17 ms·

Californians are paying billions for power they don't need

103 points by blondie9x 10y ago

maxerickson 10y ago
$1 billion is about $30 per California person. So Californians can spend a billion without it being much of an emergency. Doesn't mean they should be happy with waste/poor regulation, just that billion isn't all that impressive a benchmark given the population of the state.
- will_pseudonym 10y ago
  And it isn't exactly self evident that it is "power that they "don't need." Increasing power production would reduce costs for everyone, which would be great for consumers, especially the poor.
  - maxerickson 10y ago
    The way generation is regulated, excess capacity doesn't necessarily reduce rates (the utility gets approval to increase rates to cover the capital cost of generation).
  - guard-of-terra 10y ago
    Producing more energy than it's possible to consume and then "splitting the bill" is especially a tax on the poor, since they will feel the 50% difference in price that article mentions, more than anyone.
- appleiigs 10y ago
  The article says $6.5 billion and an extra $60 per person.
refurb 10y ago
Critics agree that some excess capacity is needed. And, in fact, state regulations require a 15% cushion. California surpasses that mark and is on pace to exceed it by 6 percentage points in the next three years Hmmm... as soon as I hit this point in the article I really lost a lot of enthusiasm to keep reading. The article throws out all these shocking stats about too many power plants, show a scary graph where the supply keeps going up even though demand if flat. Frightening!! The they readily admit that a 15% surplus in generation capability is a good thing! In fact it's a requirement by law. Suddenly a 21% excess doesn't seem all that scary.
- arjie 10y ago
  Yeah, this is just California staying ahead of a potential problem. Good for the people in charge. So we have a 50% buffer against our legal threshold and for very little money. That's just good planning.
  - appleiigs 10y ago
    Why do you want a 50% buffer on the 15% buffer? And it's not very little money. It says $6.5 billion more, which I think is an annual number.
    - arjie 10y ago
      If there's a legal requirement, I would be uncomfortable being right on the edge of it. In any case, the problem here seems to be that regulatory approval for additional plants is supporting Public utilities like PG&E who have guaranteed returns over independent companies who don't have guaranteed returns. It looks like we need the ability to exempt proposed projects from the guaranteed returns in order to fix the misaligned incentives here.
      - DannyBee 10y ago
        You seem very confused. the regulators here made the legal requirement It's not like an independent set of experts in charge made it. California made it, and in fact, most experts (in the very same article) seem to think it's "pretty rich". The regulators made the legal requirement, so saying "it's good the regulators are doing this because it's a legal requirement" is super-circular logic when the very same regulators made the legal requirement.
        arjie 10y ago
        No, you're right. When I first read it I completely misunderstood.
  - Lazare 10y ago
dmritard96 10y ago
I am tangentially in this space in that we build tech that allows for demand response capabilities, specifically for mini-split and other air conditioning systems (https://flair.co https://flair.co, shameless plug). This article seems to be missing some important details that are rather relevant in statements of 'capacity' and 'demand'. Specifically, demand is dynamic with energy 'rush hours' at certain times of the day and lows at others. One reason that this is relevant is that often times these companies build 'peaker' plants to handle the rush hour loads that may be present significantly less than 1% of the time. Its not that you neceisarily need to speak to this phenomena but treating demand as a static number leaves a bunch of things unclear. For instance, what is the average over capacity and what is the excess capacity at peak demands. Another thing that was missing to me - electric cars and gas systems. At the moment a decent amount of space heating, water heating and cooking systems require gas but arguably as we begin cleaning our power sources, it will make less sense to use gas and having more electric capacity will make making this sort of decision or switch much easier. Not to mention safer given the massive gas issues in southern california recently... In terms of electric cars - I haven't seen the growth numbers or how much anticipated load there is but it seems like electric cars over the next 10 years may add a nonnegligable load to the grid. This is also complicated as the solar generation capacity and localized storage (power walls and other similar at home batteries) markets are just starting to get interesting. I would love to see a more comprehensive story with numerical predictions about where additional loads and suppliers are headed instead of bickering between industry veterans. It seems like depending upon how those shake out, this excess capacity could prove even more foolish than some are arguing or it may seem forward looking. Interesting article but missing some of the more dynamic and relevant questions so making a more conclusive judgement is limited at best imho.
