A prominent California ratepayer advocacy organization has slammed an agreement between the state's investor-owned utilities and the Lawrence Livermore National Laboratory to conduct studies into new renewable grid management techniques, calling the agreement a sweetheart deal between the utilities, the lab, and California Public Utiltities Commission (CPUC) president Michael Peevey. The group is calling for the Legislature to make sure such an agreement doesn't happen again.
At issue is the "California Energy Systems for the 21st Century Project," a proposed collaboration between the Lawrence Livermore Lab, the state's largest utilities, and the California Independent System Operator to study techniques to increase reliability of an increasingly complex grid. The project would cost up to $150 million over a five-year period, and the CPUC has agreed that the utilities may recoup their costs from ratepayers.
That's what's raised the ire of The Utility Reform Network (TURN), which has blasted Peevey for allegedly shepherding what TURN calls his "pet project" through the CPUC approval process. Here's how TURN put it in a press release this week:
TURN submitted evidence to the CPUC, obtained through public records, that President Peevey played a central role in soliciting the proposal, and guiding it through the Commission. E-mails and phone records describe over a year of pre-filing meetings and contacts between President Peevey and members of his office with officials from the utilities and LLNL, including dinner at Jardiniere, an upscale San Francisco restaurant. But President Peevey himself ruled on TURN's motion for his disqualification, first sitting on it for nearly six months, then denying it without addressing the evidence.
TURN is supporting legislation by State Senator Jerry HIll that would require independent review of research projects that will be funded by ratepayers.
For his part, Peevey lauded the project in a press release Thursday. "This project will benefit utility customers in many ways," said Peevey. "Research findings are likely to improve the safety of gas operations by reducing the amount of pressure needed in transmission pipes in order to maintain distribution flows, and also by improving leak detection and predicting pipe breaks. Further, the project is very likely to provide benefits to ratepayers that exceed costs across both electric and gas operations by avoiding unnecessary purchases of power support services and by identifying with precision places where more grid investment is needed."
On the face of it, the research project seems worthwhile: it's a plan to use the Livermore Lab's highly advanced computers to study how best to plan for running a grid on intermittent renewable energy, among other things. But given that the total five-year cost of $150 million is significantly less than a typical one-quarter profit for any of the utilities involved, and given that the information they derive from the study will help them stay in business through the renewables shift, they might consider footing at least some of the bill themselves. Just a thought.
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