We have written before about how electric utility companies try to get ratepayers rather than stockholders to pay for repairs to their equipment.
In particular, we wrote previously how SDG&E appealed to the California Public Utility Commission (CPUC) for a rate increase after the disastrous Witch Creek fire:
“It’s standard operating procedure for San Diego based SEMPRA Energy, parent corporation of San Diego Gas and Electric, to delay costly maintenance and then, when there is a breakdown in the system such as the 2007 Witch Creek Fire which burned 198,000 acres, killed two people, injured 40 firefighters and destroyed more than 1,100 homes, to go to the California Public Utilities Commission (CPUC) and get a ruling that would allow them to charge the ratepayers for costs associated with that disaster.”
Now Southern California Edison (SCE) and SDG&E, majority and minority owners, respectively, are using the same playbook with regard to the repairs undertaken at the San Onofre Nuclear Generating Station (SONGS).
Almost exactly a year ago the plant was shut down because of a radiation leak. Now after extensive repairs SCE and SDG&E want to reopen one of SONG’s reactors at 70% of full strength, and they want the ratepayers to pay for the testing and repairs that took place in 2012 even though no power whatsoever was put on the grid in 2012.
But this is nothing new. This is standard operating procedure for electric utilities all over the country. Case in point: Jersey Central Power and Light (JCP&L) after the Superstorm Sandy debacle.
The steam generators at SONGS were replaced in 2010 at a cost approaching a billion dollars for which the ratepayers have been paying. Those steam generators were supposed to last 20 years. Instead they lasted just two. The question is should ratepayers get a refund for paying for power they did not receive.
In addition what about the billion dollars that was paid by ratepayers to replace the steam generators in 2010 which only lasted two years. Should ratepayers get reimbursed for that? Also should ratepayers pay another billion dollars to fix SONGS again or should it be relegated to the dustbin of history?
John Geesman, former member of the California Energy Commission and now an attorney with the watchdog group Alliance for the Nuclear Responsibility says that, until the California Public Utilities Commission (CPUC) decides otherwise, ratepayers will still be on the hook for San Onofre – about $10 a month per household.
“The real key from my perspective is whether the senior management at Edison, once they realize they’re playing with shareholder dollars rather than just something they pass through to ratepayers, will make faster decisions on San Onofre,” Geesman said. The question is whether San Onofre is cost effective at all at this stage or whether ratepayers should be footing the bill for a nuclear generating plant that is not even operating at full capacity.
But even cost considerations take second place to the issue of whether SONGS is safe at all and should even be operating so close to so many households in an earthquake prone area. Remember Fukushima? Many local citizens like San Clemente Green chairman Gary Headrick are adamant that San Onofre should not be reopened. Reopening the plant could endanger 8 million people living nearby in Carlsbad, San Clemente and even San Diego.
Critics also say that San Onofre is not needed since we got through the summer of 2012, one of the hottest ever, without a power outage. At a meeting held to air local concerns, a local resident said, “We demand a full, transparent adjudicatory hearing and license amendment process, including an evidentiary hearing and sworn testimony and cross-examination. We cannot be [an] experiment waiting for more radiation leaks.” Such a hearing would allow outside experts to testify.
It seems that SCE and SDG&E knew for some time that there were problems at San Onofre, but did little about them. Repair work that should have been undertaken to address vibration that led tubes to rub against each other and against support structures inside the generators was never undertaken. And this is typical for electric utilities that go by the philosophy that repair work is costly and detracts from the bottom line.
Wall Street does not approve. That’s why many utility companies are laying off workers whose job it is to replace aging equipment. In fact in August 2012 SCE announced plans to lay off more than 700 workers. Their attitude is ‘let it break down; then we’ll ask the PUC for a rate increase to make repairs.’ This way it comes out of the ratepayers’ hide and not the shareholders’. This maximizes stock prices and consequently CEO pay.
Only this time we’re not just talking about utility poles that should have been replaced snapping and cutting power lines; we’re talking about nuclear radiation that could make the homes of 8 million people uninhabitable at the very least.