- CaliforniaKarl 10y ago
  Completely anecdotal, but among apartment-dwellers, I doubt electric cars will take off as much as one might expect. I live near the Palo Alto-Los Altos-Mountain View border, and I've lived in two apartment buildings, one of which was just built (I was the first to move into my apartment, 12 months ago). My first place had no electric vehicle charging at all, and the second has a total of four spots, which aren't shared. I already have my own electric meter for my apartment, and I'd be perfectly happy to pay for a second meter at my carport, but I don't see that happening soon, and so that makes me wary to buy an electric car.
stevenmays 10y ago
I fully recommend The Grid by Gretchen Bakke. It goes over this subject in great detail. Link: https://smile.amazon.com/Grid-Fraying-Between-Americans-Energy/dp/1608196100/ https://smile.amazon.com/Grid-Fraying-Between-Americans-Ener...
pfarnsworth 10y ago
My dream is solar shingles, like what they advertised late last year, and a Tesla house battery, but my electricity costs are $50/month, maybe $60 if I decided to get lazy and use my heater downstairs in the morning. And this is for a reasonably-sized home in the SF Bay Area. Even if I got AC (I currently don't have it), it still might not be enough to justify solar panels. I think I would have to convert all my gas appliances to electricity, and then it would push me into territory that would justify them.
- dx034 10y ago
  Solar panels can still make sense, you can sell the excess energy you don't use. The amount you currently spend doesn't really affect how profitable solar panels can be. It's rather a concern if you want to be independent of the grid.
CaliforniaKarl 10y ago
I wonder, if there were more data center capacity in the state, would that help? For example, take Tracy, or some of the land around SR 46 west of Lost Hills: If a cloud provider built facilities there, that would add a fairly constant draw on the state's power supply, with some small flexibility[1]. I wonder if that would be enough to reduce CA electricity prices (as weird as that might sound). [1]: In the case of AWS, imagine if there were a power shortage, they could respond by massively increasing spot prices, causing load shedding, and allowing hardware to shut down.
tn13 10y ago
Californians are paying a lot of money for things they don't need. A high speed train, subsidies for dairy and what not.
tristanj 10y ago
I'm not sure how the author managed to write this article without mentioning that California imports over 33% of its electricity every year. Up from only 25% net imports 6 years ago.
ChuckMcM 10y ago
I would be happy if we could just turn off coal[1] rather than these plants. [1] http://www.energy.ca.gov/renewables/tracking_progress/documents/current_expected_energy_from_coal.pdf http://www.energy.ca.gov/renewables/tracking_progress/docume...
jedberg 10y ago
In 1999, I worked in IT, and one of the graphs we had on our "big board" was a feed from the CA power grid, showing utilization vs peak generation capacity. We had to keep an eye on it because if usage got to close to capacity, the state would start rolling blackouts, which might shut down the server room in our office, so we had to be ready and shut down any non-critical machines so that the rest could shut down after switching to the UPS. It was not a good time. It's also important to remember that these things take a long time to build, so they were still being approved when solar was expensive and server rooms were still expanding. I think it's a good thing that they are over provisioned and anticipating future growth. I would assume that generation will get closer to the demand curve over time as it levels out.
- tyre 10y ago
  If you're referring to the CA electricity crises of 2000/2001, these were caused by Enron manipulating energy supply.[1] Smartest Men in the Room is a great book about Enron's history. [1]: https://en.wikipedia.org/wiki/California_electricity_crisis https://en.wikipedia.org/wiki/California_electricity_crisis
  - jack9 10y ago
    But not the subsequent ones? "the ISO has imposed short rotating outages in 2004, 2005, 2010 and 2015, mostly related to unexpected transmission line or power plant outages during periods of unusually high demand." - Rueters
    - jmanderley 10y ago
      That sounds like an issue of transmission capacity and redundancy, not energy production.
  - jedberg 10y ago
    At that time yes, but the point was being too close to peak generation is cause for concern, so having an overhead is a good thing and hard to predict in the timescales it takes to approve and build a power plant.
moo 10y ago
Early 2000s Californians were having rolling blackouts. Was it really bad planning or due to Texas energy crooks Enron?
