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Little Light at End of Tunnel on San Diego County’s Electric Issues

San Diego’s energy industry continues to face some major challenges as it heads into 2005 , rising demands, volatile supplies, an ongoing search for reliable renewable energy to ease the reliance on fossil fuels, and a transmission system that is woefully inadequate, say energy insiders.

“There has to be a serious focus on improving our transmission capability,” said Mitch Mitchell, vice president of public policy and communications for the San Diego Regional Chamber of Commerce, naming that as his first energy priority.

“Second, would be the diversification of our renewables,” he added, “but, first and foremost, we must improve transmission to send power in and out. That’s where it all starts.”

Mitchell is still brooding over the rejection by the California Public Utilities Commission of the Valley Rainbow Interconnect project in December 2002.

A 31-mile, 500-kilovolt transmission line, it would have connected Southern California Edison’s existing Valley substation near Romoland in Riverside County with a new San Diego Gas & Electric Co. substation near Rainbow off Interstate 15 in North County. The project would have delivered enough power to serve the electricity needs of more than 700,000 single-family homes, according to SDG & E.;

“It is imperative that SDG & E;, as part of its resource plan, look at what the next transmission project is going to be and get everyone on board and go back to the PUC,” Mitchell said. “We still have a crisis, even if energy is not on the front page of the paper every day. Valley Rainbow would have meant huge progress, and now we have to start from scratch.”

Stephanie Donovan, a communications manager for SDG & E; and Southern California Gas Co., agreed.

“The PUC was using a very limited time frame for reliability and need,” she said. “We believe it was shortsighted. They didn’t think we had made our case adequately. We believe the line was needed. The current situation bears this out. Had we gotten started when we wanted, we wouldn’t be having this conversation. We need a broader, long-range planning window for transmission.”

But since the Rainbow decision, Donovan said, “There have been tremendous constraints on land, on the ability to build something like this. It will require a concerted effort of the community.”

In the meantime, she said, SDG & E; is doing its “due diligence” and what it can to keep the power flowing , especially in light of dire predictions that the utility faces a possible shortfall by the summer of 2005.


Progress Report

There have been some bright spots: On Nov. 9, SDG & E; energized a new 500-kilovolt switchyard and transformer at its Miguel substation in Bonita, improving the reliability of the utility’s energy-delivery system and, according to SDG & E; officials, reducing costs to its customers by $18 million a year.

“It’s like opening another lane of traffic,” said Donovan, explaining that, in this case, it means moving an additional 400 megawatts through the area.”

Good news came from the PUC on Dec. 16, when it approved the speed up of a second transmission line to the substation in Mission Valley. Originally scheduled to go into service in June 2006, it could now be ready by September 2005 , a schedule change that could save ratepayers about $8 million to $13 million, said Donovan.

“Customers are picking up the costs because of this congestion,” she said. “As long as we have congested lines, our options are limited. We have to pay for whatever we can get within our service territory.”

But even these fixes do not provide a panacea, she said.

“We are still going to need additional transmission,” Donovan said. “We have already set this out in our long-term resource plan. We need another 500-kilovolt line to provide us with renewable energy resources to meet our 20 percent target by 2010.

“This is a regional and statewide issue, a driver for our economy,” she added.

But, said Donovan, the utility must contend with the NIMBY factor , Not In My Back Yard.

“Even if people say we need another power plant or transmission line, it’s the NIMBY thing,” she said.

Looking at the big picture, Donovan believes that the creation of utility corridors is needed, “not just for transmission, but for other utilities , water, gas, cable. As land starts to get built up or protected, we will need a joint concerted effort to find the right place to put these things.”

Donovan said that she is encouraged , to a point , by such efforts as the commissioning of a major power line by Gov. Arnold Schwarzegger on Dec. 14.

The $250 million Path 15, the state’s newest transmission line, stretches 84 miles and was built by a public/private partnership between federal and state government agencies, the Western Power Administration, Pacific Gas and Electric Co. and Trans-Elect.

Path 15 is the third 500 kilovolt transmission line in California designed to relieve the energy bottleneck between Southern and Northern California. This, and other upgrades, is expected to save Californians about $100 million a year in energy costs in so-called normal years, and $300 million during dry years, according to the governor’s office.

“This is a major step in the right direction,” said Donovan, “but more is needed to have more connections to the north and to the east to avoid future power gridlock and ensure that electricity can get where it’s needed during peak times.”

Schwarzenegger also issued an executive order on that day, encouraging energy efficiency in state buildings, and urged Californians to continue energy conservation efforts.


Business Opportunities

Using energy more efficiently is also among the goals of the San Diego Regional Energy Office, an independent nonprofit corporation that provides information, research, analysis and long-term planning on energy issues. The group currently manages more than $30 million in public funds through a variety of rebate, incentive and education programs.