In “The Fine Print,” David Cay Johnston writes:
“The problem … with poorly maintained equipment is widespread. America is using up its infrastructure instead of rebuilding it. We grow slowly poorer as roads crumble, dams weaken on their way to deadly collapses, and the electric utilities siphon off funds customers pay for reliable power.
“One indicator of this? From 1983 to 2010, the number of Americans rose 36 percent, but the number of utility workers fell 15 percent. As the electric grid and the pipes carrying water and natural gas under high pressure age, more workers are needed for maintenance, repair and replacement, not fewer.”
As of January 31, 2013, California’s Attorney General, Kamela Harris, is getting involved concerning whether ratepayers should pay the billions in repairs both in 2010 and 2012. She is joining the CPUC investigation that could either cost or save ratepayers a lot of money. Should the public get reimbursed for the large expenditures which seemingly have done little good?
SCE wants the CPUC to wait until 2015 to make a decision. Why does SCE want the PUC to wait? Obviously, so they have even more time and chances to lobby the CPUC to make ratepayers not shareholders pay the costs of their blunders and so they can plan more travel junkets to Hawaii. Of course ratepayers would like to have their bills lowered now and to be reimbursed for energy they paid for but did not get.
It is well known that SCE has lobbied the CPUC for years. In fact they have paid for travel junkets for CPUC commissioners. I wrote previously that “… politicians who support the utility corporations’ agenda get their share of free travel as well. Each year more than a dozen California state lawmakers enjoy a free trip to Hawaii. In 2011 they checked into the luxurious Fairmont Kea Lani hotel in Maui. California law prohibits state lawmakers from taking more than $400 a year in gifts.
But, as ever, there’s a loophole. The $13,000. trip to Maui for lawmakers was paid for by a nonprofit corporation, the Independent Voter Project (huh?), which is a front group for [PG&E and Southern California Edison.]”
The San Onofre nuclear power plant has been offline for a year, due to faulty steam generators, but ratepayers are still paying more than $50 million a month for the non existent power.
The CPUC is considering whether ratepayers should be reimbursed and whether they should be reimbursed for the billion dollars in repairs they did a couple years ago or only for recent repairs. SCE has lobbied this one to death and it looks like the CPUC will only favor ratepayer reimbursement on a more limited basis.
Don Kelly of the Utility Consumers Action Network (UCAN) said in an interview on KPBS, “We need to decide whether we should spend another billion dollars repairing a plant that was repaired a couple of years ago for a billion dollars.” And don’t forget the billion dollars that was spent running the plant in 2012 that produced no electricity!
The CPUC is currently investigating whether ratepayers should be on the hook for those costs and if they should get a retroactive refund for the time the plant has been offline. The CPUC has scheduled two hearings on Feb. 21 in Costa Mesa to get public comment about ratepayer issues.
But the question should be asked: why doesn’t Carlsbad, San Clemente and San Diego form a municipal utility district instead of relying on corporate owned utilities to generate their power? Why is the head of Southern California Edison paid more than $3.5 million a year while the general managers of the municipally owned LA Department of Water and Power and the Sacramento Municipal Utility District each earn around $350,000. These municipally owned utilities have for years provided reliable power at lower costs then corporate owned utilities.
John Lawrence
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More of us need to reduce our dependancy on the grid. Or generate more energy locally than we use from the grid.
Admittedly the grid is a great way to store our home made energy for those short periods of time when our demands for energy are high.
All in all with careful planing, we can generate more energy than we need…
And here the laws are stacked against us. We can only get credit for the energy we generate and put on the grid.. to the limit of what we use from the grid..
We will not be given credit for the excess energy we add to the grid.
SDGE gets that for free from us!
In fact, I believe there are laws and SDGE requirements that refuse approval of our home based energy generation.. if it has the capacity to generate more than we use.
Who writes these laws? as if we didn’t know… Corporations Rule! Bah!
This is in contrast with Germany that has feed in tariffs that repay citizens at a high rate for electricity they generate and provides the greatest incentive for a country to go solar. Solar farms in Germany have made lots of money for every bit of energy they have put on the grid without limit. The corporate utilities here will not allow that. In fact they lobby against it.