Animats 10y ago
I wonder about this article. Natural gas plants are mostly fuel cost over their lifetime. It's common to run natural gas plants only during peak periods, and startup and shutdown are straightforward. There's nothing wrong with 47% utilization of a natural gas plant. I'm happy having lots of redundancy in electric power. California has earthquakes, wildfires, and droughts. Keeping the power on through those is worth a little extra cost. Also, think of it as being electric car ready.
- stdbrouw 10y ago
  The article doesn't address this, but the interactive graphic does: 831 out of 1170 California power plants (71%) are operating at less than 1/3 of capacity.
  - Animats 10y ago
    That's about normal. The peaking plants shut down off-peak. Last night's California power demand was about 20GW at minimum. Peak today is about 30GW. The historical peak (Jul 24, 2006, hottest day recorded in California, with 38 heat-related deaths[1]), was 50GW. Generating capacity has to be sized for that peak. [1] http://www.caiso.com/outlook/outlook.html http://www.caiso.com/outlook/outlook.html [2] https://en.wikipedia.org/wiki/2006_North_American_heat_wave https://en.wikipedia.org/wiki/2006_North_American_heat_wave
    - stdbrouw 10y ago
      Initially you mentioned that 47% is fine, now <33% utilization is also fine, okay, but what kind of utilization isn't?
      - Animats 10y ago
        Generating capacity is needed based on the peak, not the average. On the peak hour of the peak day, you'd like to have 15% more nameplate capacity than you're using. Some stations will be out of service for maintenance, and something may fail. PJM training on this: [1] [1] http://www.screencast.com/t/9qPkoGacrnm http://www.screencast.com/t/9qPkoGacrnm
kissickas 10y ago
Excess power in California? Sounds like a good time to build a desalination plant.
matt_wulfeck 10y ago
Excess power is kind of like garage space. If there's any available, we'll usually find some to take. The amount of potential energy from rooftop solar is insane. It's so powerful and cheap that in my home buying selection I'm avoiding homes with obstructed south-facing rooftops. Rather than building plants we should be expanding the "dumb" residential grid to handle many, many more kW of residential solar and fairly subsidize the owners who feed it.
- tdb7893 10y ago
  Rooftop solar is already oversubsidized by net metering in many places. I would be much more for it if rooftop solar could guarantee capacity (and therefore actually reduce infrastructure costs on the grid) and was paid the wholesale instead of retail costs for electricity but as it is the utility companies are losing money for all the power that goes on the grid and that money is only going to people rich enough to buy dollar panels. I haven't talked to someone recently but last time I checked residential solar was often inefficient compared to commercial solar and a subsidy for the rich
  - matt_wulfeck 10y ago
    The issue as you say in the beginning is capacity. Part of the solution is certainly energy storage (and here's tons of innovation happening here, ala tesla batteries etc). The other part is smartening the grid to utilize the most power when it's the most available. I can imagine a desalination plant that cranks during the hottest part of the day when electricity is cheapest, and slumbers during the night. Of course most of these problems are usually issues of economics. When it becomes cheaper to do it then it will happen.
    - tdb7893 10y ago
      The problem right now is that if you look at it economically rooftop solar doesn't make a lot of sense and is mainly being driven by subsidies (which are being paid for by everyone else). My guess is that large scale commercial solar will end up generally more economical than rooftop solar.
deleted 10y ago
[deleted]
Shivetya 10y ago
So basically a regulated public utility used its position to build plants to push independents out of the market all the while knowing the capacity wasn't needed. It was a power play supported by the regulating committee that should have said no. The first step in fixing such issues is to block those companies protected by status of being public utilities from contributing to political campaigns. The issue not covered by the article from what I can see is, how much of this is baseload power and no peak power or variable (renewable)
stdbrouw 10y ago
Not saying the article is perfect, but I'm seeing the same one or two counterarguments presented over and over again in almost identical fashion. Am I paranoid or are we being astroturfed?
davidf18 10y ago
Higher energy prices lead to less electricity use which leads to less greenhouse gas emissions.
nickjarboe 10y ago
Maybe electricity rates in California should be dropped to increase demand. The state has one of the highest electricity rates in the country [1]. [1] http://www.neo.ne.gov/statshtml/204.htm http://www.neo.ne.gov/statshtml/204.htm
moreoutput 10y ago
So Tim Burton's second Batman movie?

