Jason Fordney, a longtime energy journalist, is the editor of California Energy Markets. In this episode, he explains why increasing numbers of Californians are “outraged” by their utility bills, why it would be “a miracle” if the state manages to prevent the closure of the Diablo Canyon nuclear plant, and why he believes there is too much emphasis in the state on “carbon molecules and not enough focus on reliability” and affordability.
Robert Bryce 0:04
Hi, everyone, welcome to the power hungry Podcast. I'm Robert Bryce. On this podcast, we talk about energy, power, innovation and politics. And I'm pleased to welcome Jason Fortney. He is the editor of California energy markets. Jason, welcome to the power hungry podcast.
Jason Fordney 0:18
Thank you, Robert. How are you?
Robert Bryce 0:20
Good, good. Thank you. So there are a lot of things going on in California. And I want to get right to it. But before that, I want you I'm gonna have you introduce yourself on this podcast, guests introduce themselves. So imagine you have 45 or 60 seconds, you don't know anyone. And you've been asked to introduce yourself, please, by all means.
Jason Fordney 0:37
Sure. Well, my name is Jason Fortney. I'm editor of California energy markets. I've been an energy journalist for a little over 20 years, based in Nevada City, which is in the Sierra foothills. And then in California, about five years from Virginia originally, and spent many years in DC working for some of the bigger price reporting agency slash news organizations where I really built my experience, learning the power industry, and I've always focused on electricity. I've done everything from market assessments, you know, pricing, general news, and got my start as a regular newspaper reporter back in suburban Virginia, covering crime. So yeah,
Robert Bryce 1:33
gotcha. Good. Well, so let's jump right in. Because we talked before we started recording, I've written a little bit about California and fairly familiar. What is going on in California? I mean, these, you know, as I sent you, the piece that I had in the Wall Street Journal a few days ago, talking about the residential rates in California went up nearly 12%. Last year. What's going on? Why why are these rates going up so high?
Jason Fordney 1:57
Well, there's a lot of reasons. You know, I think if you look at the, as I've posted on Twitter, if you look at the generation portion of the bill, the energy costs is is just a fraction of the retail bill. We have a lot of wildfire mitigation costs that are coming in decarbonisation, and just, you know, obviously, California has a pretty regulation heavy state. And what you can see is that the utilities are really being utilized to meet a lot of the environmental goals in the state. And that's putting those costs on utility ratepayers, everything from EB infrastructure to decarbonisation. And, yeah, there's a heavy obviously, a very heavy focus on decarbonisation. And this really flows from the state legislature, right. So yeah, various reasons for it. And, you know, it's a noble goal, but we have some serious affordability reliability problems here. Well,
Robert Bryce 3:12
so let's talk about that, though. You talked about it stems from the legislation. So the state has a 100% clean electricity mandate by 2045, a net zero goal by 2045. I mean, these are very, very ambitious. And I want to talk about Diablo Canyon and nuclear but this use you said, we talked about the rate increase from 20 From 20 to 21. But now, you just recently wrote a piece as well, I think it was on March 1 About PG and E requesting a rate increase of 18% in 2023. So these the rate increases we that have been seen already are only a precursor of what's to come. I mean, yeah, what what is this all wildfire, more decarbonisation is all more of the same costs that are being put on the ratepayers?
Jason Fordney 4:02
Yeah, I think the wildfire costs and just really, really playing catch up with maintenance of the system, particularly pg&e. There's been a history here in California, of pretty much allowing them to get the state of the grid into a pretty decrepit state. You know, climate change plays a role. We're having more severe fires. And those those costs are increasingly being put on consumers, which is a sort of change in an approach. But, for instance, here's here's something we found back in 2012. The PUC, the Public Utilities Commission, actually had a ruling where they told pg&e They don't have to inspect their lines this much here in Northern California because the risk of wildfire are as low. That was under Michael PV. I think it's safe to say it was somewhat known as a utility friendly, president of the PUC. He's not here to defend himself. But there's a long history with that. So and I think there's been a history of allowing profits to go to shareholders and they just have not invested enough in the system. But you can also cannot deny the drought, the incredibly dry conditions that we have here that have made the wildfires more severe. decarbonisation, you know, renewables getting a lot cheaper. But from a reliability aspect, I know we're talking rates here, we have our our PSPs as a public safety power shut off. So a lot of factors in play, and not many of them good. So I think it gets down to the regulation. And I think it gets down to the over emphasis on the carbon molecule and less so on delivering affordable, reliable power. And we're sort of living with the results of that now.
