The missing element of the Renewable Energy study

12.03.12

Tim Redmond

San Francisco Bay Guardian

Since San Francisco's Local Agency Formation Commission is meeting Dec. 7 to talk about renewable energy, I went and read the 100-page report of the Mayor's Task Force on Renewable Energy, which offers 39 different suggestions for meeting the goal of 100 renewable electricity in the city by 2020.

That's a pretty ambitious goal. The guy who set it, Gavin Newsom, loved lofty, ambitious projects, particularly when he was never going to be the one to carry them out. So too here: Newsom announced the city's goal in 2010, shortly before he left for the Lieutenant Governor's Office. Ed Le convened the task force earlier this year, and the members, most of whom have legitimate qualifications for the job, got right to work.

The most important conclusion of the report: Yes, it's financially and technologically feasible to generate all of San Francisco's electricity from reneweable sources, and we can get their in a short eight years. One key element: More distributed generation -- that is, the city needs to create financial and regulatory incentives for people to put solar panels on their roofs. In San Francisco, with sun much of the year (and small houses), a rooftop solar installation can pretty much power the average single-family home and can pick up a fair share of the load of the typical four-unit building.

But while the report gives a shout-out to CleanPowerSF, which will soon be offering 100 percent renewable energy service (for a slightly higher price), and talks about the need for the city to build its own renewable generation facilities, which have to be a part of the plan. But it has a glaring omission -- it doesn't once mention public power.

Why is that an omission? Because San Francisco is never getting to 100 percent renewables while Pacific Gas & Electric Co. still controls the grid.

Right now, with today's technology, you can't get close to 100 percent without a significant amount of distributed generation. Lots and lots of people have to generate their own power -- at which point, they no longer need PG&E (except that, by law, the grid is the default storage battery, but that's going to change soon, too). In simple terms, distributed generation puts private utilities out of business. So they won't ever go for it, and will -- quietly, behind the scenes -- so everything possible to keep if from happening.

Likewise demand management, something the Renewable Energy Task Force discusses at length. San Francisco already gets about 40 percent of its electricity from the Hetch Hethcy hydro project; If the city could reduce its energy use by 20 percent, that's 20 percent we don't have to generate. And reducing use is way cheaper than building new generation facilities.

But why would PG&E want to sell less electricity? There are all sorts of state laws mandating efficiency, but no PG&E CEO is going to make that a big push; it costs the company money. A PG&E that sells 20 percent less electricity is a smaller PG&E, with smaller staff, smaller revenue, and smaller profits. 

That's why the only way the key components of distributed generation and demand management are ever going to work is if San Francisco gets rid of PG&E and sets up a municipal system. Around the country, the munis are leading the way in renewables, because they have no stockholders to satisfy.

At least that ought to be part of the report, no?

http://www.sfbg.com/politics/2012/12/03/missing-element-renewable-energy-study

Car Sharing Widens the Lanes of Access for City Drivers

Josie Garthwaite

For National Geographic News

Published November 26, 2012

Behind Valencia Street's widened sidewalks and bike lanes, San Francisco has another tool ready to cut traffic and transit crowding. Nestled in the neighborhoods surrounding this longtime transportation corridor are hundreds of parked cars—available for sharing.

Brian Scates, creative director at a Silicon Valley startup, rented out his 2000 Audi All-Road last year for $50 to $60 a day, rather than let it sit unused while he biked around town and commuted to work by train. Meanwhile, Sebastien Rouif throws his surfboard into the back of his neighbor's pickup truck on Saturdays to drive down the coast and catch some waves. The fee and gas total about $40, cheaper than other rental options—and it's a lot less expensive than owning a car. (Related Pictures: "Twelve Car-Free City Zones")

Scates has since cut back on sharing his car, but still believes in the idea: "I'm all about fewer cars on the road, and maximizing the value that we get out of those vehicles."

Scates and Rouif, who both rented through Getaround, a car-sharing network, are in the vanguard of San Francisco residents who have given peer-to-peer car sharing a whirl. P2P, as it's known, aims to help address transportation problems by mining a largely untapped resource: Most cars sit unused most of the time. At least 30 companies worldwide are offering P2P car sharing, which enables short-term access to personal vehicles in a way that is convenient, smartphone-friendly, and cheap.

The system is not without its problems. Sharers have to be willing to tolerate additional wear and tear on their vehicles; for some, that alone is a deal breaker. And though a few states have passed laws establishing rules on car-sharing insurance coverage, liability issues remain.

Still, cities like San Francisco—feeling the strain both of too many cars on the road and crowded public transit—are taking steps to encourage car sharing. Indeed, they echo the P2P startups in touting the business opportunity inherent in helping people to consume less through sharing.

"If you ask how to transform a car from a product into a service, you get a whole new economy," said Shannon Spanhake, deputy innovation officer for the City of San Francisco. 

Community Cars

Car sharing isn't entirely new. One program begun in a Swiss housing cooperative in 1948 continued for 50 years; individuals who couldn't afford a car on their own instead gained mobility by sharing a few vehicles. A series of car-sharing experiments were launched in the 1970s in Europe, after the Arab oil embargo caused worldwide energy prices to skyrocket. But one of the earliest studies on the concept concluded in 1969 that "community garages" never would work in the United States because cities here had "numerous rivers" of highway and "oceans" of parking space to accommodate individual car ownership.

Four decades later, with jammed highways and astronomical parking prices a near-universal feature of life in U.S. cities, a few nonprofits and businesses have begun to see opportunity in offering car sharing as an alternative. (Related: "Five Signs California Is Ditching Its Car Habit")

A leader in the movement was Zipcar, the 12-year-old membership-based network with some 730,000 users in 20 cities and college campuses in North America, Spain, Austria, and the United Kingdom. Peer-to-peer car sharing embraces the Zipcar idea—short-term rentals and convenience enabled by mobile technology. But P2P takes the concept a crucial step further by cutting out the expense of keeping a fleet of cars as well as maintenance crews and dedicated parking spaces.