103 points by blondie9x 10y ago

$1 billion is about $30 per California person. So Californians can spend a billion without it being much of an emergency. Doesn't mean they should be happy with waste/poor regulation, just that billion isn't all that impressive a benchmark given the population of the state.

will_pseudonym 10y ago
And it isn't exactly self evident that it is "power that they "don't need." Increasing power production would reduce costs for everyone, which would be great for consumers, especially the poor.
- maxerickson 10y ago
  The way generation is regulated, excess capacity doesn't necessarily reduce rates (the utility gets approval to increase rates to cover the capital cost of generation).
- guard-of-terra 10y ago
  Producing more energy than it's possible to consume and then "splitting the bill" is especially a tax on the poor, since they will feel the 50% difference in price that article mentions, more than anyone.
appleiigs 10y ago
The article says $6.5 billion and an extra $60 per person.

refurb 10y ago

Critics agree that some excess capacity is needed. And, in fact, state regulations require a 15% cushion. California surpasses that mark and is on pace to exceed it by 6 percentage points in the next three years Hmmm... as soon as I hit this point in the article I really lost a lot of enthusiasm to keep reading. The article throws out all these shocking stats about too many power plants, show a scary graph where the supply keeps going up even though demand if flat. Frightening!! The they readily admit that a 15% surplus in generation capability is a good thing! In fact it's a requirement by law. Suddenly a 21% excess doesn't seem all that scary.

arjie 10y ago
Yeah, this is just California staying ahead of a potential problem. Good for the people in charge. So we have a 50% buffer against our legal threshold and for very little money. That's just good planning.
- appleiigs 10y ago
  Why do you want a 50% buffer on the 15% buffer? And it's not very little money. It says $6.5 billion more, which I think is an annual number.
  - arjie 10y ago
    If there's a legal requirement, I would be uncomfortable being right on the edge of it. In any case, the problem here seems to be that regulatory approval for additional plants is supporting Public utilities like PG&E who have guaranteed returns over independent companies who don't have guaranteed returns. It looks like we need the ability to exempt proposed projects from the guaranteed returns in order to fix the misaligned incentives here.
    - DannyBee 10y ago
      You seem very confused. the regulators here made the legal requirement It's not like an independent set of experts in charge made it. California made it, and in fact, most experts (in the very same article) seem to think it's "pretty rich". The regulators made the legal requirement, so saying "it's good the regulators are doing this because it's a legal requirement" is super-circular logic when the very same regulators made the legal requirement.
      - arjie 10y ago
        No, you're right. When I first read it I completely misunderstood.
- Lazare 10y ago

dmritard96 10y ago

I am tangentially in this space in that we build tech that allows for demand response capabilities, specifically for mini-split and other air conditioning systems (https://flair.co https://flair.co, shameless plug). This article seems to be missing some important details that are rather relevant in statements of 'capacity' and 'demand'. Specifically, demand is dynamic with energy 'rush hours' at certain times of the day and lows at others. One reason that this is relevant is that often times these companies build 'peaker' plants to handle the rush hour loads that may be present significantly less than 1% of the time. Its not that you neceisarily need to speak to this phenomena but treating demand as a static number leaves a bunch of things unclear. For instance, what is the average over capacity and what is the excess capacity at peak demands. Another thing that was missing to me - electric cars and gas systems. At the moment a decent amount of space heating, water heating and cooking systems require gas but arguably as we begin cleaning our power sources, it will make less sense to use gas and having more electric capacity will make making this sort of decision or switch much easier. Not to mention safer given the massive gas issues in southern california recently... In terms of electric cars - I haven't seen the growth numbers or how much anticipated load there is but it seems like electric cars over the next 10 years may add a nonnegligable load to the grid. This is also complicated as the solar generation capacity and localized storage (power walls and other similar at home batteries) markets are just starting to get interesting. I would love to see a more comprehensive story with numerical predictions about where additional loads and suppliers are headed instead of bickering between industry veterans. It seems like depending upon how those shake out, this excess capacity could prove even more foolish than some are arguing or it may seem forward looking. Interesting article but missing some of the more dynamic and relevant questions so making a more conclusive judgement is limited at best imho.

