Well, that was awkward!

I am on the homeward leg of my first business trip since the Covid shutdown. I report that the hardest part about it was finding a public restroom in the San Francisco Bay-area. I mean, the planes were clean. So were the hotel rooms. The traffic was a breeze. But let’s say you had a cup of coffee in Sacramento. Then you drove to Oakland Hills to meet a member and you had another cup of coffee. Before you drive to see another member in San Jose, you need to find a public restroom. Good luck with that. I was almost reduced to knocking on doors.

It was good to get out, but the changes required by Covid add a certain level of stress as everyone tries to figure out what is appropriate given that each person has a different risk tolerance. It was also surreal arriving at a formerly busy SFO on a Sunday night and finding my flight was the only one in the terminal. If you ever saw the Will Smith movie “I am Legend”, that was about the level of strangeness.

A Business Card & An Elevator Speech

Ever find yourself on a flight next to someone who just wants to talk? You know, you exchange pleasantries and you think you can go back to watching a movie, doing work, or reading and this person does not stop talking. That was my first leg of the trip. According to the flight map, this guy talked from Chicago to Utah. What made it worse was that he was telling me of his “second business” – trying to sell solar projects to manufacturing clients with battery storage as if this were a new idea. He had never been in the industry, and did not even know the difference between energy and ancillary services. He honestly thought all he needed to do was offer a solar project with some battery storage and SNAP! Everybody could have cheap, clean power without any connection to anything else.

This is what it has come to – a business card and an elevator pitch. Years of easy credit resulting in too much money chasing anything for yield. Stocks have been going up since 2009 and appear ridiculously expensive. Corporations have had access to cheap money to buy back stock, buy other companies, make other investments. Tax cuts have increased the flow of funds looking for a home. The result: we have people thinking the promise of renewable energy and batteries is an easy, money-making machine.

This situation was both comical and annoying. I really did not want to explain all the complications around duration and discharge of batteries. I did not want to have to explain how some kind of contractual relationship to a traditional energy source would be needed to balance any customer’s needs. I could not get myself to explain the interdependency of the grid and everyone on it. This kind of naivety may be driven by lazy media reporting of the promise of renewable power combined with the existence of too much easy money. The danger is that these prevailing expectations will continue to feed into political discussions which will put pressure on regulators who perhaps know better but don’t want to look like a “downer” to the enthusiastic political bosses.

I am all for renewable integration to the grid. I am totally down with economy-wide efforts to deal with threats to the environment and real possibility of climate change like carbon pricing. But we need some realism to begin to pervade political discussions. Part of the problem is that at the basic level of political discussion there is either; 1) the camp that thinks renewables are a political fad cooked up by “elites” or 2) the camp that thinks anyone who is not in favor of all renewables all the time is evil. Knuckle Draggers vs. Irresponsible Elites. It almost sounds like a WWE tag team match. Is there any place for informed and sophisticated discussion?

Time to step back…

Just this week, the CPUC suspended part of a process to consider next steps in the acquisition of assets to provide Resource Adequacy (RA). This was after the CPUC had voted to establish Southern California Edison and Pacific Gas & Electric as the central buyers of RA for local needs of all load serving entities in their respective service territories. The CPUC also agreed to adopt a requirement that all RA imports not only “must offer” but “must flow” and at all times. WPTF and many others are on record as opposing both of these orders on the basis that they undermine competition, efficiency, reliability, and local control.

Among the many reasons to oppose these significant changes to RA is that they move California further away from a workable West-wide RA procurement process. This is crucial as California has always relied upon imports to maintain reliability. Now, the situation is more urgent as regions like the Pacific Northwest are retiring thermal generation while also experiencing load growth. A worry by many operators in the region is that regulators in both California and the surrounding states are counting on the same megawatts to assure reliability. A coordinated, regional RA structure is becoming more crucial even as California looks inward.

Yet even so the West is moving – however slowly – toward a regional RA concept. It would benefit every state in the region if California could step back and consider how it can fit into a regional concept. Consider the following: 1) gas has lately been providing 10,000 megawatts or more in dispatch a day to help manage the curve when solar comes off the grid at the end of the day; 2) there is not enough storage at any reasonable cost to cover this need; 3) Once Through Cooling (OTC) units will be retired in 2023; and 4) the Diablo Canyon nuclear plant will retire in 2024.

While the Northwest Power Pool works toward a regional approach to RA, is now the time for California to look only to itself, or is it time for California to take a step back and see how it can integrate into a regional RA framework? Common sense would seem to argue for the latter approach and maybe the CPUC suspension of next steps for RA offers an opportunity.

There are smart people on the CPUC staff. Perhaps they will take the step of reflection, sober discussion on realistic approaches to reliability and renewable integration, working collaboratively with the California Independent System Operators (CAISO). If not, we may be at the mercy of the guy on the plane with a business card and an elevator speech.