Network members list their own cars for rental. Carless city dwellers join to gain occasional access to a set of wheels. The car-sharing company typically screens renters and vehicles, offers a platform for matching up car owners and drivers, facilitates payments (while taking its cut), and provides insurance.

Car sharing can be relatively low tech. For many RelayRides and Getaround sharers, for example, the car owner meets the renter in person, checks the driver's license, offers a quick orientation on the car, and hands over the keys. But many companies use technology to allow the rentals to take place without such face-to-face meetings. RelayRides can enable keyless access if the car owner subscribes to General Motors' OnStar service.  Wheelz has its own technology (and Getaround is deploying a similar device) to enable renters to unlock strangers' car with apps on their smartphones.

Wheelz, which started out on college campuses but rolled out to the general public in San Francisco last month, says it installs $100 to $200 worth of proprietary gear under the dash of each car in its network, not only for keyless entry, but for tracking vehicle location and calculating fuel use (the cost of which is then added to the driver's tab). Many of the car-share companies also plug into the power of social networks to enhance trust; they have online communities of users where car owners and renters rate each other publicly, following the eBay model. (Related: "California Tackles Climate Change, But Will Others Follow?")

Advocates of peer-to-peer car sharing see these services as part of a larger trend, known by turns as "collaborative consumption, the "sharing economy," or simply, the "mesh." The idea is to turn goods into services, through an economy built on "accessing" cars, bicycles, power tools, homes, workspaces, or garden plots. (Related: "Bike Share Schemes Shift Into High Gear") The epitome of the notion is the rapidly growing Airbnb marketplace for sharing apartments, houses, and other spaces, which has expanded in four years to 26,000 cities in 192 countries.

Peer-to-peer car sharing has caught fire around the globe, expanding to more than 30 companies worldwide, up from only a handful in 2010. Investors are betting that peer-to-peer car sharing is an idea whose time has come. RelayRides has a slew of venture capital backing, from Google Ventures to General Motors Ventures. In August, Getaround announced it had attracted $13.9 million in funding, including from Google co-founder Eric Schmidt's Innovation Endeavors, Yahoo chief executive Marissa Mayer, and actor Ashton Kutcher.

Among the backers of Wheelz is the car-sharing giant Zipcar. The companies portray the services as complementary rather than competitive. Wheelz chief executive and co-founder Jeff Miller says vehicles in the Wheelz network are priced, on average, about 10 to 15 percent lower than comparable Zipcar vehicles. That's not a huge discount; what distinguishes Wheelz cars is their convenience, he said. "The cars are where people live. They're in your neighborhood, they're across the block." Plus, he added, "It has sort of a feel-good ethos to it," because the cars—and much of the fee—stay within the community. (Wheelz takes 40 percent of the rental fee, while the owner keeps 60 percent.)

General Motors is not the only automaker that is taking the trend of access over ownership seriously. Car2go, a program from the German automaker Daimler, allows members in 15 cities and five countries to borrow pint-sized Smart Fortwo cars. Similar networks have been set up by BMW in San Francisco and four German cities, and by Renault in France. Sydney, Australia, is now home to more than 9,000 car-sharing members, and by 2016 the city aims to boost car sharing among its residents to 10 percent of all households. The city is supporting the trend by offering convenient curbside parking, particularly in urban renewal areas. (Related: "Coal-Fired Australia, Buffeted by Climate Change, Enacts Carbon Tax")

Evolving Rules of the Road

The rules of the road are still evolving.

"There are all these apps and other ways of accessing transportation within cities, which are all part of the solution, but it's getting ahead of policies," said Rick Hutchinson, chief executive of San Francisco Bay area's pioneering nonprofit car-share service City CarShare, at a recent panel discussion.  For instance, regulators in California and New York City have recently clamped down on operations of several companies they said were acting essentially as unlicensed taxi services, enabling citizens to hail and pay for chauffeured rides by smartphone. (Related: "To Curb Driving, Cities Cut Down on Parking")

For peer-to-peer car sharing, one of the trickiest questions has been insurance coverage. California, Oregon, and Washington state all have passed laws within the past two years aimed at ensuring drivers are covered (generally by the car-sharing company and its insurance partners), while protecting the vehicle owner from the risk of losing his or her own insurance coverage.

In U.S. states without such explicit law, insurance companies that write personal auto insurance typically view car sharing as an invalidating commercial use of a vehicle. In Boston earlier this year, a RelayRides renter died and four riders in the other vehicle were severely injured in a crash where lawyers anticipated the claims would surpass the $1 million insurance provided by the car-sharing company. Who will ultimately pay the balance will depend on the outcome of wrangling among insurance companies and, possibly, the courts. But a New York Times report on the case in August noted that the owner, who received a check from the car-sharing service insurance to cover the cost of replacing her car, immediately listed her new vehicle on RelayRides.

But are there enough enthusiastic car sharers out there to for P2P to grow into the kind of business its investors envision? In San Francisco, a hotbed of P2P activity, only about 1,500 of the city's 400,000 registered cars are shared vehicles, said Timothy Papandreou, deputy director of sustainable streets planning and policy for the city transit agency. The city is actively crafting a strategy for supporting—and regulating—sharing of "anything that moves," he said, from cars to electric scooters, and a much-anticipated bicycle-sharing service rolling out in January. Papandreou says that if the number of shared vehicles in San Francisco increases fivefold, total car ownership could potentially drop by an estimated 25 percent. That would ease crowding on roadways, and hopefully, on the city's strained streetcar and rapid transit system. "Everything comes down to transit crowding," he said. "Our transit is at peak capacity."