Robert Bryce 6:20
Wow, that's really well stated. I like that the overemphasis on the carbon molecule and not enough emphasis on reliability.
Jason Fordney 6:27
Yeah, and it's, you know, this is this is dangerous territory to walk on. Because, you know, climate is almost a religion in California. I understand that. But it's very easy to get on the wrong side of people when you start discussing decarbonisation, and any sort of slowing of that put I don't, people will fight back if you if you draw a direct relationship between power bills and decarbonisation, there are other factors, but you know, the regulatory costs are high. And, you know, we have a surplus in California. So if there's ways to shift some of these
Robert Bryce 7:07
surplus, a surplus surplus of of you're talking about solar, solar electricity, and particularly, that's but that's only for a few hours, right? We're talking about the duck curve here, right? You've got Yeah, a surplus for a few hours in the 24 hour cycle. And that's also seasonal, right. And address by season, but but go ahead. I just wanted to clarify that before he went through before he kept going.
Jason Fordney 7:29
Well, I meant financial surplus from our our budget. Okay, sorry. Yeah, that's the state coffers right now are swollen with money. And we have a lot of federal money coming in. So one concept I've heard people discuss is maybe some of these programs like there's a lot of money going into evey charging infrastructure on utilities that ends up in bills, why not move that out of the captive ratepayer base to the general fund? And I don't know what sort of momentum or discussion is happening on that. But if, if you take a chance and listen in on a PUC public hearing on the pg&e rate hikes, it's just it's amazing. I mean, people are really, really angry. They're upset, they're scared. I mean, people are saying they can't run their air conditioners, they can't run their heat. And for obviously, for low income people, its energy costs are a larger portion of their household bill. Sure. And it just affects them more. And then, you know, California, we'd have the highest gas prices. Food costs are super high. So it's
Robert Bryce 8:41
increasing. You tweet you tweeted recently, you paid 619. Is that right? Yeah.
Jason Fordney 8:46
619 and, you know, we'll see $7 I'm pretty sure.
Robert Bryce 8:52
So I'm here in Austin, I just, you know, I passed the gas field station. I think it was 399 here.
Unknown Speaker 8:57
So you're lucky. Well, right.
Robert Bryce 8:59
I'm not bragging here, but um, you're paying, you're paying 50% More than then customers throughout the rest of the Well, you're in Texas. I mean, it's a different different environment. You have a different gasoline blend and and all the rest of it. But I think that's really interesting that you mentioned I think in some of your, one of the pieces you wrote about the PG and E rate hike, you talked about these people calling into the hearing. And just that there was well, I hesitate to use the word rage, but there you said there was just a ton of anger among ordinary consumers about what they're seeing. And are they directing it at the at the utility commissioners or who should they be directing their anger at I guess would be the more correct question.
Jason Fordney 9:40
Well, a lot of that he is teaching and he is really despised in California for many reasons. I mean, it's a convicted felon. It's killed a lot of people. So a lot of that anger is towards the utility but also the PUC. I I'm struck by some of the people that I hear speaking, I can tell they're not people that are normally tuned into the regulatory world. But they've sought out these hearings, they've sought out who's making these decisions, and they want it, they want to talk to them. And it's everything from young people to elderly people on fixed budgets that are just outraged by their their bills. I mean, it's their bills are extremely high. And when they see them getting higher, they're understandably upset about it. Yeah. It's
Robert Bryce 10:35
yeah, you say outraged by their bills. You I mean, in some cases, you are, what were you saying in some of these? The bills were $500 a month in Oregon. And they they doubled in the last couple of years? I'm not remembering correctly.
Jason Fordney 10:47
Yeah, I think over the past few years, they've really, you've seen a jump and you know, natural gas prices are high. Yeah, that's another one. There's just so many components feeding into it, and all of them seem to be rising. When it comes to blame, you know, the PUC, nine times out of 10 is following legislation, legislative directives. And I think that's where a lot of this flows from. And there's, you know, the utilities have always had a decent amount of political power in California, right. Especially pg&e. So, yeah, that's, I think it's just a combination of factors here. And yeah, we there's been days of hearings, I've not heard one caller. Say anything good about pg&e, or the or their bills.
