California’s Energy Vampire: Solar at Night (Silverstein misleads in Forbes)

By Wayne Lusvardi -- September 15, 2020

“Cal-ISO reported for August 14 … a sudden, unplanned 1,098-megawatt ‘forced’ loss of wind power on that day from the Alta Wind Energy Center in Tehachapi serving Southern California….”

“Cal-ISO formed a Western regional Energy Imbalancing Market in 2014 … to provide power during its daily ‘two-hour energy crisis’ at sunset when solar power cuts out (called the Duck Curve).”

Writing in Forbes magazine online, journalist Ken Silverstein claims that “Green Energy is Not Among the Culprits Behind California’s Energy Crisis”. Who is this author, and what is his logic and evidence?

Silverstein has written several non-fiction titles for Verso Books, a publishing house dedicated to radical leftism. He is one of the promulgators of the media myth that Enron caused the California Energy Crisis of 2001, notwithstanding the Enron officials who were convicted of accounting fraud. Curiously, Silverstein makes no mention that Enron saved the wind and solar power industries in the 1990’s out of a profit motive.  That Silverstein writes for pro-business Forbes magazine online belies that he believes that maximizing profits is unethical and undemocratic. 

Enron Reconsidered

Silverstein’s article deflects the blame for California’s blackouts off of green power. According to him, the current blackout crisis is a repeat of the California Energy Crisis of 2001, but with no Enron to blame. He writes that the 2001 Crisis was instigated when energy “traders took power generators offline”, shorting energy supplies, and spiking prices “through the roof.”

When I was with the largest urban water agency in California, I formed an Energy Crisis Task Force in 2001 to inform its board of directors about policy options to manage the crisis that was costing the agency $500,000 extra in power costs per day.

I had an energy trader track down the infamous Enron shutdown of a 52-megawatt power plant in Reno, Nevada to determine the facts.  Enron shut the plant down because of grid congestion at that hour of the day, not because of gaming the market as it was then (mis)reported.

Moreover, the City of Pasadena arbitraged the energy market the same as Enron allegedly did and made a $150 million windfall during the crisis. Were they greedy profiteers too? 

So much for Silverstein’s hearsay-based fake news account of how Enron created that crisis, made famous by pop books and movies and newspaper journalists.

What created the 2001 Energy Crisis was that in 1996 the U.S. EPA ordered California to clean up its smoggy air basins by 2001 or federal road and education funds would be cut off. The only solution at that time was to force the sale of old, diesel polluting power plants along the coastline to merchant power companies who would retrofit the plants with cleaner gas-powered turbines.

Similar to today’s green power quotas, California did not build enough gas power plants to meet the demands of a cold snap in the winter of 2001 during this transition. A bad hydro year (not uncommon) exposed the gap. So, environmental mandates and renewable risk triggered the shortages under capped retail prices, not unlike the recent (and possibly ongoing) power crisis of 2020. Enron was only a fall guy back then and nonexistent today.

Blaming the Grid Operator

Silverstein reports that Loretta Lynch, former head of the California Public Utilities Commission (CPUC) and Attorney General under President Obama, stated that there was a surplus of power during the recent blackouts, faulting management decisions at the California Independent System Operator (Cal-ISO).  

The actual Cal-ISO report of Curtailed and Non-Operational Units for August 14 obtained by my public information request confirms a sudden, unplanned 1,098-megawatt “forced” loss of wind power on that day from the Alta Wind Energy Center in Tehachapi serving Southern California and a 428-megawatt unspecified loss of natural gas power serving Pacific Gas and Electric (PG&E) in Central California, just as Cal-ISO reported.

So, I believe that Silverstein relied on hearsay rather than hard evidence in blaming the ISO.  However, at the very end of the article Silverstein contradicts himself (and Lynch) by writing “demand…outstrip(ped) supply in some places.”  Silversteins is playing both ends against the middle to deflect criticism.

Regionalized Solar Power is Self-Limiting, Unsustainable

Silverstein acknowledges that other “western states are also enduring heatwaves and setting limits on the supplies that they can send over” to California to fill their power deficiency.

