CEC Commissioner Janea Scott, Sen. Nancy Skinner, and CPUC Commissioner Carla Peterman, on the Pathway to 2050 main stage.
The wildfires raging to the north and west gave the air in Sacramento a pungent haze and added poignancy to the conversations at this year’s Pathway to 2050. AEE’s sixth annual conference on California policy focused as it usually does on the big ticket energy topics of the day: the push toward 100% clean electricity, regionalization of the western power grid, new utility business models, transportation electrification. But in the background – and on the tip of everyone’s tongues – was the now year-round threat presented by California’s parched landscape, a threat now extending to the solvency of one of the state’s investor-owned utilities. Also in the background was another challenge to California: the announced rollback of federal auto standards for emissions and fuel efficiency, and attempted withdrawal of California’s longstanding right to set higher standards, including requirements for zero-emission vehicle sales, for itself and more than a dozen states that follow along. But none of this threw Pathway off track. If anything, the challenges from a warmer, drier climate and from Washington, D.C., gave the conference’s core purpose of economic transformation through advanced energy even more urgency.
The advanced energy industry arrived in Sacramento on Aug. 7, with AEE’s annual lobby day. More than 30 representatives of 26 AEE member companies paid visits to 60 legislative offices, urging action on the organization’s policy priorities and drawing attention to the 542,000 advanced energy workers in California, as documented in AEE’s new jobs fact sheet.
At the evening’s legislative reception, AEE presented “legislative champion” awards to Sen. Scott Wiener and Assemblymember Phil Ting. Sen. Wiener is the author of AEE-supported SB 700, a bill that would extend incentives for customer-sited energy storage. Wiener has also expressed his support for advanced energy technologies in critical legislative deliberations this year. Assemblymember Ting has worked closely with AEE and its members for over two years on legislation to promote zero-emission vehicles. Ting is the author of AEE-sponsored AB 2127, which would enable better planning for charging infrastructure build-out statewide and across all vehicle classes.
At Pathway itself, the conversation quickly turned toward regionalization of the power grid. “The western grid in America is going to change dramatically in the next 20 to 25 years,” said former Colorado governor Bill Ritter, Jr., adding that utilities and state regulators “will have to think about the [coming] merger” of electric power, the built environment, and transportation. Former FERC chairman Norman Bay claimed that a regional grid in the west was inevitable, because the economic forces are so strong. “It’s a question of when, not if,” he said. Montana PSC commissioner Travis Kavulla agreed: “Status quo is not an option; it’s not a realistic alternative.”
The regionalization discussion continued on the next panel, with a focus on the benefits already being delivered by the Energy Imbalance Market (EIM). Panelists Valerie Fong of the EIM governing body and Jennifer Gardner of Western Resource Advocates noted the cost savings and renewable energy sharing that the EIM has made possible.
Pathway’s panel of media commentators began with an assessment of Gov. Brown’s energy and climate legacy. Asked to pick one item that would live on once Brown leaves office, John Myers of the Los Angeles Times offered the state’s Cap and Trade system, especially removing a legal cloud and extending it to 2030. Dan Morain of CALmatters cited high-speed rail, adding that it was unclear whether that would be “a boon or boondoggle.” Katie Fehrenbacher of GreenBiz noted Brown’s stepping into the void as an international climate leader, while Greentech Media’s Emma Foehringer Merchant pointed to California’s vehicle standards, and the coming battle over them.
The regionalization theme was picked up again in the “Brave New Grid” panel, with a few cautionary notes sounded along with the benefits. “We would want to see a governance structure that protects the interests of Californians,” said Elizabeth Echols, director of the Office of Ratepayer Advocates, referencing the potential loss of California’s influence in a multi-state arrangement, compared with today’s California-only ISO.
It was also in this panel that the wildfires, and the threat they pose – not only to people and property but to California’s electric utilities – got the most attention. “We are in Sacramento surrounded by smoke, and we’re not even in the height of wildfire season,” said Steve Malnight, senior vice president of strategy and policy for PG&E, which is facing huge costs under California’s unusual strict-liability standard for any role in wildfires, raising the specter of bankruptcy for the utility. (Malnight’s comments were also covered by Greentech Media.) “We are going to need billions invested in California” to build the grid of the future, he said. “It should make us nervous that investors are saying utilities are untouchable.”
Charging infrastructure is another area where investment will be needed, and where that financing will come from was the subject of another panel. “We are at a point where an inflection may take place” in terms of EV sales and charging infrastructure,” said Salim Morsy of Bloomberg New Energy Finance. But private charging networks are not profitable, he said, but rather the result of “strategic investing” – “We’ll take the loss, we’ll get the best real estate, we’ll get the customer relationship.”
“Right now, we don’t know: Which is it – if we build it, they will come, or if they come, it will be built,” said Holmes Hummel, of Clean Energy Works. The best business case for vehicle electrification is in transit buses. “If we can’t solve that,” the rest of the financing challenge will be more difficult. Morsy noted an innovation by AEE member company Proterra, “treating the battery as operating expense, like fuel, taking it off the upfront price and meeting procurement rules” for transit authorities.
EV infrastructure was also a focus of the closing panel, on unfinished business for the next administration. “I’m concerned about having infrastructure keep pace with the number of vehicles that are out there,” said Commissioner Janea Scott of the California Energy Commission. “How do we get scale, not just ‘onesies and twosies’?”
Sen. Nancy Skinner noted the need for “electrification of everything,” buildings as well as vehicles. But for vehicles, she saw fleets as key. “Who buys cars frequently? Fleet owners.” Fleet use of EVs “also gives the rest of us more experience with cars that we might have questions about. We’ll be more likely to buy them ourselves.”
On all the issues addressed in the course of the day, CPUC Commissioner Carla Peterman summed up the challenge ahead: “We have to finish. It’s important for the next administration to stay the course.”