CaliforniaKarl 10y ago
Completely anecdotal, but among apartment-dwellers, I doubt electric cars will take off as much as one might expect. I live near the Palo Alto-Los Altos-Mountain View border, and I've lived in two apartment buildings, one of which was just built (I was the first to move into my apartment, 12 months ago). My first place had no electric vehicle charging at all, and the second has a total of four spots, which aren't shared. I already have my own electric meter for my apartment, and I'd be perfectly happy to pay for a second meter at my carport, but I don't see that happening soon, and so that makes me wary to buy an electric car.

stevenmays 10y ago

I fully recommend The Grid by Gretchen Bakke. It goes over this subject in great detail. Link: https://smile.amazon.com/Grid-Fraying-Between-Americans-Energy/dp/1608196100/ https://smile.amazon.com/Grid-Fraying-Between-Americans-Ener...

pfarnsworth 10y ago

My dream is solar shingles, like what they advertised late last year, and a Tesla house battery, but my electricity costs are $50/month, maybe $60 if I decided to get lazy and use my heater downstairs in the morning. And this is for a reasonably-sized home in the SF Bay Area. Even if I got AC (I currently don't have it), it still might not be enough to justify solar panels. I think I would have to convert all my gas appliances to electricity, and then it would push me into territory that would justify them.

dx034 10y ago
Solar panels can still make sense, you can sell the excess energy you don't use. The amount you currently spend doesn't really affect how profitable solar panels can be. It's rather a concern if you want to be independent of the grid.

CaliforniaKarl 10y ago

I wonder, if there were more data center capacity in the state, would that help? For example, take Tracy, or some of the land around SR 46 west of Lost Hills: If a cloud provider built facilities there, that would add a fairly constant draw on the state's power supply, with some small flexibility[1]. I wonder if that would be enough to reduce CA electricity prices (as weird as that might sound). [1]: In the case of AWS, imagine if there were a power shortage, they could respond by massively increasing spot prices, causing load shedding, and allowing hardware to shut down.

tn13 10y ago

Californians are paying a lot of money for things they don't need. A high speed train, subsidies for dairy and what not.

tristanj 10y ago

I'm not sure how the author managed to write this article without mentioning that California imports over 33% of its electricity every year. Up from only 25% net imports 6 years ago.

ChuckMcM 10y ago

I would be happy if we could just turn off coal[1] rather than these plants. [1] http://www.energy.ca.gov/renewables/tracking_progress/documents/current_expected_energy_from_coal.pdf http://www.energy.ca.gov/renewables/tracking_progress/docume...

jedberg 10y ago

In 1999, I worked in IT, and one of the graphs we had on our "big board" was a feed from the CA power grid, showing utilization vs peak generation capacity. We had to keep an eye on it because if usage got to close to capacity, the state would start rolling blackouts, which might shut down the server room in our office, so we had to be ready and shut down any non-critical machines so that the rest could shut down after switching to the UPS. It was not a good time. It's also important to remember that these things take a long time to build, so they were still being approved when solar was expensive and server rooms were still expanding. I think it's a good thing that they are over provisioned and anticipating future growth. I would assume that generation will get closer to the demand curve over time as it levels out.

tyre 10y ago
If you're referring to the CA electricity crises of 2000/2001, these were caused by Enron manipulating energy supply.[1] Smartest Men in the Room is a great book about Enron's history. [1]: https://en.wikipedia.org/wiki/California_electricity_crisis https://en.wikipedia.org/wiki/California_electricity_crisis
- jack9 10y ago
  But not the subsequent ones? "the ISO has imposed short rotating outages in 2004, 2005, 2010 and 2015, mostly related to unexpected transmission line or power plant outages during periods of unusually high demand." - Rueters
  - jmanderley 10y ago
    That sounds like an issue of transmission capacity and redundancy, not energy production.
- jedberg 10y ago
  At that time yes, but the point was being too close to peak generation is cause for concern, so having an overhead is a good thing and hard to predict in the timescales it takes to approve and build a power plant.

moo 10y ago

Early 2000s Californians were having rolling blackouts. Was it really bad planning or due to Texas energy crooks Enron?

