Ratepayers face unknown costs for renewable power

January 3, 2016 - Modesto Bee (CA)

Electricity providers have a new <California> state mandate -- get at least half of their power from renewable sources by 2030 -- but they do not yet know the cost to customers.

Wind, solar and other sources will come into play as utilities carry out Senate Bill 350 in the Northern San Joaquin Valley and beyond. The measure, signed by Gov. Jerry Brown in October, builds on a previous mandate of 33 percent renewables by 2020.

The Modesto and Turlock irrigation districts already get about 25 percent of their power from renewables, thanks mainly to wind turbines in the Pacific Northwest. Pacific Gas and Electric Co. is around that figure for its much larger service area, including the central Sierra Nevada and parts of the north Valley outside the districts.

The cost will depend on the going prices for renewable power, which generally have been higher than conventional sources such as natural gas and hydroelectric. Planners also have to figure in the growth in overall demand, including the possibility that many cars will run on electricity rather than gasoline as part of the same planet-saving campaign.

"We do know that it's likely to cost our ratepayers," said Brian LaFollette, assistant general manager for power supply at TID.

Backers say the law will reduce the carbon emissions from coal and petroleum that are contributing to global climate change. They see it as a worthwhile cost to ratepayers if it blunts heat waves, sea-level rises, habitat losses and other effects.

We're still crunching the numbers, but we certainly know that the new goal and other factors could impact customer rates.

Lynsey Paulo, PG&E

The law counts small hydroelectric plants as renewable, but not big generators such as Don Pedro Reservoir, owned by MID and TID. It also does not include the nuclear portion of PG&E's supply. Neither source emits carbon, but lawmakers were swayed by people who dislike them for other environmental reasons.

MID is on track to meet the 33 percent goal by 2020 but will need other sources to hit the new standard a decade later, spokeswoman Melissa Williams said.

"Although the magnitude is unknown at this time, increased renewables are likely to have some impact on rates since the cost of renewables is still higher than that of other power sources," she said.

Renewable advocates note that wind and solar have no fuel costs, meaning long-term savings for ratepayers. Utilities counter that they need conventional supplies as backups for the times when the breezes do not blow or the sun does not shine. They are also looking into batteries and other technologies for storing renewable power for use during high demand.

LaFollette said TID will meet the 33 percent goal in 2017 with power purchased from a large solar plant under construction in Kern County. It already has solar, geothermal and small hydro to go along with the wind turbines it owns in the Columbia River Gorge.

The district will likely have to add new sources starting in 2021 or 2022, he said. It also faces a 2029 renewal of the land lease for the wind turbines.

LaFollette noted that the costs incurred to meet the 33 percent mandate have been blunted by the drop in prices for natural gas, the main fuel for power plants.

The new law maintains the 33 percent target for 2020 and adds steps of 40 percent renewables by 2024, 45 percent by 2027 and 50 percent by 2030.

PG&E was at 27 percent renewable at the end of last year and expects to be at about 30 percent once the 2015 numbers are all in, said Lynsey Paulo, corporate relations manager. It has solar, wind, geothermal, biomass and small hydro, with no source dominating.

Paulo said the costs to ratepayers for reaching 50 percent will have to include new transmission lines and backup sources.

"We're still crunching the numbers, but we certainly know that the new goal and other factors could impact customer rates," she said.

John Holland: 209-578-2385

RENEWABLES SO FAR

Renewable share of power supply at start of 2015:

Turlock Irrigation District: 24 percent, mostly from wind and also solar, geothermal and small hydroelectric (large hydro does not count)

Modesto Irrigation District: 26 percent, mostly from wind and also solar

Pacific Gas and Electric Co.: 27 percent, including solar, wind, biomass, geothermal and small hydro

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