Robert Bryce 11:43
But can we look back a little bit because I know you've been following this industry for a while and not bragging here anything. But my first book was on Enron. Now it's 20 years ago, it came out and suddenly I feel like an old man, right? But but but Enron gamed the California system. And as I think about it, the California utility sector has been a mess. For decades. I mean, you know, Schwarzenegger came into power by running again, against Gray Davis about electricity prices. So is there something else that I mean this, isn't it? I guess what my point is, is that there's this isn't a new phenomenon. This has been going on a long time, but it seems like now it's coming. I hesitate to use the word crisis. But I think that's the right one that that you have the consumers finally saying this is his crazy town. But why has it gone on so long? I mean, can you answer that when PGE needs taking bankruptcy twice in the last 20 years? What Why? Why, what? How do you how do you explain that?
Jason Fordney 12:41
Well, you know, you had the first power crisis, which caused California to pull back from restructuring back to a monopoly system. We're always in crisis mode here. That's just the way it's been. And honestly, utilities have a lot of power in state legislature. I've, I've been sitting in the halls myself. This was probably a couple of years ago, and a certain Assemblyman came out and said, I just heard from St. Anthony, from SCE Southern California, just let's get to work. So it's pretty clear. And I was standing there with a staffer, and she's like, I know, there's a reporter standing here. But that was kind of enlightening. And you know, there's, they put a lot of money in the political coffers and investor owned utilities are huge. They have a lot of political power. And it's only recently the past few years, I think we're things have gotten so bad that politically it's starting to become more of an issue. But, you know, you don't see much action from the legislature on on these costs. For instance, you know, we have a 51 cent per gallon gas tax in California. Right. And there was recently a lead, which is which
Robert Bryce 14:00
is incredibly regressive, right. I mean, who's gonna this increases the energy burden on low and middle income folks, far more than on people that and no burden at all on the Tesla driver. Right. That doesn't matter to them. Right. But for the tradesmen that people that commute to people that don't work in the keyboard economy to use Jennifer Hernandez his line, I mean, this is terrible for them.
Jason Fordney 14:19
I know and, you know, I live in a rural area. I live in a welfare country out here in Nevada County. And I see this, you know, California 5% of California is rural residents, compared to an average of 19%. Nationally, I just happen to be looking at this from the Lawrence Berkeley Lab report on solar demographics, right. So the rural population in California has very little on zero political weight. And it's dominated by not to get political, it's dominated by urban liberals that are very For good reason concerned about climate change and pollution, but rare in rural areas is people are definitely being left behind. You know, I just saw an editorial today about, you know, stupid people that drive big vehicles. He mentioned SUVs. This is San Francisco Chronicle, basically complaining that gas prices aren't high enough, you know, there's a punitive attitude towards energy use in California. And you're right, it goes straight to the lower income people out where I live, you know, I drive a pickup truck, it's a six cylinder, but we have a lot of recreation out here. You know, I just things I need to carry, I can't drive a Prius, I can't ride my bike to work. Right. And nobody around here can't. We have long distances. You know, it's a 25 minute drive to my daughter's school. So you have to drive longer distances, tradespeople out here, they need big vehicles. We have a massive amount of forest work and tree cutting going on here. So yeah, it's just the political climate is really dominated by the urban population. And that's one one reason for it.
Robert Bryce 16:26
Well, I'd like to follow up on that, because I've also interviewed Assemblyman Jim Cooper, who's from Elk Grove and I've written about him in Forbes and he's pointed out that what what is it that one of the Bay Area, Senate districts in California has collected more Evie rebates than the nine lowest income senate districts. So if memory serves the nine and seven or nine lowest income senate districts in the state, that the concentration to your point about this idea of you know, we you know, people should be driving EVs Well, that's easy for people who live in the Bay Area who don't commute very far don't carry lumber, timber, and you know, snowmobiles, or, you know, pull a bass boat, it's easy for him to say, but they're not the people who are the tradesmen as you point out, because that seems to me, they're the ones that are really being hammered here, not just by the the high motor fuel prices, but by the high electricity prices. So I'm just making that observation. But I just thought, you know, it was something that that Cooper has caught called out last year, I think, or the year before saying this is just fundamentally wrong in terms of equity and in the system.
