Fire and Water

The nation’s largest nuclear facility, the Palo Verde Nuclear Generating Station sits a mere 45 miles from the downtown of the most sprawling desert city in the world. It is now a very short drive from the metropolitan area’s western outskirts through windblown tumbleweeds to where they collect against the dusty security fences of the Palo Verde power plant.

Let us dispel any notion that the Palo Verde Nuclear Generating Station is an example of low or efficient water consumption in the generation of electricity, or of the wise use of water in a desert. The nuclear power plant shares what was once a pristine aquifer with the Phoenix metropolitan area. The 76 million cubic meters of treated water evaporated annually by the nuclear power plant represents about 25 percent of an annual overdraft of a quarter million acre-feet of water from the Arizona Department of Water Resources Phoenix Active Management Area.

The true cost of this evaporated water offered up to the winds is not adequately reflected in the wholesale cost of electricity from the Palo Verde Nuclear Generating Station. This lost value from this underpriced commodity is compounded by the irony that it is this artificially low price against which the value of solar energy is measured.

As it stands, the pricing of electricity from the Palo Verde Nuclear Generating Station is little more than a farce that translates into an extraction of wealth from future generations. Not only does Arizona enjoy coal-fired air conditioning but it is burning water in the desert.

The temporary illusion of cheap power attracted millions to the air-conditioned comfort of desert living. Now, as those thirsty, growing millions clamor for more energy the only solution being proposed is additional, thirsty nuclear power plants.

How many of those millions of clamoring desert-dwellers even capture rain for their gardens?

Filling the Gap

Arizona’s largest electric utility, Arizona Public Service (APS), has eschewed coal in their most recent annual, long-term Resource Plan. In doing so, they have unimaginatively whittled down ‘options’ to a lone candidate: renukeable ™ energy.

Arizona’s projected growth will demand a dramatic increase in the availability of electricity. Under the current budget crisis, it is difficult to imagine Arizona’s leadership hustling to address the enormous costs of expanding nuclear energy, let alone to confront the myriad other issues that surround nuclear energy. Could the best hope lie in what must be the secret wish of many . . . stalled growth? The very thought is antithetical to a culture habituated to unrestrained expansion.

In any event, nuclear energy is a long-term measure. It would take more than a decade before new capacity might be available. The demands are more immediate.

Because of both heightened demand and heat’s suppressive effects on the distribution grid, it is also possible that global warming may exacerbate the challenge of delivering sufficient electricity during Arizona’s intensely hot, summer peak demand periods.

The budget crisis will likely also prevent Arizona from employing the short-term measure of importing additional energy.

The comeuppance for Arizona’s long history of repressive rate schedules and the decades-long delay of its solar destiny may be at hand. Will Arizona become a national treasure or a national tragedy?

Solar Design Spotlight

We’re talking hot stage lights and big, bright bulbs streaming sharp shafts of white light into the night sky. It may seem illogical to juxtapose solar energy with the metaphor of such a luxuriant glare. Yet, in this case, the metaphor’s juxtaposition tempts with a delicious, irresistible irony.

Rate Crimes has presented critiques of energy policy that are based on economic analyses of solar energy. These critiques have focused on the repressive and obscure policies of the electric utilities, government, and other bodies of influence in Arizona. The purpose of these analyses and commentary is to expose how and to understand why the rapid adoption of solar energy in the sunniest climes has been delayed, if not defeated. Policy makers certainly have earned criticism, but others have also contributed to the defeat of solar energy. In a survey of culpable parties, it would be remiss to omit mention of the foibles and failings of the solar industry. The first to gain mention deserves the ‘spotlight’ unlike any other.

The sun defeats the flame of any spotlight. Apparently, a fool can still make a spotlight defeat the sun.

Yes, you are correctly seeing that. Someone actually designed a set of high-intensity lamps so that they shade a solar array. This solar array is losing significant energy. It is also possible that the life of the shaded modules will be shortened.

Normally, one might assume that the solar energy company that designed and installed this system was unaware of what must have been a later, unexpected ‘modification’ by another party. However, in this case, this image was published on the solar energy company’s website homepage as one of a series of images advertising their portfolio!

Conway’s Law of Big Energy

The most recent long-term resource plan from Arizona’s largest electricity provider, Arizona Public Service (APS), begins with a plea for absolution.

Not only is the Resource Plan chinless, it is also a stale, unimaginative and uninspiring vision with myopic horizons. It is as if one of Arizona’s largest corporations — a company that enjoyed $3.5 Billion in revenue last year — is pleading not only for absolution, but for inspiration. When your CEO is paid $8 million in a single year, one might expect that some inspiration and leadership would be generated.