John Lawrence, your tough, thoughtful and articulate arguments reveal that total corporate control of the economy will mean something a lot more brutal and repressive than American national government could have imagined and deployed if it were in charge. Anyone who’s been dealing the last few years with insurers, utilities, hospitals, phone networks and other of the “providers of necessities” — in other words, all of us–knows the truth of what you’re saying here. We could all wish we could say it as clearly.
PUC rules requires utilities to employ the most cost effective alternatives available. In light of SONGS heavy expenses the CPUC should be asked to evaluate the alternatives.
socialized green energy at half the cost..
Santa Clara, CA
As the article indicates, municipally owned utility districts like Santa Clara are known for providing reliable power at a low cost. This is what the citizens of Carlsbad, Oceanside and San Clemente should investigate and get rid of SDG&E and Southern California Edison altogether.
John- what are the basic steps required for San Diego to own their municipal utility district like Santa Clara? The Green Bay Packers are a fan-owned sports team. Santa Clara owns their own utility district. There needs to be some kind of public benefit from the infusion of public dollars.
Anna, as the article indicates, LA and Sacramento have municipal utility districts as well as a number of other cities and towns. As far as the exact steps to accomplish this I don’t know, but I imagine that it would start by putting it on the ballot so the people could decide if this is something they would want to do. From there the local authorities would take over to implement it. They have a number of models to choose from among other municipalities that have accomplished this.
This is something that should be investigated with regard to the desalination plant in Carlsbad that is being built currently by privately owned Poseidon. I feel this should be a municipal project as well instead of being privately owned.
In MA there is a law that prevents cities and town that are served by a regional investor-owned electric utility from breaking free from the regional utility and setting up their own municipal utility without the “permission” of the regional utility, which of course is never granted. There are at least 1/2-dozen cities and towns that would break away, but for this law. Legislation to overturn this law is presently stalled in the MA legislature, headed for defeat. The 2 major regional utilities have spent ~$1/2 million over the past year lobbying the MA legislature to defeat this bill. It looks like they big guys are winning again. It’s truly depressing!
So, Anna, perhaps the place to start is with your state rep to see if there are any legislative barriers, or if your rep is reluctant to help (if so, you might ask why), try to identify a rep who agrees with you.
Paul- thanks for the suggestion, and your cautionary remarks.
John- As usual,a great article on a very important topic. We should certainly continue to investigate alternatives to corporate utilites,such as the LA and Sacramento municipal districts.
Great article, John Lawrence. Thank you.
SEMPRA and SOCAL EDISON ratepayers should be reimbursed for the repairs to San Onofre that were promised but never materialized AND for the power that wasn’t delivered over the last full year when the entire plant has been shut down.
And then the Nuclear Regulatory Commission (NRC) should close the entire dangerous, deteriorating, leaky operation. (Think about Fukushima’s destruction and realize that high tide regularly washes over San Onofre’s inadequate tsunami wall.)
The NRC will meet later this month to hear testimony in San Juan Capistrano for San Diegans who want to join forces with the well-informed well-organized folks from San Clemente Green.
Finally, it’s worth noting that our native son, infamous energy deregulator, and former Sacramento legislator Steve Peace is both founder and principal in the deceptively-named lobbying firm called the Independent Voters Project.
Publicly owned, lower cost energy sources -like in Santa Clara, would make cities a more favorable location for businesses to set up shop. Attracting more jobs to our community. Lower cost energy, with equitable credit for home/business based energy generation, will also make the inevitable electric vehicle more cost effective and ordinary.
For profit energy generation and distribution.. will have to eventually shift its profit centers away from single source energy generation to servicing distributed energy generation, storage, and delivery..
And each home/business with private energy generation will become a sustainable non polluting highly efficient energy profit center on the grid..
Look into animal and plant cells -life, and there you will see not a capitalistic single point of failure energy generation and distribution system, but a distributed, efficient, redundant, more reliable energy generation and distribution system.