Animats 10y ago

I wonder about this article. Natural gas plants are mostly fuel cost over their lifetime. It's common to run natural gas plants only during peak periods, and startup and shutdown are straightforward. There's nothing wrong with 47% utilization of a natural gas plant. I'm happy having lots of redundancy in electric power. California has earthquakes, wildfires, and droughts. Keeping the power on through those is worth a little extra cost. Also, think of it as being electric car ready.

stdbrouw 10y ago
The article doesn't address this, but the interactive graphic does: 831 out of 1170 California power plants (71%) are operating at less than 1/3 of capacity.
- Animats 10y ago
  That's about normal. The peaking plants shut down off-peak. Last night's California power demand was about 20GW at minimum. Peak today is about 30GW. The historical peak (Jul 24, 2006, hottest day recorded in California, with 38 heat-related deaths[1]), was 50GW. Generating capacity has to be sized for that peak. [1] http://www.caiso.com/outlook/outlook.html http://www.caiso.com/outlook/outlook.html [2] https://en.wikipedia.org/wiki/2006_North_American_heat_wave https://en.wikipedia.org/wiki/2006_North_American_heat_wave
  - stdbrouw 10y ago
    Initially you mentioned that 47% is fine, now <33% utilization is also fine, okay, but what kind of utilization isn't?
    - Animats 10y ago
      Generating capacity is needed based on the peak, not the average. On the peak hour of the peak day, you'd like to have 15% more nameplate capacity than you're using. Some stations will be out of service for maintenance, and something may fail. PJM training on this: [1] [1] http://www.screencast.com/t/9qPkoGacrnm http://www.screencast.com/t/9qPkoGacrnm

kissickas 10y ago

Excess power in California? Sounds like a good time to build a desalination plant.

matt_wulfeck 10y ago

Excess power is kind of like garage space. If there's any available, we'll usually find some to take. The amount of potential energy from rooftop solar is insane. It's so powerful and cheap that in my home buying selection I'm avoiding homes with obstructed south-facing rooftops. Rather than building plants we should be expanding the "dumb" residential grid to handle many, many more kW of residential solar and fairly subsidize the owners who feed it.

tdb7893 10y ago
Rooftop solar is already oversubsidized by net metering in many places. I would be much more for it if rooftop solar could guarantee capacity (and therefore actually reduce infrastructure costs on the grid) and was paid the wholesale instead of retail costs for electricity but as it is the utility companies are losing money for all the power that goes on the grid and that money is only going to people rich enough to buy dollar panels. I haven't talked to someone recently but last time I checked residential solar was often inefficient compared to commercial solar and a subsidy for the rich
- matt_wulfeck 10y ago
  The issue as you say in the beginning is capacity. Part of the solution is certainly energy storage (and here's tons of innovation happening here, ala tesla batteries etc). The other part is smartening the grid to utilize the most power when it's the most available. I can imagine a desalination plant that cranks during the hottest part of the day when electricity is cheapest, and slumbers during the night. Of course most of these problems are usually issues of economics. When it becomes cheaper to do it then it will happen.
  - tdb7893 10y ago
    The problem right now is that if you look at it economically rooftop solar doesn't make a lot of sense and is mainly being driven by subsidies (which are being paid for by everyone else). My guess is that large scale commercial solar will end up generally more economical than rooftop solar.

deleted 10y ago

[deleted]

Shivetya 10y ago

So basically a regulated public utility used its position to build plants to push independents out of the market all the while knowing the capacity wasn't needed. It was a power play supported by the regulating committee that should have said no. The first step in fixing such issues is to block those companies protected by status of being public utilities from contributing to political campaigns. The issue not covered by the article from what I can see is, how much of this is baseload power and no peak power or variable (renewable)

stdbrouw 10y ago

Not saying the article is perfect, but I'm seeing the same one or two counterarguments presented over and over again in almost identical fashion. Am I paranoid or are we being astroturfed?

davidf18 10y ago

Higher energy prices lead to less electricity use which leads to less greenhouse gas emissions.

nickjarboe 10y ago

Maybe electricity rates in California should be dropped to increase demand. The state has one of the highest electricity rates in the country [1]. [1] http://www.neo.ne.gov/statshtml/204.htm http://www.neo.ne.gov/statshtml/204.htm

moreoutput 10y ago

So Tim Burton's second Batman movie?