Whether P2P can take a bite of city transit problems will depend on the experience of the sharers. Sebastien Rouif, the surfer, who works as a transportation analyst with the French consulate, has tried to persuade his roommates to list their cars on Getaround. In addition to helping the concept to spread, it would also enable him to borrow their vehicles and be covered by Getaround's insurance. So far, he said, they are not convinced.

Scates found that renting out his Audi through Getaround allowed him to bring in about $1,200 over the course of a year, offsetting a portion of the $300 per month he was paying for parking. "Everyone was nice and most of them brought the car back without issues, and had it clean and full of gas," he said. "Only one renter ever brought it back dirty and not full. I'd say it was 90 percent positive."

Still, there were downsides. "The individual renter is spending time handing off keys and coordinating rentals, keeping the car full of gas and clean, getting it serviced more often, and dealing with increased repairs," Scates said. "So even with the extra income, there are tradeoffs."

Once, his Audi came back with a broken cigarette lighter; another time there was a broken air spring in the suspension system. Because of the problems, and the fact that he no longer pays for parking (he now parks his car outside the city), Scates dropped out of active sharing. He doubled his rental rate, and has had no takers at the new price. Nonetheless, Scates says he'd still recommend the service to recoup some of the cost of keeping a car in a city like San Francisco, especially for "for folks who aren't emotionally invested in their cars."

The ranks of such drivers may well be growing, with statistics clearly showing that younger Americans are buying fewer cars and driving fewer miles than their peers in previous generations. Networks like Getaround, RelayRides, Wheelz, and others are betting that in the next chapter of the American love affair with the automobile, drivers will be less smitten with the vehicle, and more devoted to sharing the ride. (Related Pictures: "Cars That Fired Our Love-Hate Relationship With Fuel")

This story is part of a special series that explores energy issues. For more, visit The Great Energy Challenge.

http://news.nationalgeographic.com/news/energy/2012/11/121126-peer-to-peer-car-sharing/

Can Energy-consumption Data Change Consumer Behavior?

By Knowledge@WhartonNov. 16, 2012

Time magazine

Do you know how much energy you consume every 15 minutes? Most would say that’s a hard — if not impossible — question to answer, but San Francisco-based utility provider Pacific Gas and Electric (PG&E) now has access to that information for 30,000 of its residential customers, thanks to its “SmartMeter” program. PG&E’s SmartMeters are its prime vehicle to fulfill its mandate from the state of California to get people to use less energy.

For 36 months (January 1, 2009, through December 31, 2011), PG&E has used SmartMeters to collect consumer energy-use data in Northern California. The devices measure residential customers’ electricity and gas usage at daily, hourly and 15-minute intervals. The goal of the program, according to PG&E, is to help customers better understand their energy usage and find ways to save on their energy bills. According to the PG&E website, customers who participate in the program have the ability to be notified by email, text message or phone when their utility use “is moving toward a higher-cost tier.”

The energy consumption data will supplement existing information on customers’ demographics, billings and payments, call center reports and utility pricing, among other variables. The company states that by studying all of this information, it hopes to gain insights into how its SmartMeter platform might be used “to engage customers, reduce energy consumption and offer customers appealing alternative pricing schemes.”

But with so much data to sort through, that’s a tall order. PG&E has partnered with the Wharton Customer Analytics Initiative (WCAI) to lead the effort, which will help identify academic research groups across the world to study the data. Peter Fader, Wharton marketing professor and WCAI co-director, notes that the PG&E project has wider implications for businesses that increasingly use data analytics to extract business intelligence, by offering a model on how to determine the volume and quality of information they need to track in order “to change behavior in meaningful ways.”

“This is a unique data set, and we don’t know of any other that has this level of granular data,” noted WCAI research director Ben Adams during a webinar announcing the research project earlier this month. In addition to energy usage data, researchers will get information about PG&E’s energy efficiency rebates, demand response programs and special rate plans that were available to the customers covered in the data. PG&E will safeguard customer privacy and sign nondisclosure agreements with researchers, company executives said at the webinar.

Studying data collected by the meters will help the company figure out “which message to send to which household at which time in order to get them to conserve energy,” says Fader. “Our job is to find the right academics out there who will help them answer [these] questions.” Those who are selected will receive PG&E’s data sets, and are expected to spend a year studying them before they file their findings and recommendations.

http://business.time.com/2012/11/16/can-energy-consumption-data-change-consumer-behavior/#ixzz2CgwrzJfl

Energy Efficiency’s Next Great Leap: Predicting the Weather

By Hannah Miller | November 19th, 2012

Triple Pundit

A small metal box in the basement of the InterContinental Mark Hopkins Hotel in San Francisco is thinking about the weather. And what time of day it is. And when the sun will rise and set.

This box, part of the first installation of the new Stem Energy system, is paired with a battery, and will be using all that atmospheric and environmental data to make a second-by-second decision about whether the hotel should pull from the meter for its energy, or run on battery power. It’s a new online, data-driven energy management system designed to reduce peak usage based on the type of multi-variable modeling used in the financial industry.

And best of all, these meter-battery hookups require no action by users to maintain it or to hook it up to the HVAC system – nor any behavioral change, no turning lights off or the thermostat down. They just sit there (there’s no charge to rent them) and mint money, the savings split between Stem and the customer. (In the case of InterContinental, a 50-50 split.)

