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RSS FeedGridiron Shouldn't Leave California in the Dark
by Worldwatch Institute on March 9, 2001
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Comment by Seth Dunn, Worldwatch Institute on the California energy crisis In light of the state's struggle to keep the lights on, California power officials have encouraged "group viewing" of the Super Bowl this weekend. While forced camaraderie may temporarily ease demand, in terms of real energy solutions such symbolic conservation gestures are like kicking a field goal when you have first down and goal from the three-yard-line. In the short run, Cal's energy team needs to put some new power generators into play. But in the long term, California could get more economic, political, and environmental points on the board by also encouraging energy efficiency-providing more energy services from fewer megawatts. California has made notable progress over the past two decades in improving the efficiency of its power plants, buildings, and appliances. To date, the state's return on energy efficiency and renewable energy investments totals 15,000 megawatts that conventional power plants need not supply. But in the past decade, the uncertainties of deregulation have caused utilities in California to curtail their investments in energy efficiency and the addition of new generating capacity. Since 1990, electricity consumption in California has grown by 15 percent, while generation has grown by only 9 percent. Add the digital economy's need for ultra-reliable power, lower hydroelectricity production, an aging grid, soaring natural gas prices, and possible market power abuses by wholesalers, and you have excellent conditions for a power crisis. One way to tackle the crisis is to design laws and policies focused specifically on enhancing energy efficiency. These will stimulate technological innovation within industry and spur the adoption of the higher energy-efficiency equipment that already exists. This, in turn, will reduce power usage by consumers, helping to cushion them somewhat against an oncoming blow of higher electricity prices-the anticipated result of regulators' recent decision to allow utilities to pass along the rising costs they are experiencing in the wholesale market. Ralph Cavanagh, with the Natural Resources Defense Council in San Francisco, argues that, "For those angered by rising fuel prices, the best revenge is still needing and using less." State policymakers have belatedly refocused on efficiency over the past year. In April 2000, the California Energy Commission recommended that the Governor and Legislature encourage energy efficiency investment as a "technically feasible method to ensure a sufficient supply of electricity," particularly for reducing the strain on transmission lines during peak hours on hot summer afternoons, when air conditioners and lights are running full throttle. In December, the Commission issued emergency upgrades of efficiency standards for new buildings and equipment. In his State of the State address earlier this month, Governor Davis proposed a $250 million program that would provide cash incentives for upgrading efficient appliances and buildings, with the goal of cutting energy consumption by 8 percent. Efficiency improvements can also complement the development of cleaner, more reliable electricity sources. Lower power demand helps avoid reliance on dirty standby sources such as diesel generators-the current backup choice in Silicon Valley. Greater efficiency will also buy time for bringing advanced micropower systems-fuel cells, microturbines, solar cells, and wind turbines-online. As high-tech businesses increasingly adopt these onsite systems and become their own energy producers, their incentive to save energy grows accordingly. California officials should work closely with the high-tech community to implement an appropriate combination of energy efficiency and micropower measures. At the other end of the economic spectrum, low-income citizens will be hit hard by the ongoing crisis and deserve special attention in new energy efficiency initiatives. For these people, the advent of higher electricity bills spells not inconvenience but the risk of losing critical services. While California does provide some low-income assistance and discounts through a small surcharge on consumer bills, additional resources are urgently needed if people are to be kept out of the dark. The Golden State has thus become a cautionary tale for the unintended consequences of deregulating the electricity industry. One lesson for other states to draw is that deregulation, by focusing utilities on near term cost-cutting measures, can tempt them to scale back investments, such as energy efficiency, whose payback is significant but not immediate. There is a clear government role to play in preserving the benefits of a more advanced and efficient power system-benefits which the electricity market, competitive or regulated, does not fully reflect but which are now becoming painfully evident. California, once a pioneer in promoting energy efficiency, now needs to reblaze this trail. The problems of the world's sixth-largest economy are also a national problem. President Bush's claim to bipartisanship, and his goal of an effective energy policy, will be tested by his ability to pass a national restructuring bill that encourages states to promote energy efficiency. If not, the state's, and country's, problems will be far more consequential than forcing Giants and Ravens fans to watch the Super Bowl together. Seth Dunn is a Research Associate with Worldwatch Institute, an environmental policy think tank based in Washington, DC. He is the author of Micropower: The Next Electrical Era and co-author of State of the World 2001: Decarbonizing the Energy Economy. For more information on Worldwatch, visit the Institute's website at: http://www.worldwatch.org Copyright Worldwatch Institute 2001 REPRODUCTION INFORMATION Worldwatch opinion articles are available for reproduction with credit given to the author and Worldwatch. If you do reproduce one of our articles, we'd love to hear about it. Please send an email to: lmitchell@worldwatch.org FOR FURTHER COMMENT OR MORE INFORMATION, CONTACT Seth Dunn, Research Associate. Email: sdunn@worldwatch.org
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