The California Public Utilities Commission should authorize $30 million for the Pacific Gas and Electric Company to create an Emerging Renewable Resource Program, or ERRP, over the next two years, an administrative law judge ruled on April 29.
On a green power project list that includes technologies ranging from solar to biomethane, the most controversial project and the only one not fully funded in the ruling was PG&E”s WaveConnect Project off Fort Bragg and Eureka.
Wave Connect can get the $2 million needed for the first year, not the $6 million total requested, under the ruling. Judge Bruce DeBerry ruled that further review and monitoring are needed to ensure WaveConnect funds are truly part of a viable effort to develop a workable technology.
“We will conditionally authorize PG&E to begin the WaveConnect project as part of its ERRP,” the judge wrote for the CPUC in the draft ruling.
“However we are less certain about the WaveConnect project as proposed over the many years outlined in the application and WaveConnect information provided in PG&E”s Response. We desire to allow PG&E to move forward with the tasks to complete the goals and milestones in year one, including steps necessary to file the Pre-Application Document by March 2009, which is the next milestone in the FERC [Federal Energy Regulatory Commission] licensing process.”
The CPUC allowed the judge to decide the detailed points of law related to the ERRP and is expected to follow his advice. But the ruling does not become binding until the commission acts on it and changes could be made.
Fort Bragg City Councilman Dan Gjerde says now may be the time for the city to gain an official role in the wave energy study off its shores.
The city is investigating whether to file a request that PG&E”s findings in its WaveConnect study be submitted to those with a stake in the process, he said. The idea stems from a suggestion by John Innes of the FISH committee (Fishermen Interested in Safe Hydrokinetics), Gjerde said.
Innes recommended that consultants doing the studying report to local stakeholders, not just the utility, ensuring a broader loyalty.
The actual preliminary permit granted to PG&E proposes the test in the ocean of a 5 megawatt prototype, with rival technology developers getting to try up to three different technologies, PG&E told Fort Bragg crowds when the permit was filed with the Federal Energy Regulatory Commission.
With vociferous local opposition to the FERC process and challenges to WaveConnect before the CPUC by both the Ratepayer Advocate and the Independent Energy Producers, the project became more academic.
“PG&E notes the immediate aim of WaveConnect is not to develop a commercial generating facility to compete against other project developers, but to evaluate the feasibility of extracting energy from ocean waves,” the ruling states.
The plan to test devices in the ocean during the three-year permit period has now been ruled out publicly by Bill Toman of PG&E, apparently due to the forceful entry of the California State Lands Commission into the process.
The Lands Commission staff was baffled that PG&E applied only to FERC in February 2007. When a permit was issued a year later, State Lands took charge of the CEQA process and said it would likely take up much of the three years. The utility has indicated it intends to comply with the CEQA (California Environmental Quality Act) process.
The CPUC has been impressed by the potential of wave energy, if not all of the process under way.
PG&E states that wave energy has tremendous potential as a renewable energy source since California has over 750 miles of coastline, or over 37,000 megawatts of potential, of which an upper limit of about 20 percent could be converted into electricity, the judge wrote.
PG&E estimates that an average 7,460 megawatts might be expected to generate up to 65 terawatt hours (TWh) per year from California”s ocean waves. California”s 2005 total energy generated was 288 terawatt. Thus, wave energy could potentially provide 23 percent of California”s current electricity consumption, the judge wrote.
“It should be noted, however, that this estimate is an upper limit, since environment impacts, land-use, and grid interconnection constraints will likely impose limits on development,” the judge wrote.
The potential still makes it essential that PG&E be allowed to study wave energy, despite the objections.
“As proposed by PG&E, the commercial development of wave energy is not an immediate goal but rather a lengthy study necessary to prove or disprove the potential for wave energy from various WEC devices. On that basis we believe it important to begin expanding our knowledge and understanding of whether wave energy is a reasonable means for achieving these goals now rather than waiting to see how this market may develop,” the judge wrote for CPUC.
The wave potential along the 600 miles of Pacific Ocean coastline in PG&E”s service territory is also very good, and has a higher wave energy climate than farther south, the judge wrote.
An official party in the CPUC matter, the Independent Energy Producers, did not object to ratepayer funding of PG&E”s other experimental studies such as a new solar center, but asked the CPUC to deny all funding to WaveConnect.