“Our role is really to create a more sustainable future for the region,” said Irene M. Stillings, the Regional Energy Office’s executive director.

And, she said, San Diego business has much to gain from becoming more energy efficient.

“There are tremendous opportunities for businesses to make their facilities much more energy efficient,” she said. “We do run some programs in energy efficiency and self-generation in the business community, but we haven’t even scratched the surface in the potential there.”

Some $100 million comes into the region to fund energy efficiency programs, paid by utility ratepayers, and managed by the PUC, said Stillings.

“We believe there is a lot of money available to the business consumer,” she said. “But it’s hard to get their attention. It takes money to save money, and there always is the issue of capital costs.”

For building owners, there is “a classic dilemma” in becoming more energy efficient, said Scott Anders, the Regional Energy Office’s director of policy and planning.

“Everyone in the industry is looking for answers,” he said. “It’s a perennial problem, a split incentive. The landlord doesn’t pay the electric bill, so he has no incentives to do anything, while the tenant doesn’t own the building, but wants to do it.”

As this issue moves forward, said Anders, “There is the opportunity for business to come to the table. It’s another opportunity for 2005.”


Sunny Solutions

Meanwhile, the Regional Energy Office , armed with a $50,000 grant from the Department of Energy , has been working with the city of San Diego to identify commercial buildings with solar-friendly rooftops.

The city has been busy shooting satellite photos of commercial buildings measuring 3,000 square feet or above. This information will be used by the Regional Energy Office for an outreach campaign early next year to owners of buildings with high solar-power potential , that is, a big flat roof, a lot of sun, and otherwise unencumbered by other hardware.

“In other places in the country, you’d have to screen out some buildings for shading,” said Anders, “but we really don’t have that problem. If you have a flat roof with no obstructions, you are a good candidate.”

With the city’s survey almost completed, Anders said his office could start contacting building owners sometime in January.

“We’ll explain to them that rebates are available, and ask them if they want more information, if they want to attend one of our workshops, or have us do an audit for their building,” he said.

Anders figures that about 75 percent of the commercial buildings within the city limits were surveyed, but that number will be honed down.

“We’ll use that to get an estimate of the total potential,” Anders said, “but we may only do owner-occupied buildings. We won’t waste our time on a rental-leased unit, because of those ‘split incentives.'”

The owner-occupied buildings would be most likely to respond, he said, because they would reap the benefits of the solar system.

“But if they’re leasing, there is no connection,” he said. “The renters pay the electric bill. It’s a real dilemma. There are a lot of leased buildings out there.”

While many renters can and do adopt their own energy-saving strategies, Anders said that it’s harder for those in commercial buildings.

“A lot of times, savings focus on lighting or heating, ventilation and air conditioning, the mechanical systems of the building,” he said. “Renters won’t do anything to change those.”

But, initially, Anders said his office probably will end up casting a wide net to gauge the interest of owners and renters, just in case.


Binational Business

The Regional Energy Office also is working with SDG & E;, San Diego State University, the San Diego Association of Governments, energy consultants from Mexico and Imperial County, and such businesses as Qualcomm Inc. to study the potential for renewable energy in the region. Anders said he expects a report to be issued during the first quarter of 2005 , information, he said, that should interest businesses and investors.

“We think that this will be useful for renewable developers,” said Anders, adding that they will be able to determine, from the data, the best areas for such options as wind and solar power.

The hope, said Anders, is that the California Energy Commission will incorporate this data into its 2005 energy report.

Why is Mexico included?

“Wind and geothermal straddles the border,” Anders said.

Stillings agrees, believing that binational cooperation is crucial for solving the region’s energy concerns.

“Efforts don’t stop at the border,” she said. “Water and air issues go back and forth. How do we get together to work together? You’re likely to see a lot of interest in this.”

One example of binational cooperation is the new solar product assembly facility that Kyocera Solar, Inc., opened Dec. 10 at the Tijuana Industrial Park.

The facility manufactures solar photovoltaic modules , rectangular, roof-mountable panels that convert sunlight into renewable electricity. The company is targeting California’s fast-growing market for commercial and residential solar photovoltaic systems.

“Kyocera is the closest we’ve been able to get a manufacturing plant of PV,” Stillings said. “We’d like to make San Diego the PV capital of the world. Now it’s Japan. Our objective is to bring more manufacturing and jobs to San Diego. We foresee a future when there is a binational zone on the border , where we are working together, traveling in and out with ease.”

Stillings said she is excited about the potential for solar in San Diego.

“All those jobs are now going to Japan,” she said. “If they can do it, why can’t we do it?

“Raising awareness for the business owner is absolutely crucial,” she said. “There are coming energy shocks. There is the possibility we could have more rolling blackouts next year and the year after, if we get particularly hot weather. We need to work together , the whole community , to make sure that doesn’t happen.”

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