Why should a financial drain be placed on our vital energy systems where “profit” goes to those who contribute nothing to the product or service?
Natural systems derive a benefit that is distributed to all who give, take, and function within the structure.
For profit structures, tend to load the system down with unsustainable self destructive losses.
We are social animals. Social systems are good not bad. Anti-social systems are bad..
We need both social systems and for profit systems in the right places within our human society. Social Systems that are structured well and function well, set the standard and base line, by which the for profit systems can be compared and evaluated..
When you look at Bees, Ants and plant life… they have highly evolved social systems, they become super organisms, super efficient in meeting the needs of all their members. Something humanity has not yet attained.
Check out the coop business movement. . There are many successful cooperatively run businesses. This organization highlights some of the overriding principles of coops.
This movement, which is growing, may provide some insight into a possible solution to the problem you are expressing, which I believe lies at the core of the decline of the American dream.
Check out this article on co-ops: Cooperatives Over Corporations by Jim Hightower.
A whole slew of articles on c0-ops can be found here.
Articles on the Mondragon Corporation, one of the world’s most successful co-ops can be found here.
Articles on economic democracy can be found here.
You put the case clearly, John, for having our own energy, naturally based system here. You could take over a portion of the UCAN efforts to represent the best interests of the consumer, environment and our local economy. UCAN is currently under restructuring now that Michael Shames is out. YOu need more exposure so you’re not restricted to the “choir” so much!
Sandy Long
John,
A recent report perhaps of most interest to technical people that provides a professional update on how the German FIT system works in detail including the latest problems with FITs and related policy changes is: “The German Feed-In Tariff: Recent Policy Changes,” by Mark Fulton, Sept. 2012.
Another less technically detailed but very informative report on Germany’s progress with its new solar energy systems is: ” 10 Huge German Solar Energy Myths Bjorn Lomborg is Trumpeting,” by Zachary Shahan, March, 2012.
As is known, a few big German producers of solar cells have filed for bankruptcy (Q-Cells, Sovell0, Solon). Chinese products are +-20% cheaper as photovoltaics (PV) is ultimately relatively low tech. This is good for producers of German electricity but bad for German producers of solar cells. A positive trend is declining prices for lithium-ion batteries. This is expected to lead to a sharp rise in households adding batteries to their systems in 2013 to stimulate self-consumption rather than selling their power to the grid under FIT arrangements. German consumers are becoming increasingly attracted to idea of being independent from the grid, of having flexibility to maintain electricity during blackouts or utility peak load management crises during heat waves.
But the primary purpose of this post is to focus attention on a series of comments by an anonymous Tony C. about another easy, cost-effective quicker way to implement self-reliant solar energy systems on (preferably) individual households — invloving millions of private generating points rather than a few large generating points.
Reader comments are most welcomed about following Solar Thermal concept outlined in article: “Germany Hits Record in Solar Power With 50% of Energy During Mid-Day Hours.” I’ve edited Tony C.’s comments to article and sequence of same while generally using his own words.
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From: ” Germany Hits Record in Solar Power With 50% of Energy During Mid-Day Hours” : Comments by Tony C.
If power were generated everywhere, we would evolve systems that made power uniquitous, e.g., cell phone towers could generate their own power on site, and both the cellphone network and the Internet could remain up and running regardless of what happens to the main grid. The main grid would become a “backup system.”
This may not be possible for PV or wind. They require too much space or cost too much per watt. BUT, Solar Thermal could work all the way, by itself, even to powering an all electric transportation system. The simplicity of the concept is key to its acceptability. A home-grown micro grid DC is a much more cost effective approach than thinking that power needs to be generated on a massive scale and transmitted over long distances in AC to be effective. A home-grown system reduces the infrastructure, reduces the impact of outages, and is simply more robust.
The price of Solar Thermal can be driven down to that of coal or hydro. The trick is to reinvent the “steam engine.” With modern materials and precision, steam engines can be made that do not require lubrication or cooling. A steam engine itself has Zero emissions except for water and heat, and the heat can be recycled in a way that makes the steam engine about 70% efficient in converting heat to electricity. The 30% “waste heat” is no environmental problem.
