone produce a legislative proposal.
Is energy efficiency falling off the map? When I first arrived in Chile the energy efficiency agency was buzzing with bright young professionals researching opportunities and eager to bring real gains, but the after 6 years the agency still hasn’t published a single energy efficiency standard.
Missed opportunities: After the terrible earthquake of 2010, Chile should have focused on building homes and businesses that saved Chileans from the high costs of energy, but there are few signs that the government took this on.
The dirty road…taken: just last week the government approved a HUGE new coal plant, Castilla, that if built would be over 13% of Chile’s total electric generation capacity. Building this coal plant would be a colossal mistake- the same mistake Chile (and the rest of the world) has made far too many times before- based on the same lie: In the long run, fossil fuels are not cheap or reliable.
Piñera’s administration is increasingly exploring the “nuclear option.” Talk of nuclear power- the most expensive and risky energy ever conceived of- should seem laughable in a small country with no nuclear regulatory infrastructure whatsoever, where free-market economics has such prominence. Except that apparently the government isn’t in on the joke.
More choices ahead: Within the year Chile will have to decide on a series of coal and hydro-electric projects including the “dams to nowhere” proposal to damn rivers in Patagonia- over 1300 miles from the electric central electric grid!

Fortunately, Chile can choose a far cleaner, greener path--and this is why Obama’s trip is so important. There are small signs and bigger signs that the governments is still thinking about better energy policy. It should redouble its efforts: Chile can tap efficiency resources in the mining, industrial, commercial and residential sectors and work to cut demand growth, instead of forever relying on the next big, expensive energy project. It can balance its energy portfolio by relying on its own national renewable resources, which happen to be among the best in the world.

Taking the path to a clean energy future will require bold leadership of the sort Piñera and Obama both promised. Since taking office the two leaders have shown mutual interest in global cooperation on clean energy. Now is the time to deliver. Next year leaders from around the world will meet at the “Rio + 20” Earth Summit: Obama and Piñera should be the first to commit to a hemispheric clean energy plan that maximizes energy efficiency, sets and enforceable targets for renewable energy and ends investment in dirty energy projects.

A Brighter View of CFLs

2011-01-21T23:36:00Z

Noah Long, Energy Program Attorney, San Francisco

This week The Wall Street Journal published an unfortunate piece on the successful energy efficiency programs in California. The piece, The New Light Bulbs Lose a Little Shine (Jan. 19), focused on the ongoing controversy over exactly how much energy the California programs have saved, particularly with regard to the cost-effective compact fluorescent light (CFL) programs. While there is a controversy there, and both my colleague Peter Miller and I have both blogged about it, what the article omitted was that the disagreement is only over whether the programs were hugely successful or just successful. In either case, the California efficiency programs provided enormous benefits to customers and saved Californians at least hundreds of millions of dollars. The California Public Utilities Commission ruled that the programs provided customers with $3 billion in net benefits (that is, the benefits after subtracting the costs). Even the most conservative estimate of savings showed about $350 million in net savings for customers. The CPUC ultimately authorized $212 million in earnings for 2006-08 as a reward for the energy savings programs. To put this in context, these profits comprise less than 2 percent of the utilities’ total profits during those three years, and if the utilities had not invested in efficiency programs and had procured more costly and polluting power instead, they would have earned, under PUC rules, roughly $700 million on those investments. So this is a great deal all around for customers. While the incentive mechanism isn’t perfect it is helping keep California on track as one of the most energy efficient states in the union.

In addition, the article played into a number of “hot issues” that are hardly issues at all. For example, the article noted that CFLs are mostly made in China. True, but the vast majority of jobs from energy efficiency investments are created here at home. In fact, most come from consumers reinvesting their utility bill savings into the local economy. Since the CFL programs are among the most cost-effective that exist, and they yield enormous bill savings for consumers, the local job benefits are similarly large. A recent study concluded that California’s efficiency policies have created 1.5 million jobs with a total payroll of $45 billion. Furthermore, there is good news that manufacturers of the new generation of energy efficient light bulbs are locating their production in the US.

The article noted that there has been disagreement over when people install CFLs, and whether they last five or ten years. But it missed the point that whenever they are installed, they will save huge sums of money. For example, if they last only five years, they save about $25 per bulb, rather than $50. While I would rather save $50 than $25, for a bulb that costs a buck or two, it’s a pretty good deal either way.

