CA Energy Commission Chair Weisenmiller on CEC's New Priorities

How did it happen that distributed energy became such an important priority for the California Energy Commission?

Governor Brown put it as one of his priorities. Last year, we had a very major push on utility scale. We licensed nine major solar projects for over four gigawatts. They are very important in terms of providing jobs, investment, and some impact on greenhouse gases. One project was in Blythe, where they have about a 20 to 30 percent official unemployment rate, but who knows what the real unemployment rate is in the Blythe area. So, it gives people some hope, by using tax credits and trying to quickly move the needle.

At the same time, we have the California Solar Initiative program, with over 90,000 systems installed. The bulk of these are on people's homes, which means that these are people who own houses, so they are probably higher-income folks. There are programs now where you can get the systems installed and set up a leasing arrangement. Historically, you were writing a check for, say, $30,000 to get a system installed. There aren't many Californians who can do that.

We need to reach out and get much broader coverage. One way to do that is by distributed generation (DG) and trying to put that in the communities and use it to provide a basis for economic development and jobs. It's time to look at that option. The thing that we don't know is how difficult the permitting process will be.

We know how hard it is to permit one 1,000-megawatt project. But in terms of permitting 1,000 1-megawatt projects, we don't know how much effort it will take. We obviously avoid the transmission issues because we are down into the distribution system.

How does California incent 12,000 megawatts of distributed power-12 times the current amount of DG? What is CEC's game plan?

The game plan is to drive down costs. We have to drive down not just the cost of installation, but to make it very simple on the permitting side, on the interconnection, and to standardize a lot of things. If we have to do the 1,000 1-megawatt projects, each customized, and if we have 1,000 totally different permitting systems in a thousand different cities, ultimately we will find that they're not as hard as one 1,000 mw installation. But even if they are a fraction of the difficulty, if you're doing 1,000 installations, difficulty can add up pretty quickly. We have to standardize things as much as we can to achieve that economy of scale.

VERDEXCHANGE hosted in June a clean and green marketmaker's conference in Toronto. The province of Ontario has a green energy act that includes an aggressive feed-in tariff, which has successfully encouraged both solar generation and job creating foreign direct investment. Does the California Energy Commission embrace feed-in tariffs as a means for producing 12,000 megawatts of locally generated distributed solar power?

The Energy Commission has long been a proponent of feed-in tariffs because it simplifies things. In the first Brown administration, we were trying to push what ultimately became qualified facilities (QF). When we started, the utilities would do a one-on-one negotiation with every co-gen project, and try to figure out how to get a contract somewhere between the cost of the co-gen project and the value to the utility. They had negotiations for years. If you were the co-gen project, the utility was the only one you could negotiate with. The incentives were not for the utilities to make these things successful. Once we had standard offers, we voided a cost, and suddenly that set the game. We really moved the needle quite a bit on getting QFs in California. By the time you negotiate the contract, get your permit, get financing, and get it built, it can take five years or more. Still, thousands of megawatts came online at that period of time. California hit a level of renewable power that frankly only today are we getting back to comparable levels. So, again you need that metaphor of standardization for DG to make it possible. The feed-in tariff says, "Here's the price." Take it or leave it. If you look at Germany or Spain you see that if you set the price too high, you get too much. If you set it too low, you don't get anything. Similarly, we found in the QF days that ideally you'd like to have something that says "first thousand megawatts, here's the price. Second thousand, here's another price." You need something that reflects the fact that you don't need to buy 12,000 megawatts at the same price.

Ontario's Green Energy Act, when enacted in 2009, promised both job creation and a reduction of GHG. Ontario has had $7 billion in investment in renewables and the creation of 50,000 jobs. It is noteworthy that Ontario always intended to ratchet down the feed-in tariff (FiT) cost over time, like you suggested. Why hasn't California adopted a feed-in tariff tied to job creation? What's the breakdown there?

It's how you frame it. The PUC looks at everything very much from the perspective of economic impact. Certainly the CAISO looks at everything from a reliability perspective, and I look at things more from a land use and planning perspective. It's like the metaphor with the elephant and the five blind men-everyone approaching a different part of it.

Because of what has happened in Spain, the PUC is very concerned about eventually deciding that they paid way too much under the FiT. They are pretty cautious and taking small steps. Obviously, some of us who would like to see them be a little more adventuresome with the FiT. I also understand that when you're the one opening the pocketbook, you have a responsibility to make sure you're doing it in a prudent fashion.

Picking up on the elephant metaphor, the governor was very frank today at his conference on local renewable energy, talking about executive leadership and coordination between agencies to get the job done. How does that mandate come through to the CEC and to your role as chair to coordinate with CARB and PUC?

This is an era of limits, budget-wise. We barely have the resources to do our core missions. The notion that somehow we fritter resources away, doing things that other agencies are doing is just not acceptable. It's certainly not acceptable to the governor, and it's certainly not acceptable to me. We need to find ways to complement each other and to work together on things.

The California Clean Energy Future document, which was created by Mary Nichols and Yakout Mansour a couple of years ago, lays out the existing programs. It looks at the actions the agencies are taking, looks at the interactions across those agencies, and comes up with some real milestones and metrics we can use to hold our agencies responsible. These metrics make it much easier for us to report out to the public on the success or failure of some of these programs. Where we're finding that we're not hitting our targets, it will force us to see how we can do better and better coordinate among agencies.

What should be the indices of a successful program? What should our readers pay attention to?

We're trying to produce public metrics on the success of our programs. We now have nine or ten. We had a workshop where people suggested some changes to them. These metrics are: What is the percentage of renewables in California? How many gigawatt hours are being generated in California from renewables? What's our load growth? Can we point to energy efficiency measures to drive the consumption down? What's the reliability of the system?