“IEP argues that PG&E”s WaveConnect project would provide project development costs and give PG&E an unfair advantage over independent power producers in a competitive solicitation. IEP recommends that if PG&E wishes to pursue wave energy, it should do so through a competitive wave energy RPS solicitation. In response, PG&E argues that the results of the WaveConnect project will not be known for 3 to 5 years, at which time a commercial plant may or may not be proposed,” the ruling states.
Another controversy in WaveConnect was that PG&E wanted ratepayer funding but wanted to keep findings secret. The Ratepayer Advocate had argued the utility be required to reveal what it found during the study.
The judge did not rule on the intellectual property question.
The judge demanded that PG&E use at least 20 percent of non-ratepayer funds for all of its projects.
“Rather than placing all of the risk for project success on ratepayers, we will require that at least 20 percent of ERRP project costs be provided from non-ratepayer sources. If a project has multiple stages, each stage must adhere to this cost-sharing requirement,” the ruling to be adopted by CPUC states.
When PG&E comes back for more money for Wave Connect, the company must demonstrate that it has acquired additional funds covering at least 20 percent of the total cost of stage one, meaning $800,000 if the utility uses the $2 million from the CPUC, the judge ruled.
More WaveConnect details
The CPUC ruling lays out WaveConnect as it has been explained to the commission so far, which includes much more detail than has been presented locally.
PG&E proposes that WaveConnect will be funded in three stages. The first stage includes all of the feasibility and licensing work for the two wave sites and is estimated to cost $6 million over three to five years. These costs include fees for consultants, legal services, engineering and technical consultants, environmental studies, design and planning for WEC devices and costs for the deployment of a limited number of WEC devices for testing, the ruling states.
(The CPUC relies here on the preliminary permit, which makes it clear that the 5 megawatt test will be done in the ocean in the first three years.)
The second stage, estimated to cost between $15 to $20 million per site over two to four years, includes development of infrastructure, undersea cabling, and greater numbers of WEC devices, the ruling states.
During stage three, the most promising WEC devices will be deployed in larger quantities up to 40 megawatts per site and connected to the grid. PG&E does not have a cost estimate for Stage 3. PG&E has only sought funding for stage one from CPUC.
The judge points out that may be all that can get funded.
Since the maximum ERRP funding for one project is $7 million, PG&E cannot exceed this limit over the life of WaveConnect. Thus, if PG&E is authorized to expend up to $6 million for Stage 1 through ERRP, WaveConnect will only be eligible for $1 million in additional funding for future stages. PG&E cannot request over $7 million in ratepayer funding for WaveConnect through subsequent ERRP funding periods nor through a separate application, the judge said in his ruling.
Fort Bragg isn”t the only ones to submit comments about WaveConnect. Char Flum, a local ocean activist, has filed comments and is encouraging others to comment about the “huge gift to PG&E from our pockets.”
Flum spent some time finding places to send comments and provided the following: mail California Public Utilities Commission, 505 Van Ness Ave. SF, CA 94102, or email public.advisor@cpuc.ca.gov.
Gjerde points out another important milestone is when the executive director of the CPUC holds a workshop to resolve administrative issues with these grants, to be held within 90 days of April 29.
The ruling states that workshop should resolve important outstanding issues.
“Among these remaining issues are the development of the renewable technology assessment report, utility investment plans, program guidelines, bid-ranking criteria, reporting requirements, and IP guidelines,” the ruling states.
Renewables Portfolio
The California Renewables Portfolio Standard Program was established by Senate Bill 1078. The statute required that a retail seller of electricity, such as PG&E, purchase a certain percentage of electricity generated by Eligible Renewable Energy Resources (ERR). The state”s Energy Action Plan requires 20 percent of each utility”s annual retail sales per year by 2010.
In addition to the 2010 mandate, in 2005, the governor called for an acceleration of the RPS to 33 percent by 2020. Projects such as WaveConnect must be able to achieve commercialization at a competitive price within the 2020 timeframe.
While the state is not mandated by legislation to reach this more ambitious goal, the commission is working with investor-owned utilities to evaluate to what extent this goal can be achieved, the judge wrote.