On Thursday night, Stem CEO Salim Khan, founder Brian Thompson, and InterContinental‘s Harry Hobbs led tours and had a kickoff event for the installations in the two hotels in SF, one of them a razor-sharp new Gold LEED hotel, and the other an 85-year old masterpiece. Under Hobbs’ leadership, both hotels have instituted major efficiency measures over several years, but the Stem system “has really filled a gap,” according to Hobbs: Specifically, knowing to the second when to switch to battery power to save on peak usage charges.

For a hotel like the Mark Hopkins, with an average monthly electricity bill of $60,000, this is no small matter. (They get calls from the utility to turn down the AC during peak demand in the city). Hobbs said he expected the Stem system to cut their bill by 15 percent.

Stem was founded in 2009 by Thompson, whose background is in e-commerce and investment banking. One of the main problems in renewables is predicting when energy will be available – based on weather patterns, cloud cover, etc. – and Thompson sought to apply the sophisticated financial models developed for e-commerce to the field of energy. Reports of past demand in the buildings are combined with data from Weather Underground’s API, for example, to create a predictive model to run the system.

What he came up with was a cloud-based algorithm that applied not just to solar, but to all energy consumption, regardless of source. They partnered with LA-based CODA, manufacturer of EV car batteries and storage cells; based on mostly work of mouth, they are almost to their capacity for orders in 2013, mostly to mid-size commercial buildings like hotels, restaurants and gas stations.

“The Stem system… well, it’s a battery…and…” said Thompson, mic in hand at the event, speaking to a Greenbuild crowd. “This feels like the early days of the Internet when no nobody knows what it is and I am trying to explain what Mosaic is.”

Stem employs 45 people currently, and found its first customer through the SF Community Power, a nonprofit that runs efficiency programs with groups like small businesses and low-income residents, Thompson said.

The systems in the InterContinentals required permits and were treated like a solar system by PG&E, which has been very supportive, according to Stem staff.

Hobbs, who is on the Sustainability Committee for the InterContinental chain, hopes that sustainability and luxury can be seen as something to go together.

“I’m encouraging the rest of the hospitality industry to get on board,” he said. “There is a lot of room for improvement.”

http://www.triplepundit.com/2012/11/cloud-computing-energy-efficiency-stem/

San Francisco Sets Example by Publishing Energy Consumption Data for over 300 City Buildings

Green Building Elements

11/14/12

The San Francisco Public Utilities Commission (SFPUC) unveiled detailed energy usage information for more than 300 municipal buildings in a reportreleased today to demonstrate how the city’s new building energy benchmarking ordinance can help both public and private property owners find ways to save energy and money and better understand how buildings use energy.

“Just as owners of commercial buildings must take inventory of their energy use, the City is making sure we lead by example and provide transparency and accountability about our own operations, an essential component of San Francisco’s goal to reduce carbon emissions,” said Mayor Edwin M. Lee. “I’m proud of the progress we have made and will continue to capitalize on the opportunities ahead that will save energy and taxpayer dollars.”

The report details the energy use of 305 city facilities, including libraries, medical clinics, police stations and more during 2011. Altogether, these buildings comprise 37 million square feet of floor space.

“As they say, you can’t manage what you don’t measure.  While the City is doing quite well overall, we are always looking for ways to be more efficient.” said SFPUC General Manager Harlan L. Kelly, Jr. “San Francisco’s public buildings also have the additional environmental benefit of receiving their clean, greenhouse-gas-free electricity from the Hetch Hetchy Power system.”

“Tracking energy usage through benchmarking reveals which facilities are performing well, and helps agencies understand which should be prioritized for improvements.” said John Updike, Director of Real Estate for the City and County of San Francisco.

This benchmarking effort is part of the SFPUC’s larger energy efficiency and green building program. In fact, the SFPUC has completed over 150 energy efficiency projects in municipal buildings, which are saving the City approximately $4.6M each year.
Key benchmarking findings include:

• In 2011, the 305 buildings analyzed used just under 3.5 million MMBtu of energy (electricity, natural gas and steam combined) and were responsible for 91,454 tons of CO₂ equivalent emissions.
• The overall energy usage of buildings in 2011 declined 3.8% from 2010 and 1.1% from 2009. This translates into approximately $1 million less in energy costs in 2011 than the previous year.
• As expected, some building types are bigger energy users per square foot than others, for example hospitals and museums (higher energy intensity) vs. fire stations and libraries (lower energy intensity).
• Of the 30 buildings that were eligible for energy ratings from the EPA, 75% performed equal to or better than the national average for similar buildings; and 11 of those buildings performed in the top 25% nationwide – the threshold for the ENERGY STAR label. These top performing buildings include the Public Defender’s Office, Mission Mental Health Services, and Chinatown Child Development Center. The ENERGY STAR label has not yet created ratings categories for most other public building types.

“We are learning what some private property owners who are already benchmarking buildings have known for some time – that regular measurement of building energy performance helps identify opportunities to save energy, lower operating expenses and improve property values. We hope that other owners will see the benefits for themselves as they evaluate their buildings’ energy use under the city’s benchmarking ordinance,” said Melanie Nutter, Director of the San Francisco Department of Environment.

Passed in Jan 2011, the Existing Commercial Building Energy Performance Ordinance requires owners of commercial buildings 10,000 square feet or larger to annually measure the energy performance of their buildings – a process known as benchmarking – and report energy use information to the city. It also requires owners to conduct energy audits of buildings every five years. Owners of buildings 25,000 sq. ft. and larger are already benchmarking energy use and filing reports with the city; while owners of buildings between 10,000-25,000 sq. ft. will begin benchmarking in 2013.

San Francisco’s ordinance is unique among many green-building initiatives in that it provides owners with actual energy performance information on their buildings year-to-year, not modeled or hypothetical scenarios. It also provides a national energy score so owners can see if their buildings are over or under-performing compared to similar buildings. Audits then give owners specific direction as to which building energy systems need improving, if any, and clear analysis of the costs and benefits of making those improvements.

