‘Pathway to 2050’ Focuses on California’s 2030 Goals, Utility Regulation and Business Models

Posted by Bob Keough on Aug 21, 2015 12:54:00 PM


“We are at another inflection point in California policy,” said Howard Wenger of SunPower Corp., an AEE board member. With legislation pending across the street in the Capitol to raise California’s already high standards for renewable energy and building efficiency, and adding a target of cutting petroleum use in half, all by 2030, what better context could there be for AEE’s third annual “Pathway to 2050” conference? The capacity crowd of nearly 400 gathered in the Sacramento Convention Center got a full sense of that inflection point – and the stakes for industry growth – from key policy makers and business leaders in a full day of dialogue and networking on August 20.

AEE CEO Graham Richard moderated a conversation on achieving carbon goals with California Air Resources Board Chair Mary Nichols and EPA Region 9 Administrator Jared Blumenfeld. In terms of raising California’s climate goals for 2030, as Gov. Jerry Brown has proposed, CARB Chair Nichols said, “Whenever we propose a new standard, we hear it’s going to cost too much, and the economy will suffer. We should be past that. In California, we continue to grow and we outpace others.” When it comes EPA’s Clean Power Plan for the electric power sector, finalized Aug. 3, Blumenfeld said, “This economy is moving in that direction. In many ways, EPA is playing catch-up.”

The day before Pathway, AEE held a press roundtable in support of SB 350, a bill sponsored by Senate President Pro-tempore Kevin de León to enact the goals proposed by Gov. Brown to raise state’s renewable energy standard to 50 percent, double the energy efficiency of buildings over California’s already high standard, and cut the use of petroleum fuels in half. The roundtable, which featured executives from AEE member companies Johnson Controls, Stem, Inc., SunPower Corp., and WaterSmart Software, was covered by the Examiner, though several other news outlets, including Associated Press and two network-affiliate TV stations, were also present. Following the roundtable, representatives of 30 AEE member companies paid visits to key legislators to express support for raising California’s energy and climate goals as a pro-business, pro-jobs measure.

The prospects of this and other advanced energy legislation were discussed by the chairs of the Senate and Assembly committees responsible for energy and utilities, in a panel moderated by Paul Miner of GE. After previous years focused on budget crises, “Energy is this year’s priority,” said Sen. Ben Hueso. “It’s our job to get the policy right, and have the courage to stand up for it.” With a single bill addressing renewable energy, building efficiency, and petroleum, the pending legislation is “groundbreaking and important,” said Assemblymember Anthony Rendon.

A large portion of the afternoon was devoted to the future of the rapidly changing California power grid. Tom Starrs of SunPower presented an overview of Toward a 21st Century Electricity System for California, which was produced by a working group of utility representatives, advanced energy company executives, and California ISO. The remarkable thing about that paper, said Starrs, “is that it exists at all.”

The position paper envisioned a 2030 electricity system in California transformed by changes in technology, consumer preferences, and state policy priorities already under way. To realize that vision, the working group called for a comprehensive framework that integrates or coordinates the several regulatory proceedings now considering those changes one by one, as well as aligning financial incentives for utilities and non-utility power system participants to achieve the outcomes while maintaining long-term viability of the utilities and recognizing the value of the grid.

Those ideas were then discussed by a panel of utility executives, moderated by Lisa Frantzis, who heads up the 21st Century Electricity System initiative for AEE.

“The change in the market we’re seeing in California is profound,” said Ron Nichols, SVP of Regulatory Affairs, Southern California Edison. “Not getting pushed into the water; we’re diving headlong into it.”

Pacific Gas & Electric is connecting a solar PV system “every 11 minutes,” said Elisabeth Brinton, Vice President and Corporate Strategy Officer. Change is under way, she said, but the utility still needs to fulfill its fundamental mission of universal access to reliable, affordable electric service. “As we evolve, as we change, don’t want to lose the core.”

Following that discussion, recently confirmed California Public Utility Commission (CPUC) President Mike Picker and Gridco Systems CEO Naimish Patel talked about the future of the electricity system. “The world is changing faster than most people imagine,” said Picker. “The big question is, do we stop looking at the electric system as providing a commodity, and see it as providing value to the customer?”

In the final conversation of the day, AEE co-founder Tom Steyer interviewed Nancy McFadden, Executive Secretary to Gov. Brown, who chairs the Energy Principals Group. The group brings together the California Energy Commission, CPUC, CAISO, and CARB for coordination, under Gov. Brown’s authority. “It’s too big, too important to the state to have little mini-fiefdoms developing their own versions of climate policy,” she said. But on the Governor’s new 2030, they were all in agreement, she said.

Earlier this year, Advanced Energy Economy Institute hosted a meeting of senior executives from advanced energy companies and California’s investor-owned utilities (IOUs). The California 21st Century Electricity System CEO Forum was an opportunity for energy industry leaders to discuss the drivers of industry change and to start to examine utility business models and regulatory concepts that can adapt to and thrive in the emerging energy market environment

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Topics: State Policy, Event