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California is choosing natural gas over Diablo Canyon’s clean energy

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Bob Meinetz's picture
Nuclear Power Policy Activist Independent

I am a passionate advocate for the environment and nuclear energy. With the threat of climate change, I’ve embarked on a mission to help overcome the fears of nuclear energy. I’ve been active in...

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By Jameson McBride and Ted Nordhaus

June 03, 2021

 

Faced with a recall election this year, Gov. Gavin Newsom is scrambling to ensure the lights will stay on this summer.

Rolling blackouts during a heat wave last August sent a clear warning: Utilities didn’t have enough power to meet periods of high demand. The pending 2025 closure of the Diablo Canyon nuclear power plant, one of the state’s largest sources of clean electricity, will only make the situation worse.

In response to last year’s blackouts, the State Water Resources Control Board has quietly extended waivers to natural gas plants on the California coast that had been scheduled to close because they use ocean water for cooling, exempting them from a ban on the practice the board established in 2010, when Newsom was its chairman.

These plants are among the dirtiest in the state and disproportionately impact low-income communities of color. Allowing them to continue to operate blows a hole in the state’s climate goals.

www.sanluisobispo.com/opinion/readers-opinion/article251845563.html

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Audra Drazga's picture
Audra Drazga on Jun 4, 2021

Bob interesting.  I just read another article on the site that talked about Sacramento working on a policy to get rid of natural gas and all new homes will need to have all-electric appliances? Have you heard anything about this.  It will be interesting to see how California will power their cities when they get rid of Natural Gas and Nuclear while increasing the usage of electric cars?  

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Bob Meinetz on Jun 4, 2021

Yes Audra, there is a movement among California communities to restrict or prohibit gas service in new home construction. Berkeley was one of the first, now there 24 communities with regulations on their books.

"It will be interesting to see how California will power their cities when they get rid of Natural Gas and Nuclear while increasing the usage of electric cars? "

There is no interest in California in getting rid of natural gas.

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Bob Meinetz on Jun 4, 2021

Audra, now there are 24 communities in California with building codes that either restrict or prohibit gas service to new homes.

The goal is not to get rid of natural gas, however. Far from it - the goal is to burn even more. Even efficient combined-cycle gas turbines (CCGTs) at modern gas-fired electricity plants waste at least 30% of their fuel's energy; transmission to point-of-use wastes 9% more. That means nearly 40% in additional profits can be billed to electricity ratepayers as a cost of fuel. Energy holding companies with both electricity and gas subsidiaries (Sempra, Edison International, PG&E Corporation) stand to make out like bandits. They are literally being paid to waste gas.

You may think "How can they be allowed to get away with that?". Gas interests spend $tens of millions each year on lobbying and campaign contributions for California legislators and at the governor, and when the governor appoints commissioners to the California Public Utility Commission, the California Energy Commission, and the California Independent System Operator, guaranteeing gas's role in electricity generation is a fait accomplit. 

Since the 1990s, when it became clear electric vehicles were the way of the future, oil companies have been hell-bent on dominating electricity generation with gas - at whatever cost to the environment, at whatever cost to electricity ratepayers. Any money spent on lobbying is a drop in the bucket.

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Michael Keller on Jun 7, 2021

Thermodynamics drive plant efficiency and combined-cycle plants are the most efficient machines thus far created, and by a huge margin. Transmission losses are a function of distance between the load and generators. Combined cycle plants are readily located near major load centers. 
From a technical, environmental, and economics standpoint, combined-cycle machines are an excellent way to provide power. Roughly, 70% of the cost to run a combined-cycle plant is fuel.

I suspect your real issue lies with profiteering associated with the the cost of the gas used by the power plants. Ordinarily, profit is tied to the Plant Owner’s investment to build the plant, with fuel just another expense. The combined-cycle plants are relatively inexpensive to build, thus “profits” would not be that much of an impact on consumers’s bills. Pretty clear, with 70% of costs tied to fuel, someone is gaming the system to enrich themselves. Seems to me the politicians have allowed that to happen - the power companies have likely greased a few palms. The politicians are the guilty party.

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Bob Meinetz on Jun 7, 2021

"I suspect your real issue lies with profiteering associated with the the cost of the gas used by the power plants...pretty clear, with 70% of costs tied to fuel, someone is gaming the system to enrich themselves."

You nailed it, Michael. It's an old scam that was banned during the Depression, but was legalized again in 2005.

Holding companies of the 1920s that owned both gas and electricity subsidiaries charged ratepayers exorbitant profits on the gas they used to generate electricity. And why not? Buying gas "from themselves" at outrageous prices, then sending electricity customers the bill, was 100% legal. They could make even more money on the sales of fuel than on the electricity it generated.

FDR's Public Utility Holding Company Act of 1935 (PUHCA) recognized this conflict of interest (among others) and prohibited the practice. It ushered in an era of unparalleled, cheap access to electricity that lasted for seventy years.

Under the administration of George W. Bush, Texas oil interests saw a window of opportunity. By including a few subsidies for wind and solar in the legislation, they figured, they might be able to distract doe-eyed green activists enough to repeal PUHCA and its protections for ratepayers. In 2005 they succeeded - and within months, energy companies were up to the same old tricks.

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Michael Keller on Jun 7, 2021

The impact on the ocean from the plants cooling water is insignificant. I suspect these gas plants are old, really inefficient with relatively high levels of emissions. They should have been replaced with modern, vastly cleaner, more efficient and cost effective combined-cycle gas plants but the California coastal regulations and commissions prevented that from happening. 
The ineptness of California politicians and bureaucrats never ceases to amaze me. The losers in all this, as always, are the consumers and taxpayers.

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Bob Meinetz on Jun 7, 2021

Michael, there is little/no incentive to replace an inefficient gas plant with an efficient one if you're the CEO of an energy company in a state that forbids you from charging a profit on sales of electricity, but allows you to charge a profit on sales of the gas burned to generate it. The less efficient your plant is, the more money you make.

As much as I loathe California's governor I think it's unfair to call him "inept". With substantial holdings in natural gas, it was he who appointed all the commissioners who make his graft possible. If anything, his cunning and exploitation of his state's residents has been masterful.

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