EPA and Utilities Are “On the Wrong Track,” Say Experts

Speaking to a sparsely filled room as the last of four presenters during the keynote plenary session at the Energy, Utility & Environment Conference in San Diego, Calif., Feb. 16, Len Hering, executive director of the California Center for Sustainable Energy (CSE), made it clear that he doesn’t think natural gas is the answer to the greenhouse gas (GHG) problem.

Hering was disappointed that a large number of conference attendees missed the opportunity to hear his talk, because they had left the previously packed hall following presentations by Environmental Protection Agency Assistant Administrator Janet McCabe and Ameren Corp. CEO Warner Baxter.

“I honestly believe they’re on the wrong track, clean and simple,” Hering said, suggesting that the transition needs to happen at “five times the pace that these folks are talking about.”

The crux of his presentation focused on the transportation sector, however. Hering noted that CSE—a San Diego-based nonprofit organization—administers clean vehicle rebate programs in California, Massachusetts, and Connecticut.

“You have to look at transportation,” Hering said. While coal-fired plants are large emitters of GHGs, he noted that transportation emissions account for up to 48% of GHGs in San Diego, and as much as 52% in Los Angeles, so addressing transportation emissions is just as important as reducing power sector emissions. But even so, Hering (Figure 1) was firm in his view that utilities need to make changes.

1. Len Hering speaks to attendees at the Energy, Utility & Environment Conference in San Diego, Calif.Source: POWER/Aaron Larson

“The truth is, distributed generation is the answer, and the chaos that’s needed is needed today,” Hering said. “If the energy companies don’t figure out how to get there from here, we’re going to figure it out on our own.”

And Hering isn’t the only one pointing out the trend toward distributed generation. “The utilities have had their world turned upside down as a result of the installation of rooftop solar systems by their customers,” said Greg Odegard, principal of GO Global Environmental.

Odegard pointed out that the two largest electricity suppliers in Arizona have started to fight back. Arizona Public Service proposed a $50 to $100 per month fixed fee for rooftop solar customers last year, but the Arizona Corporation Commission (ACC) only allowed a $5 fee to ultimately be levied.

Salt River Project (SRP)—the other big player in Arizona—is attempting to attack solar users from another angle. It proposed a change to the net metering credit, which would base the credit on wholesale rates rather than retail rates, and proposed a demand charge for use of the grid regardless of the electricity consumed.

SRP doesn’t need ACC approval because it is a government agency. It has a 10-member board that simply needs to approve the proposal for it to go into effect, and Odegard said they seem pretty happy with the measures, so it could just be a matter of time before it is implemented. The net result, according to Odegard, would be a $50 per month rate increase for each SRP rooftop solar owner.

Some utilities see distributed generation a bit differently. According to a utility survey cited by Odegard, 31% of respondents said they saw distributed energy resources, like rooftop solar, as their biggest growth opportunity over the next five years.

“There is a sense within the utility industry that things are definitely going to change,” Odegard said, but he suggested that many utilities still don’t seem to know what to do with that knowledge.

Aaron Larson, associate editor (@AaronL_Power, @POWERmagazine)