The simplicity of the system is self-evident. It’s a system of mirrors focusing light to provide the heat for a steam engine boiler. Any car expert can become an expert on the steam engine; any home electrician can become expert on the electrical end; the mirrors can be stamped out industrially at a cost of 15 cents per sf and are installed and adjusted very much like a satellite dish.
The average American home is 2,400 sf and uses 31.5 kWh per day. Sun energy is 0.381 kWh per sf. (4.1 kWh per sq. meter of collection area or 0.381 per sf). The typical efficiency of Solar Thermal to Steam with Off-the-Shelf components is 7.5% (butt 44% has been achieved with modern materials, heat recycling and purpose-specific engineering). At a 7.5 % efficiency, the sun’s energy drops to 0.0285 kWh per sf. For an average home to get 31.5 kWh, this requires 35 sf per kWh or 1,103 sf of solar collective area. But 1,103 sf is only about 46% of the sq. footage of an average home — the roof could cover all of this. Typical peak electricity usages are double the average. So double the collection area on the roof, and on average the home will generate twice its consumption.
It’s not expensive to double the collection area. Unlike PV, this is all just cheap, polished aluminum mirrors, probably single axis sun-tracking parabolic troughs — capable of being produced entirely by robots for maybe $1.50 per sf. (Editor’s note: of course installation would have to survive environmental storms). On average, 22% of usage is for cooking. Covering the roof with mirrors has been shown to reduce cooling needs by 30% to 50%. This amounts to a 10-15% reduction in energy usage.
There are 125 million homes on the electricity grid. In 2011, America generated a total of 4,100 billion kilowatt hours of electricity for all uses (residential, commercial, industrial). So, total generation averages about 32,800 kWh per house per year. That is about 90 kWh per house per day. Now recall that 1,103 sf will generate 31.5 kWh per day, so 2400 sf will generate 69 kWh per day or aboutn 76% of the national need. That much electricity can be generated by a 20 horsepower steam engine running on average 6 hours a day!
This means ultimately NO coal (42% of U.S. electricity generation), NO gas (25%), and NO nuclear (19%) will be required. All of our current national electric needs can be met by Off-the-Shelf Zero emission technology. Using residences alone, all coal and natural gas generating plants could be decommissioned in short order (and certainly in far less time than is possible by PV). If we go from a 7.5% efficiency to just 37.5%, or 5 times as much, we could cover electric cars and then we are off oil. All that can be done with already proven prototype systems.
I’m not saying we have to abandon wind and other systems. I am saying we do not really need a “magic bullet”, or new technology, or more basic research, or rare materials, or new chemistry, or huge investments. Solar Thermal is executable with aluminum, copper, iron, steel, and glass. The components could be not be more common, or the technology easier to comprehend.
The solutions are not esoteric or difficult to understand and implement. We could be a 98% (editor’s note: or at least 75%) Zero emission electrically powered energy independent nation in a relatively short time. Thermal Solar collection exists at 98% efficiency, heat transference hits 95% routinely. Steam engines have hit 46-50% efficiency. Relatively inexpensive inverters are 95% efficient. That amounts to a 44% efficiency from insolution to electric energy (and three times the power of photovoltaic). It would reduce the area needed for a home, to power the home, to about 100 sf of mirror (a 24 x 8 foot parabolic trough, for example).
I think companies will get off the grid because the time will come when generating electricity yourself will be cheaper. There’s no good reason for Solar Thermal to Steam to Electricity to be as expensive as current electricity production, particularly coal, when all the environmental and health costs (from CO2 emissions) are taken into account.
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(Editor’s note: Today, one kWh of electricity produced by new solar energy plants in Europe averages 0.14 euros ($0.18 cents) to 0.18 euros ($0.23 cent using roof top solar panels in Germany) including heavy special duties, taxes, subsidies — levied explicitly on electricity and fossil fuels to make them expensive and thereby stimulate energy saving and make renewable energy competitive.