Lastly, the article mischaracterizes the new incentive mechanism that the CPUC is currently considering. While the policy is not final yet, it emphatically will judge utilities based on the amount of energy actually saved by their efforts. The difference is that the CPUC will develop savings estimates for each energy-saving product or project only once, rather than second guessing key assumptions years after the program ends. The CPUC plans to continue to conduct robust evaluation and measurement of energy savings. The approach is more in line with the approach that’s used in other leading states around the country.

Environmentalists and consumer advocates should work even more closely together to maximize the savings the nation can achieve through energy efficiency. These programs are by far the best investments utilities can make, and we should ensure they are maximizing all cost-effective energy savings before investing in costlier and dirtier alternatives like building new power plans.

Good News: The CA Water Board holds its ground on Once-through Cooling

2010-12-15T20:20:14Z

Noah Long, Energy Program Attorney, San Francisco

As my colleague Leila Monroe and I recently wrote , the CA state Water Board has been under intense political pressure to gut its Policy on once-through cooling, only months after its adoption. The Water Board’s Policy sets a timeline for phasing out the use of once-through cooling at coastal power plants: an environmentally destructive and antiquated technology.

In a show of integrity, three board members (Tam Dudoc, Fran Spivey-Weber and Art Bagget) voted to reject the proposed amendments. Instead, the Water Board will follow the process in the Policy to review the timeline and any other necessary changes with the advice of state energy agencies, after close review of proposed implementation plans from power plant operators.

With the vote, the Board agreed to address Los Angeles Department of Water and Power’s implementation plan first and hopefully by July 2011, rather than addressing all plans together in October, as originally planned. Political pressure from LADWP and other power plant owners will no doubt continue at the Water Board and in the legislature this year. As the process unfolds, it will be crucial for the Water Board and the state energy agencies to maintain the integrity demonstrated yesterday.

California's Water Board Shouldn't Gut the Once-Through Cooling Policy Before it Has a Chance to Work

2010-12-09T21:02:48Z

Noah Long, Energy Program Attorney, San Francisco

The California State Water Board is considering a major and poorly analyzed Amendment that will dramatically weaken the Board’s recently adopted Policy to phase-out the harmful and antiquated technology of once-through cooling in coastal power plants in California. As my colleague Leila Monroe blogged, this post-World War II technology, uses sea water to cool power plants. Once-through cooling has tremendous harmful impacts on California’s coastal and marine environment. Every day, 19 power plants on our coast suck in more than 15 billion gallons of sea water, killing nearly all the marine life that water contains.

The Policy, adopted in May 2010 after five years of review, would start to bring California coastal power plants into compliance with the Clean Water Act (40 years after its passage), by setting a moderate timeline for phasing out once-through cooling over the next 14 years (or requiring comparable reductions in ocean impacts).

The Policy was developed in close consultation with the state energy agencies, and in their September, 2009 comment letter those agencies showed support for the approach ultimately adopted by the Water Board. In order to ensure the phase out won’t have unintended consequences on the state energy supply, the State Board’s Policy also established a process for accepting ongoing advice from state energy agencies, in case any further delays or changes are found to be necessary.

Only weeks after the ink was dry on the finalized Policy, the State Water Board has now proposed an Amendment that would gut the new Policy and allow power plant owners to set their own timeline for compliance. In the meantime, power plant owners could comply through payment of a mitigation fee that courts have already determined to be illegal.

Why? There is no new information to suggest that the new Policy won’t work. In fact, the Los Angeles Department of Water and Power (LADWP), one owner of coastal power plants, released a draft energy resource plan this past summer, noting the numerous reasons for needing to retire or replace several of the existing outdated coastal generators, including reliability, air quality and increasing maintenance costs. Compliance with the Policy is possible without retirement or replacement of the coastal plants, but amending the Policy to “save” power plants that need to be replaced anyhow doesn’t make much sense.

Under the Policy (which has not even been given opportunity to be implemented), plant owners are required to submit implementation plans early next year. Without having seen the implementation plans, the Water Board has no reason to think California energy supply – including the ramp-up of renewable energy -- will be at risk, or that power plant operators have any legitimate reason for needing more time to comply with the Policy.

Furthermore, the U.S. Environmental Protection Agency, which after many years of delay is finally developing a rule to address once-through cooling, has recommended the Water Board reject the proposed amendments. The amendment was not accompanied by any additional environmental review or any review of electricity supply constraints. Indeed, no meaningful rationale was provided whatsoever.

