POWER GENERATION and DISTRIBUTION

BASICS

Actions by the California Public Utilities Commission in the 1990's to prevent PG&E to enter into long term contracts forced PG&E into bankruptcy when a shortage of available power sources caused a dramatic rise in short term prices with no allowance for rate increases. A history of this fiasco and the subsequent actions taken is available from this link to the Energy Information Administration, U. S. Department of Energy

In 1998 California created the non-profit Independent System Operator (ISO) Corporation. Click here to link to their web site.

The ISO maintains the transmission grid through which nearly all of California's power is transmitted from various sources to various consumer areas.

They perform two primary functions.

1. The wheeling of power from sources to users for which they charge a nominal fee.

2. Purchase and resale of power to areas which do not have power wheeled to them from a specific source.

Power is bought based upon bids made by numerous power generators, using strict bidding rules, and is sold based upon rates that are periodically fixed based upon the ISO purchase and operating expenses.

Since electricity cannot be stored, except in very small quantities - such as batteries for electric cars, if must be generated immediately when it is needed.

Power demands generally fall into three generalized circumstances, base load (that minimum load which is needed 24/7/365 and which typically occurs at night), peak load (the daily and/or seasonal load that is much larger than the base load), and back-up for both planned shutdowns and emergencies.

Accordingly, the ISO has strict rules requiring all power suppliers who connect to the grid to be capable of providing back-up in addition to their normal peak supply capability even though this means that they are required to build and maintain capacity on line that is not being fully used. Various categories are involved, including a spinning reserve, which is ready and comes on line automatically as the current load increases above the base load, and to cover emergency failures, and a non-spinning reserve that can be started up and be used in the case of planned outages.

ISO also has rules which recognize transmission system capacity limitations and related contract terms to require both the BACK-UP capability and MUST RUN terms to require that back-up facilities provide power during an emergency..

While conventional power systems can operate around the clock solar power can only operate when the is sun shining. However, to maintain the same Back-Up and Must Run capability it must be coupled with other systems which can provide this back-up. Accordingly, the cost of solar systems must include not only the actual cost of the solar system but also the cost of providing the back-up that it can not provide by itself, unless they have installed a very expensive battery storage system - not normal.

Click here to see more than you ever wanted to know about how the amount of solar power generation varies throughout the day - and the time of day when peak power is required.

It is also noted that the ISO system works well when there is an abundance of power supply capability available. However, when that is not the case, the system protects those who have not made firm power arrangements by causing rolling blackouts throughout the system rather than having any single locality pay the penalty for not having sufficient power for its on own needs. Some would call this protection, but others might protest that being blacked out was unfair because they had made adequate provision for their own local needs.

Incidentally, there is proposed legislation to require that PG&E pay the individual for the surplus power that they may occasionally make, causing their electric meter to run backwards. While that may seem fair, then it would also be fair to charge such users a higher fee when they do need PG&E power as back-up to their system. Back-up power costs more to produce than base or peaking power since the facilities to produce it are idle most of the time, and individuals who use solar panels should pay their fair share. This is accomplished by solar panel users who install time-of-day net metering meters, with lower unit charges (and credits) during off-peak usage periods and higher unit charges during peak usage periods. However, it is not done for solar panel users who do not have time-of-day metering.

MARIN CCA

Subject to various approvals, the proposed Marin CCA would be allowed to participate in the above system, subject to their following all of the ISO rules.

They could contract for power and have it wheeled to various PG&E local distribution centers for a small grid operation fee.

They could construct their own power and have it similarly wheeled.

They could presumably construct their own local power and make local arrangements with PG&E for its distribution. Presumably this would still be subject to ISO rules relative to providing back-up capability.

They could simply buy power from the ISO, based on power projection needs, at the current ISO price.