What lobbying buys (hint-it's in the billions)
 |
We did a search on PG&E's website
and found meager results for the
word "photovoltaic." Try it yourself. |
What did their money buy? The multi-billion-dollar, taxpayer-bond-funded transfers of utility assets were paid for by similar palm-greasing in 95-96, so what are they buying now? They're trying to protect their monopoly franchises! After the 'deregulation' fiasco they thought they wanted, the IOUs (Investor owned utilities) are now fighting for market control. The IOUs, bastard children of supposed 'deregulation,' can't understand that their only job is delivering power from generator to consumer. They want to play their old rate-making games with 'standby charges' and other past profitable ploys.
Open market access by all power producers frightens the IOUs, part of a battle between them and consumers. The IOUs want big users to deal on the utilities' terms; the big users want to get the best prices-a challenge for Governor Davis 'dueling donor' leadership. Some California legislators realize that, without government intervention, the utilities and major end users will strike an accord that makes individual ratepayers responsible for all the money spent since the crisis started (a 'Savings & Loan bailout' for utilities). Watch for the battle over State Senator Debra Bowen's (D-Marina del Rey) bill to reinstate direct access, which recently cleared the Senate Energy Committee.
The real risk: IOU lobbyists will have measures attached to pending bills to kill distributed power and the independent power suppliers, just as they killed direct access via Governor Davis' recent emergency regulations and subsequent energy-purchase bills. Big users won't mind - they will use energy brokers quoting the best price.
Utilities' historic abuse of small, independent power generators
The IOUs and their holding companies have long abused small, independent producers, paying only a fraction of the value of power they receive from those independent producers, especially when (as with photovoltaics and wind) they pay less than 7 cents/KwH while their deregulated subsidiaries sell at greater than 40 cents/KwH, with peaks approaching 90 cents/KwH projected for summer 2001. How fair is that?
If the utilities had to pay PV power producers market rate for peaking power to match summer air-conditioning, PV installation would match the gold rush! The PV manufacturers understand; today, most admit that their production costs are at 'demonstration' level vs. what mature production will achieve. After all, the average commercial PV plant only produces ~10MW/year. The PV manufacturers worry that massive manufacturing investment in markets controlled by campaign funds and manipulation could temporarily dry up their markets. Though such disruptions would only be short term, they could cripple the economics of major PV plant investment. In this case the Government should enforce a fair market. Will they?
Ensuring fair PV markets
There are several ways to create fair PV markets. One example: Sacramento's innovative Photovoltaic Pioneer Program is installing panels as fast as they can, at 16-18 cents/KwH, with firm commitments that will cut their cost below 10 cents/KwH by 2002 (source: From Space to Earth, The Story of Solar Electricity, by John Perlin). Los Angeles Department of Water and Power's more aggressive program, with Siemens (www.SiemensSolar.com) subsidizes
PV power at $5/watt (essentially panel cost!).
Why do municipal utilities trying to provide lowest-cost power to users fund homeowner photovoltaics�so they can avoid paying scalpers' rates during peak air-conditioning loads while PG&E and other IOUs don't? Windpower is similar.
Unfortunately, California's incentive program is still restrictive, available only to small individual systems, limited to a few million dollars per year. In round figures, for every dollar the utilities got from deregulation via the State and ratepayers, California spent less than a cent on supporting PVs. If the States, especially Arizona, California and New Mexico, commit to buying PVs by guaranteeing fair rates and tariffs, PV makers will meet the challenge and become a major economic factor in those States.
So what's the solution?
First, the Federal Government should make massive PV-cell and green-power buys. Successful programs include the GSA's 120 KW Suitland (MD) Federal Center (if President Bush looks out of his helicopter, between the White House and Andrews Air Force Base, he'll see it clearly). The Pentagon has identified 3,000 MW of diesel power that could be replaced by PVs. The government is a huge market both for hardware and electricity. If the Feds mandate PV or green power, the effects would be dramatic.
Second, State and Federal Goverment
legislation should allow true distributed power to compete on the
grid. Even the government has documented the sorry story of utility
behavior. See "Making Connections," Case Studies of Interconnection
Barriers and their impact on Distributed Power Projects, May 2000,
NREL/SR-200-28053. Implement the 10-point plan (see
www.distributed-generation.com/Library/Making_Connections.pdf for
the executive summary) on a State and Federal level. Result: PVs
will be produced and installed at a rate of thousands of MW/year,
cheaper than any hydrocarbon equivalent, paving the way for the next
step in the Point Reyes LIGHT National Energy Plan.