The State Water Board should reject the proposed Amendment, and give the new Policy an opportunity to work, rather than undermine the Policy and forgo responsibility to protect California oceans. After five years of study by the State Water Board, we know California has a workable Policy to phase out once-through cooling. California’s coastal ecosystem will be better off and we can still meet our energy needs.

On November 19, NRDC joined 21 other groups in submitting a very detailed letter, which describes the many legal, policy and scientific reasons the once-through cooling Policy Amendment should be rejected at the State Water Board’s hearing on December 14th, 2010. The meeting is open to the public: come tell the Water Board to reject the Amendment.

A light on the horizon in Mexico

2010-11-22T22:39:41Z

Noah Long, Energy Program Attorney, San Francisco

As Mexico prepares to host the next round of climate negotiations, attention has turned to national and local commitments to reduce climate-disrupting pollution. Mexico set a bright example this fall by proposing new energy efficiency standards for light bulbs. These standards will cover both today’s everyday screw-based light bulbs and the linear fluorescent or tube lamps. Once enacted, the proposed rule will place Mexico in a growing group of nations that are raising the bar for lighting efficiency, including the United States, Canada, Australia, the European Union and others.

Lighting energy efficiency standards save people billions of dollars, reduce the need for costly power plants and prevent millions of tons of air pollution emissions, including carbon dioxide, the main heat trapping pollutant responsible for climate change. Mexico’s proposed standard, like most other standards across the world would be phased in over a number of years though the money-saving products already exist to fit all lighting applications.

NRDC’s work on lighting efficiency standards, including in Mexico, is focused on two major objectives.

Every standard for screw-based lamps should achieve the 70+ percent savings available from current lighting technology. Mexico’s proposed standard meets this goal and establishes Mexico as a world leader in lighting efficiency.
Standards have to be carefully drafted to avoid loopholes and include quality control requirements. We need to make sure the new energy efficient light bulbs not only save energy but also perform well and last as long as advertised.

Mexico should work to quickly adopt a full and effective lighting efficiency standard. When it does, it will be a model for lighting efficiency in Latin America, and will be a big step towards confronting a global climate disaster.

California Gets Closer to Closing the Door on Coal

2010-10-18T18:25:12Z

Noah Long, Energy Program Attorney, San Francisco

Last week, the California Public Utilities Commission signaled it is ready to close the door on dirty coal investments. The only remaining coal plant owned by an investor owned utility in California is Four Corners, located in northwestern New Mexico and CPUC has indicated that Californians won't have to pay for coal-generated power much longer.

In 2006, California passed SB 1368, the Emissions Performance Standard. The precedent setting law prohibits new ownership investment in base-load power plants that fail to meet minimum performance standard for carbon emissions, which effectively prohibits investment in coal burning plants. The standard allows no more carbon pollution than would be generated by a combined-cycle natural gas plant (though some recent natural gas plants appear to have lower emissions). Since coal plants all have significantly higher carbon emissions than combined cycle gas plants, the law effectively eliminates new investments in coal generation facilities, unless the owners installed carbon capture and sequestration.

The law has been an outstanding success in California’s ongoing leadership in fighting a global climate disaster by preventing any new investment in dirty coal plants (all coal is dirty) by California utilities.

Still--the law did not immediately bring all of the coal plants owned by California utilities to a halt. It prevented only new ownership investment, allowing CA utilities time to phase out their coal use. California passed the Climate Solutions Act (AB 32) the same year, which set a cap on total statewide emissions and set in motion the rules to start emissions reductions from all sources, including CA owned coal plants.

Southern California Edison owns 48% of two of the generating units at Four Corners. Edison requested the CPUC allow continued investment at Four Corners, claiming they were obligated by contract to maintain the plant. NRDC objected to this request, noting that while only new ownership investment is prevented by SB 1368, the CPUC needed to scrutinize investments at Four Corners to ensure that they were necessary for current operation and safety, and not merely intended to extend the life of the plant.

This summer, NRDC worked with Edison to come up with a shared framework for evaluating investments at Four Corners after passage of SB 1368. We submitted joint comments to the CPUC and last week’s decision mirrored most of our recommendations.