Fundamentally, as a regulator, safety and reliability are critical. In public meetings, a lot of people asked about some of the public health indices. Can we point to how the renewables are not only reducing greenhouse gas emissions but are also providing safer energy? Can we point to savings in public health by reducing pollutants?

Those are the sorts of questions where people want to have something that they can look at to measure how well the state's Energy Commission, CAISO, PUC, and the Air Resources Board are meeting our goals. The metrics that we're trying to produce will be on the website, and people will be able to look at them and have a way of measuring our progress against the plan.

The Energy Commission has strongly underwritten research. What's currently being studied? What can the public expect being published as a result of CEC funding?

One of the most difficult issues the Energy Commission is facing this year is the "public good charge" is up for reauthorization by the state legislature. The Public Interest Energy Research program is funded by that charge. We have to get it reauthorized by the end of the year. That's part of it, but there is some energy efficiency money and some renewable money in the PGC as well.

Innovation drives our economy, and will certainly drive our change. That innovation will come from R&D. We've had very successful R&D programs. I like to use the example of syncrophasers.

We worked with the federal government to take that technology from an engineering concept to a usable technology being tested in the ISO control room. We've demonstrated its value. It's like taking an MRI of the transmission system, allowing you to see what's working and the disturbances. As we roll out more renewables, that is incredibly critical.

Ultimately, we had demonstrated it well enough that when the ARRA program came out, the feds put up hundreds of millions of dollars to start installing it throughout the grid. That program, by giving us more reliable power and allowing us to use more renewables, is phenomenally beneficial to California.

We're putting a lot of money into researching energy storage. We're putting a lot of money into forecasting for the CAISO as we deal with the variability of wind and solar production. The better they can forecast, the easier integrating more renewables into the power supply will be.

We're looking into different ways of monitoring solar installation or wind variability, different ways of developing computer models that can built into the dispatch system, and different ways to prepare that system and give it the tools it will need to deal with the hourly or daily variations of wind production.

As Steve Berberich mentioned earlier today, this spring, California had a maximum capacity of 2,400 megawatts of wind power. That figure dropped by 800 megawatts in one half-hour period. Somehow we need to give them the tools to make that work, and that's very much a research subject we've been working with the ISO about.

Another example of research is a study we did with the CAISO, where we looked at the distribution system in Europe compared to California. There are much greater levels of DG in the German system. We tried to understand the implications of what they've done to mitigate the impacts associated with DG, as well as learning how best to implement such a system in California.

There is certainly a lot of research being done on energy efficiency technologies. We're really trying to push the envelope. We're doing a lot with renewables, as well as microgrids. What if you have a community where you combine different types of solar, wind, fossil fuel, fuel cell, and co-gen, and have that part of the grid be able to isolate and run independently of the rest of the grid? There's a whole new world out there, and we're doing research to try to prepare ourselves for that new world.

Web Exclusive

There has been discussion of the CEC taking on oversight responsibility for the public municipal utilities in the way that the PUC does the ISOs? That's a pretty big responsibility. How is it being undertaken by the CEC?

We have to be pretty careful about that. If you compare the IOUs to the munis, if you are PG&E, for example, your responsibility is to your shareholders. As part of that you have an obligation to your customers. But again, you have a fiduciary duty to maximize the shareholder's value. If you're a muni, there is an element of local control. You're dealing with your city council, and they are setting your priorities. Those priorities still have to be within the framework set by the state. When we're looking at programs like the Energy Efficiency Program, it's one thing if you're PG&E, with 18,000 employees spending hundreds of millions of dollars a year on energy efficiency and trying to cover their whole service territory, and something else when you've got a very small municipal utility that only really has a handful of people in the conservation area. The small municipal utility's customer types could be just a very small subset of PG&E. Somehow we have to make sure that our programs don't require them to invest an unreasonable amount of resources on paperwork or tracking. We want to allow them to maximize their efficiency for their customers and to tailor their program to their customer's needs, while at the same time trying to put some broad context on the state's programs. Those programs would include things like what they are doing with renewables, and what they are doing with energy efficiency.

Some stakeholders in L.A. are saying that the most distrusted public utility in the country is the L.A. DWP, so wouldn't it be great to have a higher authority here moving them along with the state? Is there a way of tiering this to utilities of a certain size so that they measure up to a greater extent to the state standards?

The most recent RPS legislation pulled the munis into that much more strongly than they have been before. We're now trying to figure out how to implement that in terms of the Energy Commission and CARB's responsibilities. One of the other proposals down there is to have some sort of ratepayer advocate. A ratepayer advocate is much more on the ground and more local, which is something that maybe we can complement. The Energy Commission could never replace that function.

This is the first year of your term as CEC chair, and this is the first year of the current Governor Brown administration. Going forward, what should our readers expect regarding progress toward CEC's many goals and initiatives?

One of the things that we're doing is cleaning up a backlog at the Energy Commission. It's a different administration. We're at a stage where, historically, the relationship between the Schwarzenegger administration and the Legislature was very bad, and the Energy Commission was certainly part of that administration. It's a new administration, and one of my goals is to reset the relationship with the legislature into much more of a partnership. This governor certainly has a much better working relationship with the Legislature than his predecessor did. There are still tensions between the Executive Branch and the Legislative Branch. But, there is much more of a working relationship now between the Governor's office and the Legislature. I'm trying to get the Energy Commission and the Legislature on a more similar footing.

Finally, what might Assemblymember Nancy Skinner expect from CEC by next year?

Basically to go through and look at our energy efficiency programs, and make sure I've had a chance to go through those from top to bottom and that I am comfortable that they are meeting both of our goals. For the agency, it's time to go back, take stock, see what's working and what's not working, and see where we can do better.