Cal-ISO formed a Western regional Energy Imbalancing Market in 2014 with Warren Buffett’s Pacificorp hydropower dams, federal hydropower dams, and LADWP coal-power plants in Utah to provide power during its daily ‘two-hour energy crisis’ at sunset when solar power cuts out (called the Duck Curve).

But by August 2020, the Imbalancing Market could not provide enough backup power to California for its month-long heat wave, because the out-of-state power providers had expanded solar power in their own service states that required that backup power.

Thus, while California’s power grid depended on regionalization, the grids in other states were balkanizing due to solar power without California’s awareness.

‘Microgrids’ as the Solution?

Silverstein deems green power and imaginary microgrids to be the ultimate solution to blackouts. But wind power precipitously died on August 14, solar is only available 8 to 10 hours per day, and microgrids or significant battery storage was not in place during the heat wave.

Nevertheless, he says it was illogical for the Charles Koch Institute to criticize green energy as inadequate during the heat wave. Why? Because the Institute “promotes fossil fuels.”

Vampire-Like Solar Pricing

Silverstein says in effect that blackouts are tolerable because “the price of wind and solar power is dropping precipitously, making them a low-cost alternative to other fuels.” But this is a half-truth; the other empirical half of the truth is that as green power prices have dropped, total system costs have risen, especially for electric vehicles:

Average Price of Electricity by Sector for California –
U.S Energy Information Administration June 2020

	Cents kWh change/ Percent change	June 2020 Cents per kilowatt hour	June 2019 Cents per kilowatt hour
Residential	-01.78 cents -Minus 5.2%	19.79 cents	20.87 cents
Transportation	+$1.42 +16.4%	10.09 cents	8.67 cents
All Sectors	+0.54 cents kWh +1.3%	18.78 cents	18.54 cents

What is touted as the shift to clean, green power and microgrids in California, replacing monopoly electric utilities with local power-buying cooperatives (called Community Choice Aggregators or CCA’s). The plan is to eventually split up the grid into “microgrids” run by the non-profit CCA’s including distributed generation (batteries).

The idea of the CCA’s is to beat the overall market and buy cheaper hydro, thermal, and/or solar power that is proximate to their city or county, leaving the big utilities with stranded system costs. But when CCA’s search for good deals in the power marketplace, it may be no different than Enron’s infamous arbitrage energy trading strategies (“Fat Boy”, “Get Shorty”, “Death Star”).

The CCA’s apparent approach is also “cost shifting” whereby one group underpays making another group overpay. Think of it as concentrated benefits, diffused costs–or privatized benefits and socialized cost. With the expansion of solar power and its daily energy crisis at sunset, and local CCA’s, solar power is a vampire-like system like a bat that lives by “preying on others at night or an extortionist who takes advantage of others for personal gain”. 

In October 2020, California electric utilities will be shifting to Time-Of-Use” (TOU) pricing that will drive up rates during the sunset hours of the day when conventional gas power has to take over. The apparent goal is to drive everyone to using rooftop solar panels with battery packs, which are currently non-competitive without huge subsidies.

Conclusion

California’s move to green power CCA’s captures low power prices for mainly urban, Democrat strongholds located near thermal and hydropower plants in Northern California, and shifts the higher costs onto Southern California and rural, Republican areas to depend on vanishing imported power.

It’s a California water war like the movie “Chinatown”, only with electricity. But somehow, Silverstein sees something more “ethical and democratic” in green power. 

CCA’s might end up successful, albeit vastly more costly, if they can diversify their power and abandon the 100 percent green power mandate; but the expansion of solar power is self-limiting, unsustainable beyond existing penetrations and vampire-like.

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Wayne Lusvardi formerly worked for the largest urban water agency in California and served on its 2001 Energy Crisis Taskforce.  He appraises stock-owned water companies regulated by the California Public Utilities Commission, water rights and water facilities and development land for Community Facilities Districts bond issues. Lusvardi has received no compensation for this article from anyone nor holds investments in any public utilities.