The decision includes a few key components that signal the waning days of dirty coal in California:

Life extending investments requested by Edison will be evaluated to ensure they are necessary for safety, environmental compliance or operation of the plant within the remaining period of contractual obligation (through 2016);
Investments will not be allowed above the pre-requested amount, unless catastrophic or unforeseeable circumstances require;
Edison is required to analyze whether California customers would be better off if Edison sold the plant by 2012.
No investments will be allowed at Four Corners after 2012.

The decision doesn’t shut-down Four Corners tomorrow, but it makes clear that California is serious about ending the dirty coal era state-wide and also serves as a model for other states to do the same.

NRDC to CPUC: Take a Hard Look at the Numbers

2010-05-26T19:38:39Z

Noah Long, Energy Program Attorney, San Francisco

On April 15th, the California Public Utilities Commission’s Energy Division staff released a draft report estimating the energy savings of the California investor-owned utilities 2006-2008 energy efficiency programs. When the programs were approved, they were by far the largest utility investment in energy efficiency ever. The efficiency programs are designed to save consumers money and reduce environmental impacts of energy use through the use of energy efficient products. When the 2006-08 efficiency programs were completed, they had helped Californians purchase, install and use even more energy efficient lighting, appliances, and equipment than was expected when the programs were approved in 2005. Energy division staff reports that verified savings under program planning savings assumption levels were 110% of what was expected!

Given this seeming success, there are significant questions about the April 15th draft staff report, which indicates that the California utilities missed the savings goals the programs were designed and approved to achieve. The discrepancy is the result of evaluation studies completed by various consultants who estimated that nearly every efficiency program saved less energy than was expected. Ducts were sealed, air conditioners and appliances were installed, and light bulbs were replaced for more efficient models, but according to the evaluations, when the savings were counted they didn’t add up to what was expected. (Although, as my colleague Devra Wang notes in her blog, even the most conservative estimates show the efficiency programs still provided enormous benefits for utility customers, the state’s economy and the environment.)

Some variation in savings should be expected: For instance everyone knows that a CFL produces light using 75-80% less energy than an incandescent, but it’s harder to know how many hours the efficient bulb will be used, or how quickly after purchase it will be installed. My colleague Peter Miller discusses the Energy Division’s Upstream Lighting Program evaluation report in his blog post. But the changes in estimated savings aren’t minor tweaks. The estimates indicate very significant reductions in savings in a wide range of efficiency programs, which begs the question: Are these new estimates reasonable? How much energy was really saved?

NRDC’s review of the savings studies indicates that some new estimates are based on reasonable methods and rigorous analysis. These reports indicate that some programs could be improved in future years to bring substantially more savings. For example, a report on a program that incentivized duct sealing may bring more savings if contractors are paid based on saved energy, instead of by the job, thereby incentivizing thorough and complete work. But other reports appear to vary widely in methodology, timing, sample size and even, according to the conclusions of the evaluators themselves, success at estimating savings and attribution of the efficiency programs. Of particular concern are a number of the estimates of savings attribution (the estimate of what portion of the efficiency upgrades incentivized by the utilities would have happened without utility support). Attribution is a very hard thing to measure after a program is completed, and many of the studies don’t appear to have come up with estimates with any substantial degree of confidence, yet many of the most significant reductions in savings estimates come from new attribution assumptions.

The evaluation reports represented a significant venture. The approved 2006-2008 Energy Division savings evaluation budget was almost $120 million. But the full Commission has not yet reviewed the savings studies, instead leaving this important function essentially in the hands of consultants with staff review and only informal party comments. The wide variety of levels of certainty in the evaluation reports, combined with the impact of their results on savings estimates from past, current and future efficiency programs merits consideration by the full Commission.

These estimates matter. Hanging in the balance are an upcoming decision by the Commission on financial rewards or penalties for the utilities’ performance at delivering energy efficiency programs; the savings that can be expected from the current 2010-2012 and future programs; and the savings from efficiency programs around the country, since many states look to California’s evaluation studies to determine savings from their own programs. Where the draft report provides good, new and useful information, it should be used to adjust the current programs being deployed by the utilities. Whatever assessment information is not based on enough data or sound analysis, it shouldn’t encumber future efficiency investment opportunities in California.

Before the Commission approves the draft report, it should dig in to the detailed evaluations, decide what level of certainty it requires before changing savings estimates, and ensure it has confidence in the final saving estimates.