San Francisco is one of six cities and two states with building energy benchmarking ordinances, including Seattle, New York City, Austin, District of Columbia, Philadelphia and California and Washington State. San Francisco is the first city on the West Coast to release municipal building energy use information following New York City and Washington D.C. last year.

Source: SFPUC

http://greenbuildingelements.com/2012/11/14/san-francisco-sets-example-by-publishing-energy-consumption-data-for-over-300-city-buildings/

Cities Take On Utility Role --- Chicago and Other Communities Buy Cheaper, Often Cleaner Energy for Residents

By Mark Peters and Rebecca Smith

12 November 2012

The Wall Street Journal

More U.S. cities are jumping into the electricity-buying business, in an effort to capture cheaper -- and often cleaner -- power available through the open market.

Chicagoans passed a ballot measure last week that authorizes the city to buy bulk power on behalf of residents and small businesses, no longer leaving it up to the local utility. The move makes Chicago the largest U.S. city to start buying consolidated power, a growing trend known as community aggregation.

Community aggregation has been around for a while, but only now is it attracting large numbers of participants. While big energy users have been tapping the open market since electricity retail markets were deregulated a decade ago in many states, the latest moves by cities and towns to give consumers a chance to reap the benefits without having to negotiate prices themselves.

Some communities are using aggregation as a way to buy energy from renewable sources, but in many cases, municipalities continue to get their energy from traditional producers while supporting cleaner energy by buying credits from wind, solar and other generation projects. These credits, which are sold on a secondary market, allow renewable generators to capture additional revenue.

San Francisco and Cincinnati are among the other U.S. cities using aggregation. Cincinnati officials estimate the typical household there saves about 26% on their kilowatt-per-hour rate for electricity, or an average of about $133 a year.

Even in places that don't aggregate, consumers have seen their power bills decline in recent years. Electricity prices have fallen as the cost of power-plant fuels, such as natural gas, have declined sharply, and the sluggish economy has led to lower demand for energy.

Despite the growing trend, community aggregation has faced some opposition. Some Illinois communities have rejected it, in part because of the complexity of the programs and concerns over municipal governments wading into energy markets, state and local officials say.

In San Francisco, Mayor Edwin Lee opposed a program because of concerns residents would automatically be enrolled, getting cleaner power but possibly at higher rates. Mr. Lee said he would prefer a purely voluntary "opt in" program that left the initial decision up to individual households. But the city's board of supervisors approved the program in September.

"While I enthusiastically support expanding our clean-energy resources, I continue to have serious concerns about enrolling San Franciscans into a program without their initial consent that coerces them to pay a premium," Mr. Lee said this fall.

Like in San Francisco, Chicago residents automatically will be enrolled, unless they opt out, and city officials estimate a large majority will participate.

In Illinois, existing rules and the short-term nature of power contracts are raising concerns that aggregation will do little to spark renewable projects. But already in Illinois 165 municipalities have made the switch to locally purchased power or have submitted requests to utilities, and nearly 200 others voted last week in favor of starting aggregation programs like Chicago.

Under Chicago's plan, the city will negotiate the commodity cost of electricity with suppliers such as power-plant owners and commodity trading firms. That cost typically makes up about two-thirds of a consumer's or business's power bill. The remaining third of the total bill -- the cost of distribution and delivery -- wouldn't change, and goes to Commonwealth Edison Co., a utility owned by Exelon Corp.

Citizens Utility Board, a consumer advocacy group, estimates Chicago's plan could cut monthly bills by nearly 30%. The current rates Chicago residents pay include legacy contracts negotiated before a sharp drop in power prices triggered in part by the weak economy.

Expiration of those contracts next spring would deliver similar savings, but David Kolata, executive director of the Chicago utility board, estimates negotiating the deals earlier could result in more than $100 in total savings for a typical household over the first five months of 2013.

"There is an element of community control here. Energy is a big expense," he said.

Anne Pramaggiore, chief executive of Commonwealth Edison, said her utility supports local buying efforts. It wouldn't lose anything because it handles only distribution, which wasn't affected by Illinois's 1997 deregulation law that opened power generation to competition.

Those most likely to lose out as cities handpick their electricity suppliers, experts say, are companies that produce electricity from dirtier sources, such as coal-fired power plants, which are sometimes shunned by cities. But they likely will find other buyers for their electricity.

Already, some communities are using aggregation to support renewable energy. Cincinnati signed contracts this year that lowered rates and require its supplier to purchase credits that benefit wind and other cleaner projects across the country.

In Marin County, Calif., about 90,000 homes and businesses now get their electricity from the Marin Energy Authority, which gives customers a choice of electricity plans that are 50% to 100% renewable -- besting state goals for utilities to obtain a third of their electricity from clean sources by 2020.

As of July, the Marin agency's residential customers paid an average of $3.85 a month more on a typical $93 bill to get energy that was 50% renewable, compared with what they had paid the big utility. The agency said its costs are lower, but the utility imposes an "exit fee" of about $5 a month on customers who switch. Still, some residents say they are happy to pay more to get a cleaner product.

San Francisco's program initially will enroll about 27% of residents in a 100% renewable-energy program, bypassing electricity currently furnished by PG&E Corp. Pricing is will be determined in the next couple of months.