In the second paragraph of the Resource Plan, the utility proclaims an eleventh-hour awakening to the value of energy efficiency and renewable resources; and then makes a somewhat timid request, “to preserve the option for potential future development of a new baseload nuclear resource.” How many pacifying qualifiers does one sentence need?

The second paragraph’s final sentence disparages what have long been the utilities' favored toxic fuels: coal and methane. The disparaging statement about coal is revealing, “APS believes that the risk of future climate change legislation and the potential for significant resulting cost increases make the acquisition of new coal resources unattractive at this time [emphasis mine].” Please notice that the company’s concern arises from the risk of cost increases due to legislation, not from the risk of global warming itself.

Before detailing the Resource Plan’s primary components, growth projections are given that match those projected here on Rate Crimes. The first component listed is, “Increased energy efficiency programs … because they are cost effective, reduce environmental impacts, and provide a means for customers to manage their usage and costs.” While this is an admirable statement of fact, it stands in as stark contrast against the reality of the long-standing, repressive rate schedules as does their second component, to “accelerate acquisition of renewable resources”.

The third component listed is “baseload power.” They define this power as, “energy that is available 24 hours a day, 365 days a year.” The utility claims, “there are currently two options available: coal and nuclear.” However, having disparaged coal, there would now appear to remain only a single “option”. But is even the leftover option of renukeable energy viable? The resource plan leaves it to us to ponder that question.

The Resource Plan neglects three critical points: First, in great part, the long-standing policy of rate schedules that repress solar energy and energy conservation is what has led to an inordinate need for further “baseload power.” Second, a single coal or nuclear generating unit cannot meet their definition of “baseload power”. Even an expensive plant of multiple generating units is at risk for failing to meet this demanding and problematic standard. The previous point regarding redundancy hints at the third point. For “baseload power” there is, at least, a third option: superior distributed network design.

Within the framework of distributed network design, their third component and their fourth, “peaking power”, merge into one.

Because central generation has so long appeared to be the easy solution, gargantuan organizations have agglomerated around the colossal generating plants. The thinking within these distended organizations naturally petrifies to where the world is seen predominantly in terms of colossal generating plants that promote further expansion of the organization, ad infinitum: a self-perpetuating version of Conway’s Law.

Conway’s Law

Organizations which design systems are constrained to produce designs which are copies of the communication structures of these organizations.

No matter how many extraordinary engineers such an organization might employ, the institutionalized professional deformation and the contingencies of daily operations result in the viewing of energy delivery challenges as a problem of resource acquisition.

Let there be no doubt: The utilities, the Commission, the Legislature, the Governor, and all citizens will soon experience unprecedented stresses in preparing for Arizona’s future energy demands. However, the problem of energy in Arizona goes far beyond the issue of energy generation; and is beyond the purview of the Arizona Corporation Commission.

Abandoning the sun for far too long was bad enough. Allowing a sprawl of poorly-designed, poorly- constructed, and tragically temporary structures to proliferate in a desert is epically criminal. It is hard to plead ignorance as a defense when clarion calls for sustainable solutions were being made a half-century ago.

The challenge that must now be met is not so much a resource acquisition problem as a systems design problem. Returning to Conway’s Law, the appropriate systems that gather and share energy must be reflections of appropriate organizations and political systems.

No one appears to be considering this underlying issue. The APS Resource Plan abdicates. The ACC is chartered to regulate, not to create policy. There are people in the legislature whose understanding is so meager that they would promote nuclear energy as somehow being renewable.

It is very possible that the system that brought us to this juncture is incapable of extricating either Arizona’s citizens or itself. There can certainly be no absolution.

It will be difficult to repair the damage done by decades of mismanagement. We can now choose to continue this tradition and send compounded costs to the future, or we can accept the burden for ourselves.

The first step must be to free the market from repressive rate schedules. Just as immediately, rigorous and mandatory building standards must be established with adequate monitoring and enforcement. The third crucial element is to design, develop and deploy a distributed energy network. The monitoring capabilities must be part of the rapid deployment of this system. These are all things that should have been initiated at least a decade ago. With Arizona’s solar resources, the knowledge in it universities, and its expertise in solar energy, the state should long ago have been the birthplace of the modern, distributed, sustainable energy network.

But before this network can be created, the system that can create this network must be created.

Kabuki Absolution ™

On the 29th of January, 2009, Arizona’s largest electric utility, Arizona Public Service (APS), docketed [1] its obligatory, annual, long-term resource plan with the Arizona Corporation Commission.

In the introductory paragraph, APS requests that the Commission either approve the company’s Resource Plan, or “acknowledge that APS considered all relevant resources, risks and uncertainties known or knowable, and at the time the Commission makes its determination, the Company’s Resource Plan is reasonable and in the public interest.” APS also requests policy guidance.