A kWh of electricity costs Los Angeles and San Francisco $0.20 to $0.25 cents compared to a nation-wide electricity price average of $0.13 cents per kWh. And almost 50% of all U.S. energy is produced by the dirtiest energy source of all, coal. One kWh of electricity produced from a new nuclear power plant costs $0.20 cents — excluding the risks of a nuclear accident. Latter add another $0.11 cents to 0.34 cents to nuclear electricity costs for a total cost between $.31 cents to $0.54 cents versus $0.13 to $0.34 for an old nuclear power plant.
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The German Feed In Tariff has been almost too successful. The way it works is the government pays individual homeowners or farmers or whoever has ownership of some land or facility that has exposure to the sun a premium for the electricity they generate with solar panels and that they put back on the grid. The premium is paid for by a slight tax on electricity consumption by all Germans. This has produced a massive increase in solar generated electricity to the point of almost having too much of the stuff. Germany will soon have 100% of its energy generated by non-carbon polluting sources. For more see How Germany Is Getting to 100% Renewable Energy
US utility companies have fought similar schemes because it detracts from their profits.
FIT’s are also used in other European countries. Even nuclear France has jumped on the solar bandwagon.
The reality why a 90% reliance on Fossil Fuels threaten human life on this planet over the next 40-50 years rests upon Bill Mckibben’s THREE CRUCIAL MATH NUMBERS:
(1) An earth average mean temperature increase of 2 degrees Celsius (or 3.6 Fahrenheit) is the upper limit planet earth can tolerate.
(2) A CO2 emission level of 565 gigatons (a gigaton is 1 billion metric tons) is the maximum CO2 that can be released into the air by 2050 and still remain below a 2 degrees Celsius increase; at current annual rates of coal, oil usage and related CO2 emissions (ignoring 70 times more toxic CH4-methane), we will reach the 565 gigaton CO2 emission level within 17-20 years or 2030.
(3) There are 2,795 gigatons of CO2 contained in all of the oil industry’s proven reserves of coal, oil and gas that are available for burning over next 40 years.
The conclusion is obvious. It’s time to give coal, oil and gas an honorable step-by-step early retirement, and start NOW aggressively transforming to 80-100% home grown Non-Carboniferous energy sources by 2050. A carbon tax is a small but pragmatic first step along with all an out focus on photovoltaics, wind, solar thermal, etc., on a community self-sufficient basis.
As Bill McKibben stated recently:
“Climate change is the single biggest thing that humans have ever done to this planet. The one thing that needs to be bigger is our movement to stop it.”
Only problem is the oil firms have all their money assets in the ground, and they want to exploit these buried, finite, atmospheric destructive assets no matter what.
The problem is simple, doing the right thing for us people and our planet hurts the profits of companies that write the laws…
We all know this, and by the way, the GOP are the companies’ congressional representatives.. The companies have the best representatives that money can buy!
We live in a Corpocracy…
iam he,
I couldn’t agree more. BUT, it’s equally disastrous to lay back and relinguish the destructive high ground to established “Corpocracy” interests sponsoring fossil fuels, for example, as life’s answer to the general well-being and universal environmental protection of ALL living matter.
As others have stated so well, common folk must press uncompromisingly for the social-economic human priorities of PLANET, PEOPLE, and PROFITS — as opposed to the current inhuman social order of prioritizing SHAREHOLDERS, PROFITS, and PEOPLE LAST!
Until we do this in concert with the scientific realities of disastrously earth-warming pollution by fossil fuels as well as looming scarcity of life giving natural macronutrient resources — water, potassium and phosphorus — we are most stupidly risking, if not insuring, a “struggle to death survival” for our grandchildren and their children in the second half of this century.
Questioning the veracity of this scenario confirmed unequivocally by a vast majority of the scientific community today is NOT worth the gamble to later generations! The stakes could not be more ominous!
It’s still not too late to fix the ills related to human-induced climate warming and food-based resource limitiation. If ever there was a time to WAKE UP that the days of abundant resources and continuing absorption of CO2/CH4 greenhouse gas emissions into the atmosphere HAVE COME TO AN END, NOW IS THAT TIME!