Charles Sheehan, spokesman for San Francisco's municipal utility, said: "We want to control our energy destiny. That's the impetus for this effort, plus the opportunity to reduce our greenhouse-gas footprint and incubate our own clean-energy industry."

http://online.wsj.com/article/SB10001424052970204707104578095323990799636.html?mod=googlenews_wsj

How Real Estate Financing Models Can Boost Solar

By Andrew Burger | October 2nd, 2012 

Triple Pundit

Financial innovation—particularly at the retail level—is critical to fostering ongoing growth and development of solar and renewable energy projects. To see the triple bottom line potential to be realized, one need only look at the popularity and rapid growth of residential and community solar energy providers using third-party ownership business models by making home solar photovoltaic (PV) energy systems affordable for a much wider range of Americans.

Adapting a well-known and tremendously successful investment vehicle—the Real Estate Investment Trust (REIT)—to finance solar power projects, San Francisco’s Renewable Energy Trust (RET) sees an opportunity to significantly broaden solar energy investment opportunities for individual, as well as professional, investors while at the same time substantially reducing the cost of capital for project developers.

Significantly for solar power project developers, San Francisco-based RET says applying the REIT structure to the solar power industry can lower the cost of capital for solar power development by as much as 20 percent.

Democratizing solar PV project investment

A similar tax-advantaged renewable energy investment vehicle initiative is under way in Washington, D.C. Senators Christopher Coons (D-Delaware) and Jerry Moran (R-Kansas) on June 7 introduced legislation that would extend master limited partnerships (MLPs)—special purpose investment vehicles that oil and gas companies have used to great effect—to renewable energy projects.

Applying the REIT structure to finance solar power projects, “would be the ultimate democratization of funding and support for the solar industry,” stated RET president, Karen Morgan, in a press release. “Individuals can actively invest, knowing their dollars will put up more panels—while buying them a piece of the action in the fast expanding clean energy sector.”

Asset financing for U.S. PV projects—has grown explosively, by a compound annual growth rate (CAGR) of 58 percent since 2004, according to Bloomberg New Energy Finance, which projects that some $6.9 billion in additional capital per year will be invested in developing solar PV projects through 2020. McKinsey & Co. forecasts that another 80-gigawatts (GW) to 130-GW of new solar PV generating capacity will be commissioned in North America by 2020, RET noted.

Opening up tax-advantaged solar projects to individual investors

Required to distribute 90 percent or more of their taxable income, REITs offer investors substantial tax advantages as well as relatively high yields and steday income streams. As they can be listed and traded on the major stock exchanges, they are also liquid.

“RET is extending a mature and fully-developed financing mechanism to a new asset class, in the same way REITs have done over and over. Innovation is a normal part of the REIT industry,” RET’s chief financial officer (CFO) Christian Fong elaborated.

“REITs became the dominant investment vehicle for commercial real estate, and then evolved to include real estate-dependent sectors from cell phone towers to data centers to energy transmission. And through RET, we believe they can soon be a key investment vehicle for accelerating the growth of solar power.”

Supporting RET’s initiative is California Clean Energy Fund (CalCEF), “an independent, non-profit corporation working to advance clean energy using tools from finance, public policy and technological innovation.” CalCEF itself employs an innovative “evergreen” fund-of-funds investment strategy in which profits are reinvested to further realize its objectives, working with partners at the local, state, national and international levels.

http://www.triplepundit.com/2012/10/sf-looks-solar-reits-boost-pv-project-investment-lower-cost-capital/

Board to decide fate of city’s long-debated clean-energy program

Joshua Sabatini | 09/12/12 
SF Examiner 

Read more at the San Francisco Examiner: http://www.sfexaminer.com/local/2012/09/board-decide-fate-city-s-long-debated-clean-energy-program#ixzz26M6BMn7B

The Board of Supervisors on Tuesday is expected to decide the fate of San Francisco’s long-debated public-power program, but whether the program can overcome the mayor’s concerns and PG&E’s opposition is far from clear.

For the past eight years, the San Francisco Public Utilities Commission has worked on a program to compete with PG&E by offering customers 100 percent renewable energy for an extra fee.

Under a 2002 state law, municipalities can form such programs to purchase electricity. Only Marin County has done so, and now San Francisco wants to follow suit. So supervisors are set to vote on the $19.5 million CleanPowerSF program, which includes $13 million that would be placed in reserve.

It is the latest political battle at City Hall in which progressives are backing a program opposed or questioned by moderates. It would take six votes to approve and eight votes to override a veto from Mayor Ed Lee.

 “The mayor continues to have concerns about the risks, costs and benefits of entering into a contract with Shell, and he hopes the discussions at the board address his concerns,” Lee spokeswoman Christine Falvey said Wednesday.

But SFPUC head Ed Harrington, who has postponed his retirement to see the vote through the board, framed the proposal in a positive light during Wednesday’s meeting of the Board of Supervisors Budget and Finance Committee.

“This is the single biggest program that is even on the horizon within the city and county of San Francisco to make any difference toward any of the goals that you have set as board members in terms of having a change in greenhouse gas emissions and climate change,” Harrington said. “This program can make a dramatic change.”

The committee voted 2-1 to send the proposal to the full board with a recommendation for its approval.

Supervisors John Avalos and Jane Kim backed it, while Supervisor Carmen Chu opposed it.  Chu said she opposed it because it automatically enrolls city residents as participants unless they opt out and because it does not put the onus on ratepayers to pay back the program’s reserve funds.

Under state law, such programs automatically sign up customers who then must opt out to stay with their current utility provider.

The City would enter into a five-year contract with Shell Energy, which would provide the program’s
energy. The hope is to use the program’s revenue stream to ultimately fund the construction of renewable energy projects such as wind or solar.