After having long foisted repressive rate schedules on an unwitting community, the utility appears to be seeking absolution from the very authority that consecrates these rate schedules. The kabuki theater goes on.

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[1] Docket No. E-01345A-09-0037

Renukeable ™ Energy

In Kabuki Theater was discussed the lawsuit brought by the Goldwater Institute against the Arizona Corporation Commission in response to the Commission establishing the Renewable Energy Standard & Tariff (REST) rules. The Goldwater Institute appears to miscomprehend the economic and political dynamics of Arizona energy policy. Or, perhaps, they have other motives?

In an April 2nd “Daily Email” from the Goldwater Institute, titled, “Corporation Commission on dangerous trajectory”, author Clint Bolick states, “Belatedly but commendably, state Representative Lucy Mason is leading an effort to reclaim legislative authority over energy policy and to define "renewable energy" to encompass hydro-generated and nuclear power [emphasis mine]. All very reasonable.”

“THE LEGISLATURE ADOPTS THE RENEWABLE ENERGY STANDARD AND TARIFF RULES APPROVED BY THE ARIZONA CORPORATION COMMISSION IN DECISION NUMBER 69127 THAT IS EFFECTIVE ON THE EFFECTIVE DATE OF THIS CHAPTER, EXCEPT THAT ELIGIBLE RENEWABLE ENERGY RESOURCES INCLUDE NUCLEAR ENERGY, HYDRO GENERATION AND ENERGY SAVED THROUGH CONSERVATION AND ENERGY EFFICIENCY [emphasis mine].”

State of Arizona, House of Representatives, Forty-ninth Legislature, First Regular Session, 2009HB 2623, introduced by Representative Mason, 7 30-901. Renewable energy standard

Both the European Union and, more recently, U.S. lawmakers have rejected defining nuclear energy as a renewable energy. Contrary to Mr. Bolick’s opinion, it is very unreasonable to define as renewable an energy source that depends upon a finite resource such as uranium. The transportation and securing of uranium and its wastes consumes a considerable amount of petroleum and methane. Furthermore, the consumption of petroleum and methane in the extraction and refining of uranium will only increase as uranium resources thin and their quality subsequently decreases. Nuclear energy is not even carbon-neutral, let alone renewable.

Still, there is considerable effort and expense being applied to the rebranding of nuclear energy. When the burning of coal becomes severely limited or is abandoned because of its deadly effects, only nuclear energy will remain as a tool of central planning. When more discover that nuclear energy is not only cost prohibitive, but is also resource limited, we will be left with no other option but to stop relying on blunt instruments and to think more deeply.

Green (Not So) Choice Rates

Rate Crimes has explained the machinations that defeat the value of solar energy and energy conservation in the nation’s sunniest state. Also explained is the economic shell game that hides the real costs of energy by shifting them into the captive small business sector, thereby creating hidden taxes.

If the manipulation of rate schedules does not suppress the value of solar energy enough, there is yet another, more spectacular assault: “green choice rates.”

Arizona’s largest electric utility, Arizona Public Service (APS), provides an optional rate schedule, the Green Choice Rates Total Solar Option, “for customers who want their renewable energy generated only by solar resources, but are not interested in installing a solar PV system [emphasis mine].”

Under this rate schedule, “each kWh purchased is priced at a premium of $0.166 plus tax, in addition to your normal monthly charges.”

In sunny Arizona, an investment in a supplemental, on-site solar electric energy system can realize returns equivalent to the long-term, historical average of the S&P 500. This is based on the avoided costs from the utility’s least expensive rate schedule.

The APS “Green Choice Rate Total Solar Option” asks that you pay nearly three times more for electricity gathered from the sun than for electricity generated from the burning of finite resources. If these solar surcharges were added to your avoided costs, then your returns from an investment in on-site solar energy would be as spectacular as a government bailout.

APS makes it seem as if their total solar option is for those ratepayers “not interested” in installing a solar PV system. There are many who are interested, but for a variety of reasons are unable to gain the advantages of solar energy. Renters are a large segment of such captives. Charging a toll to approach a more sustainable lifestyle is an undue burden on those who can least afford to carry it. Another effective method for repressing solar energy is to take or prevent the wealth of its advocates.

Energy gathered from the sun has lower economic and societal costs than does energy from traditional, toxic fuels. Electricity gathered from the sun should be sold at a generous discount, not with an absurd surcharge.

Executive Decision

In 2006, Arizona Public Service gave their CEO compensation totaling just over eight million dollars.

$8,000,000 in one year to one man.

