The Morning Report
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Monday, Nov. 5, 2007 | The debate about the proposed Sunrise Powerlink took a new turn recently, with the release of engineer Bill Powers’ report, who unsurprisingly criticized the backcountry transmission line and recommended we blanket the region in solar panels to meet our future energy needs. However, both Powers’ anti-contingent and Sunrise proponents seem to be operating from the same premise: “Scotty, we need more power!”
SDG&E not-so-surprisingly takes this position on its website: “Industry forecasts show that SDG&E customers will require more energy than can be produced locally or imported on existing electric transmission lines by 2010.” Of course, as a regulated entity, they only make more money if they sell more power.
What if today, right now, we said San Diego does not get any more power? Ever. In fact, we’re going to reduce the amount of power available by 2 percent every year for the next 50 years. What do you think might happen?
Sure, the obvious happens: our local politicians would make enemies of Sempra and the big developers (who seem to hate anything that might be considered an environmental policy restriction). The politicians just might have to find a different way to get re-elected.
But more importantly, we might actually start to conserve. Developers will have to make intelligent design choices, instead of building condo towers like mine where I have to run fans and the AC just to keep it at 78 degrees. New vendors and technologies will spring up all over the place to help us maintain our quality of life with less power, and support intelligent growth of our region and economy. Stationary bike to power your TV, anyone?
The best part is that this approach costs current ratepayers nothing. That’s right, nothing. No subsidies or incentives required. The government can continue not doing anything, one of its favorite pastimes. If you’re a heavy power user that just can’t find a way to conserve, you’re going to go ahead and put solar panels on your roof — because otherwise you won’t be able to watch CSI after work.
Yes, this sounds an awful lot like a mandatory cap. For those of you that hate cap-and-trade, stop reading now.
In order to have an effective region wide cap, each individual electricity customer will need to have their own cap ’cause I’m sure not going to trust my daytime-soap-watching neighbor or the sports bar on the corner to not drain all my power. For discussion purposes, suppose we set residences at a daily maximum average of 20 kilowatts. Now what if I’m pretty conservative and can get by with using only 12 kwh, can I sell my other eight to somebody else? You betcha.
An individualized cap-and-trade system could really have a profound effect. Forget taxpayer-funded incentives and subsidies — I can get paid for selling my unused power, whether I generated it through conservation or installing solar panels! And as more and more people move to San Diego, and less and less power is available, my unused power becomes more and more valuable. Maybe that new condo developer will have to make a deal with the surrounding neighborhood in order to buy enough power for the additional housing, or even just to run their construction equipment. Additionally, in this case consumers are only selling numbers on paper, not requiring new meters or technology to actually sell energy back into the grid.
Sempra plays a vital role in this scenario, and still has the potential to make vast sums of money: The utility is now the broker that allows me to buy and sell my kilowatts, just like Charles Schwab lets me trade my stocks — taking a fee on every transaction. Plus, they didn’t have to lay out any big upfront capital, build infrastructure, argue for rate increases, or destroy any open space. I might even buy one of SDG&E’s new Smart Meter devices myself if that was required to day-trade my electricity.
Scotty, I think we’ve got more than enough power. Let’s sell some of it to the Klingons that moved in next door.