The initial phase is expected to roll out to 90,000 customers. For the average energy user expected to remain with the program, their bills are expected to increase by about $9 a month.

 http://www.sfexaminer.com/local/2012/09/board-decide-fate-city-s-long-debated-clean-energy-program#ixzz26M60lSh2

SF clean-energy program may profit Shell

Phillip Matier and Andrew Ross

San Francisco Chronicle 

September 11, 2012

In an ironic twist, San Francisco's effort to go green with its own clean-energy program could wind up adding tens of millions of dollars to the coffers of one of the biggest oil companies in the world - Shell.

Under the terms of the CleanPowerSF program now before the Board of Supervisors, the city would contract with Shell Energy North America - a subsidiary of Shell Oil - to provide households and businesses with 100 percent renewable electricity.

The original idea was simple enough: Buy five years of clean energy on the open market and resell it to locals who want to go green.

The politics were equally attractive: Break the stranglehold that Pacific Gas and Electric Co. has long had on consumers, while encouraging the growth of local green alternatives like wind and solar power.

But the final product isn't what everyone expected.

For starters, Shell Energy - whose parent company just started drilling for Arctic oil off the coast of Alaska - wound up winning the contract.

"Unfortunately, as much as we've tried, Shell was the only company that was responsive to the city's bid process," said Supervisor David Campos, who has taken up the green energy cause at the board.

Having Shell as the city's green alternative is just one of the potential troubles the five-year, $19.5 million deal is encountering.

The initial sales pitch also included the idea that the program could beat PG&E prices. Instead, both the city controller and budget analyst have concluded that it could actually cost the average household nearly 23 percent extra.

What's more, PG&E has just filed papers with the state Public Utilities Commission announcing its intention to start offering its own 100 percent green energy program in competition with Shell, and probably at a cheaper rate.

If San Francisco's program can't compete or goes sideways, the city would be on the hook for Shell's losses, which could total $15 million or more, says the budget analyst.

According to city fiscal experts, about 90,000 ratepayers - or about a quarter of the city's residential customers - will need to sign up for the green program to break even.

Mayor Ed Lee has begun to express concerns over the risks and costs, including a provision that would automatically enroll San Francisco ratepayers - meaning that anyone who didn't want to participate would have to request to opt out within 60 days.

"He looks forward to a robust discussion at the board on this," said Christine Falvey, the mayor's press secretary.

Proponents counter that it is worth the gamble. They say going green may not be easy out of the gate, but that in the long run it will pay off.

"The hope is once we bring in enough revenue through the program, we can build it out to generate our own wind and solar energy and we don't have to do business" with companies such as Shell, Campos said.

http://www.sfgate.com/bayarea/matier-ross/article/SF-clean-energy-program-may-profit-Shell-3857981.php#ixzz26GRqkBpc

PG&E union mounts attack on Clean Power SF

09.11.12 - 9:25 pm | Tim Redmond

San Francisco Bay Guardian

The union that represents PG&E workers -- and has opposed every single public-power initiative in modern San Francisco history -- just launched an attack on Clean Power SF. And the union's business representative is having a hard time explaining exactly why he's working with PG&E to try to undermine this modest step toward public power.

Hunter Stern, with IBEW Local 1245, sent a press release out Sept. 11 announcing the start of a campaign to convince the supervisors not to approve the Clean Power SF plan. The line of attack: Shell Energy, which got the contract to supply sustainable energy to customers in the city, in competition with PG&E. The pitch:

San Francisco city government is considering a proposal to partner with Shell Energy of North America to inaugurate SF’s so-called “clean power” program. If the Board of Supervisors approves the proposal, San Francisco would pay millions to Shell, one of the most notorious environmental violators in businesstoday.

Shell's a pretty bad company. So is PG&E. So is just about everyone in the energy business. Not justifying Shell's behavior, just noting: If you want a contractor to deliver electricty to San Francisco, you aren't going to get a cool independent small business. You aren't even going to get Google. These folks are evil, all of them.

Oh, and by the way: Shell Energy also sells power to PG&E (pdf). Stern's boss has a contract similar to what the city is going to get. So the PG&E power we all pay for today is in part Shell power. And as Sup. David Campos points out, it wasn't as if the city chose Shell over some better competitors: There was no other company out there anywhere in the world that responded to the city's bid process and offered to work with Clean Power SF.

The key point here is that Clean Power SF is going to use Shell as a bridge -- the private outfit will deliver power generated at renewable facililities to the city's power operation, which will resell it to customers ... for a while. The goal is to use the revenue stream from the sales of power to back bonds that will allow the city to build its own renewable energy system. Five, maybe ten years down the road, San Francisco will have solar generators on city property (including large swaths of Public Utilities Commission property in the East Bay), wind generators, maybe at some point tidal generators, and will be able to sell cheap, clean, local power to customers. Shell will be gone.

Let's face it: this is a step on the path to creating a city-owned and city-run power system -- that is, a step to eliminating PG&E as a player in San Francisco's energy future. Public power will be cheaper and cleaner -- and it's going to take a while to get there. Which is why we need to start now.

PG&E knows this, too, and is fighting to block Clean Power SF, which comes before the board's Budget and Finance Committee Sept. 12. Now IBEW is allied, as usual, with the giant company.

The Stern press release talks about how Clean Power SF will be expensive:

The average home can expect to see a rate increase of 77% over their current PG&E electricity generation rates. That comes out to an increase of over $200 per year.  The higher cost of power would eat up more and more of the City budget, forcing service reductions and costing San Francisco vitally needed jobs. Our local economy would take a multi-million dollar hit.

Actually, not true: The only people who will pay for Clean Power SF are the ones who want it. The idea is that a significant number of San Franciscans will be willing to pay a little more -- maybe $10 a month -- to help save the planet. The ones who want to stick with PG&E wil have every opportunity to do so. The city budget isn't taking a hit -- municipal services already use the city's Hetch Hetchy hydropower. This doesn't cost the city money or jobs.