This amount could have purchased about six hundred, two thousand-watt solar electric systems.

600 homes.

Installing these systems could have employed fifteen people for a year.

15 jobs.

In 2006, Arizona’s mean annual household income was $46,657.

$700,000 in income from 15 jobs.

Over their lifespan of more than three decades, these systems could have generated 73,000,000 kilowatt-hours of electricity.

73,000,000 kWh.

The value of this electricity, in today’s dollars, is just over seven million dollars.

$7,300,000 of electricity.

The value of solar (electricity and income) could have been . . .

$8,000,000.

Green Snow Job

Recently, a position for a “sales associate” was advertised at treehugger.com with the introduction, “Play a key role in kick-starting the solar industry!”

The required qualifications are (verbatim):

• World class communication and customer service skills and experience
• Strong math and computer skills
• Proficiency with Microsoft Office
• High level of initiative and history of accomplishment
• Dependable, able to commit to 40 hours per week (M-F)

There are about a dozen responsibilities listed. It is clearly stated that the position is full time.

The ‘kicker’ is this statement, “Compensation: No immediate compensation but opportunity for future employment based on performance and company achieving growth milestones [emphasis mine].”

Their concluding paragraph begins with their boldest statement, “Here, not only are we really doing no evil, we are doing some serious good!”

Rate Crimes exists to dispel the myth that the solar industry needs ‘kick-starting’; especially, by creatures who would ask you to labor for no substantial reward.

Beware of anything with both “clean” and “finance” in its name.

Executive Summary

“Good night, and good luck.” – Edward R. Murrow

The commercial electric rate schedules in Arizona (and now only in Arizona) have long been structured to defeat the value of solar energy and energy conservation. The rate schedules also provide an enormous subsidy and encourage prodigal consumption by discounting energy to the largest energy consumers.

The pricing system redirects costs from any apparent savings in the residential and industrial sectors into the small commercial sector. This creates a hidden tax through the higher costs of goods and services, and through the subsequently higher sales tax charges.

Furthermore, while more fortunate homeowners can avoid energy costs by investing in subsidized solar energy, renters remain a captive market.

All Arizonans need to be able to gain full value for investments in energy conservation and for solar energy. Until the rate schedules are reformed, energy efficiency measures and solar energy in the nation’s sunniest state will have diminished value.

This diminishment of the value of solar energy affects all present and future Americans by delaying our clean energy future.

As you may surmise, nearly the entire Arizona economic and political system is complicit.

Good night, and good luck.

The Scales of Int ermi tten cy (Part I)

Even though cost can be dismissed as an argument against the rapid adoption of solar energy in the sunniest regions, and the argument that subsidies are required in order for solar energy to be economically competitive has been shown to be a red herring, those who deprecate solar energy also recite what might at first appear to be a cogent argument against its broad adoption.

The sun rises and sets. Clouds billow and drift. In any particular locale, the sun is an intermittent source of energy. Furthermore, it is not yet a simple thing to store the sun’s immediate energy for later use, or to transport it to the darker regions of the globe. We billions now depend on the ready availability of the sun’s energy that was stored below our feet in very finite supply by ancient geological processes.

In a world where the unthinking action of simultaneously flipping a million switches instantaneously delivers light to a million places, and where almost no local energy generation or storage exists, the dispatchability of an energy source has great value. The quality of an energy source to be dispatched at a moment’s notice is most important in meeting peak energy demands; whether these inordinate demands are reasonably controlled, or encouraged instead.

Intermittency would appear to be the antithesis of dispatchability. Yet, intermittency as an argument against solar energy proves to be specious when matters of scale are considered. Scales of time, geography, and energy generation/consumption interact to dispel the intermittency argument against solar energy. Perhaps more importantly, these considerations raise further questions about planning, organization and policy.

At a time when solar energy in sunny Arizona comprises an infinitesimal portion of the energy mix, it is important to ask, at what portion of the community’s energy mix does the intermittency of solar energy have a real effect at the community’s scale of consumption? When more than two orders of magnitude more energy is delivered from traditional toxic sources than from clean solar energy, there can be little intermittency effect in aggregate. Even at the future slender levels encouraged by the Renewable Energy Standard and Tariff (REST) rules there can be little effect.

Beyond the prevailing comedy of scale, lurk the practical aspects of intermittency. A single overhead cloud may occlude the sun over a building or a neighborhood. A weather front may gray the sky to the horizon for days. These are less frequent occurrences in some places than in others. Sunny Phoenix, Arizona receives annually 85 percent of possible sunshine. Two-thirds of all summer days, and half of all winter days have clear skies. The greatest number of consecutive days with no sunshine occurred over only three November days more than forty years ago in 1965.