It will, of course, hurt PG&E.

I called Hunter Stern to talk about all of this, and we had a long conversation. He was polite and answered all of my questions. Sort of.

He insisted that IBEW isn't against community choice aggregation, that he's only worried about the city budget and the impacts on ratepayers. And Shell. So we started going around in circles, like this:

Me: So you don't oppose Clean Power SF?

Stern: We are not opposed to community choice aggregation. Just to this contract with Shell.

Me: I'm told Shell is the only contractor willing to fulfill this role.

Stern: That's what I'm told, too.

Me: So if you support CCA, what should the city do?

Stern: Find somebody else.

Me: The city has made it clear there IS nobody else.

Stern: We should put this on hold and wait around until there is.

Me: Why is IBEW unhappy with Shell?

Stern: This is contracting out.

Me: Is Shell Energy a nonunion company?

Stern: They don't generate power, they just buy and sell, so they don't really have any employees who could be in IBEW.

Me: So what if they city can use this revenue to build its own renewables, with union labor?

Stern: We aren't opposed to the city building its own renewables.

Me: But the idea here is to use the revenue stream from Clean Power SF to raise money for local renewables.

Stern: You don't need revenue to build local renewables. Just creativity.

Me: But the city has a huge budget problem now. There's no money to build local generation unless you have a revenue stream to bond against.

Stern: There are creative ways to do it.

Me: So you support CCA. You support building local renewables.Clean Power SF is a CCA program to build local renewables. Shell is the only company that answered the city's call for bids for this project. You don't have any labor issues with Shell. I don't understand where you're coming from.

Stern: I don't disagree with your checklist.

Me: So why are you against this project?

Stern: We don't think this is good for the city or for the ratepayers.

Me: But the ratepayers don't have to be a part of it if they don't want to.

Stern: I think the way the city is approaching that is a good strategy.

Round and round and round. It was making my head hurt. I wish I'd put it on tape so you could all listen.

I passed the press release along to Tyrone Jue at the SFPUC. He had a pretty clear response:

This attack is not surprising. IBEW is one of the largest unions at PG&E. They historically side with PG&E on all their issues. The fact is CleanPowerSF will not cost IBEW workers jobs. Ironically, the local renewable build out phase will be creating even more green union jobs. This happens while we weaning ourselves off dirty fossil fuel sources.San Franciscans want the choice to embrace a clean energy future. While PG&E shareholders stand to lose with CleanPowerSF, the consumer and environment stand to win.

He added:

Our ‘little creativity’ involves reinvesting revenue into aggressive energy efficiency and local renewable generation projects.  We’re simply not motivated to maximize profit at the expense of our customers or the environment.   Our common sense goal is to reinvest revenue into real projects that will reduce San Francisco’s carbon footprint, create local jobs, and build a sustainable energy future that is better for the environment and our customers.

Ugh. This is going to be a battle royal. I hope there are six votes on the board for Clean Power SF, which is imperfect but important. And then Mayor Lee will have to decide whether to side with his highly respected SFPUC general manager, Ed Harrington, who wants to make this happen, and PG&E, which doesn't.

Oh, by the way: PG&E pays Willie Brown about $250,000 a year as a "legal retainer." And I hear the mayor takes his phone calls.

http://www.sfbg.com/politics/2012/09/11/pge-union-mounts-attack-clean-power-sf

A dirty plan for San Francisco

Steven B. Falk

Sunday, September 9, 2012

SFGate

This November, San Francisco residents and businesses will be asked to tax themselves to pay for education, housing, parks, economic development, and other programs and services the city and state no longer have the financial ability to fully support. Yet at the same time our city leaders are asking us to make these important investments, they are quietly moving forward with a $13.5 million public power plan.

The city plans to contract with Shell Energy to bring what it is falsely labeling as "100 percent renewable energy" to a subset of city households for less than five years. By any standard, this is a dirty plan for San Francisco.

The CleanPowerSF program will increase costs on customers by 77 percent just to break even. This amounts to $216 per year for the average customer, according to a city controller's report. City agencies will also have to pay more for power, potentially resulting in even further cuts to programs and services.

The true cost of starting the program will be even higher. The state of California requires customers leaving an existing utility to pay a portion of long-term energy contracts. This "power choice indifference" payment is nearly another penny on every kilowatt-hour used, or about $36 per year, in addition to the $216 increase customers will already be paying. The city's public power plan will cause money to flow out of our local economy and cost jobs.

Because Shell Energy does not produce electricity within San Francisco, increased electric payments made to the company - to the tune of $13.2 million - will leave San Francisco's economy. Overall, the city controller estimates the program will result in the loss of nearly 100 local jobs.

Perhaps the dirtiest secret of the CleanPowerSF program is that absolutely no new green power would be created in San Francisco or even in California. In fact, the contract stipulates that no new green generation is required anywhere. The 100 percent renewable energy promised in the plan will come from a combination of green energy bundled with other sources - many potentially nonrenewable - and renewable energy credits purchased from existing out-of-state supplies.

Finally, the program is not entirely voluntary. Residents will be enrolled automatically in the program and, if they don't remember to "opt out," they could be charged exit fees. This feels a lot more like "pulling a fast one" on city residents than providing options to reduce our carbon footprint.

As San Franciscans are being asked to pony up more for critical public services, this hardly seems like the time to nearly double the cost of our energy without any guarantee of a greener future. It's time to pull the plug on the city's dirty public power program.

Steven B. Falk is the president and CEO of the San Francisco Chamber of Commerce. To read the controller's report, go to sfg.ly/NR4Tca.

Read more: http://www.sfgate.com/opinion/openforum/article/A-dirty-plan-for-San-Francisco-3851974.php#ixzz2678JMJTI