Jason Fordney 17:32
It is it's a big issue. I deal with a lot in debate with people a lot. You know, we have the solar net metering dispute that's going on right now, I did an editorial on it, saying the conversation needs to grow up here. There's a lot of demonizing that goes on, towards fossil fuels, fossil plants, and it's really gotten to a kind of a ridiculous point, you know, you see a lot of college educated, I'm gonna say white, because demographically this is true. college educated white people that are obsessed with climate change. And again, for good reason. But there's a very little consideration given to lower income people, trace people, rural people. I mean, the culture in California, is driven by, you know, the tech industry in San Francisco. And, you know, if you look at these demographics, like the the Lawrence Berkeley report that just came out, the median income of solar owners is six digits right there. 6% of home solar owners are black people. So there are clear disparities here, but as soon as you start getting into this, there's a lot of defensiveness, a lot of pushback. The net metering conversation, in particular, if people aren't aware is the PUC is basically cutting the net metering payback for solar owners, right. And when you start looking at people that drive EVs have a Tesla battery in their house, solar panels are all homeowners, you know, rent renters aren't putting in solar for obvious reasons. Right. So when you have state programs that are kicking all kinds of free goodies, to wealthy people, it's an issue you know, there's nobody in an apartment in Sacramento when I'm working class job that's benefiting from these policies. Right. I have friends I have friends that you know I have a friend is His household income is $30,000 a month. And he's waiting for his free Tesla battery. It's just wrong, you know. And, again, I think it's things have gone off the rails a little bit with with these programs. And when you try to address it, you know PUC is just getting hammered. Anybody that questions this is getting hammered.
Robert Bryce 20:24
Right. Well, and let's let's talk about that solar rooftop issue, because I've written a little bit about that as well. And remembering Ashley Brown from the Harvard electricity project, he called the solar solar, rooftop solar, he call it Robin Hood in reverse, right that the poor subsidizing the rich? And it sure seems like that that and yet, and yet the effort to defend the rooftop solar, I think Arnold Schwarzenegger had a piece in The New York Times. I mean, the solar industry reacted to it with a very aggressive PR campaign to try and oppose the this rollback that you were talking about? Explain it. Can you explore that a little bit, because it seems like the the the media effort that the solar industry put on to defeat the rollback of the net metering was really quite effective at appears?
Jason Fordney 21:13
It really was, and it was quite dramatic. And I do have to say, I don't have an opinion on this. I do cover it. You know, I'm an objective journalist. I did write an editorial about the debate itself. Are we having an honest conversation here? Which I don't believe we are. We'll
Robert Bryce 21:30
explore that because you said what it was that we need to grow up about it what how do you mean,
Jason Fordney 21:35
I think that we need to stop this good versus evil approach. And this is my opinion. You know, the, again, the demonizing the any basic attitude that anything that holds solar back in any way is bad? Well, when you're talking about grid planning, when you're talking about allocation of costs, that's just it's one dimensional. And that's, that's not the way to go about it. So yeah, when you have Hollywood actors, there wasn't just ARNOLD It was Mark Ruffalo and Ed Norton. I mean, Mark Ruffalo called out Ralph Cabana, from NRDC, by name. And, you know, he's got millions of Twitter followers and said, Go give Ralph Kavanaugh hard time. I asked Ralph about this. You didn't want to talk about it. But so yeah, it's um, you know, I use the superhero metaphor in my column. Everybody likes a good versus evil is simple. zeal, the evangelistic zeal among the solar climate community is gotten and as my opinion has gotten a little bit out of hand, and any, any questioning of it. I mean, the PUC to say that the PUC is anti solar is completely ridiculous. I mean, the PUC is passing everything they can, right on decarbonisation, and mostly driven driven by legislation. Right. California Energy Commission is now the California decarbonisation commission. I mean, we know this. And you do your they there are programs, there are conversations that happen with the regulators, but they're under so much pressure and high level pressure on this issue, that it's going to be very difficult. They were they had this proposed decision that was going to cut the payback. The CPUC President departed, I think there's various reasons for that and was replaced by Governor nuisance energy advisor who pulled it off the agenda. We have to revisit this, I think it's safe to say, you know, they're going to be more in the political direction. Unfortunately, in California, you don't have the balance. You have a very unilateral political environment with the legislature legislature
Robert Bryce 24:08
dominated dominated by the Democratic Party.
Jason Fordney 24:11
Right. And again, I don't want to get political I just as a as an energy journalist, I look at three things. I do look at decarbonisation, we write about it all the time. In fact, I've been not accused but we've had some reader feedback, you guys are too focused on decarbonisation. But affordability and reliability are the other two legs of that stool, right. And unfortunately, particularly in the media. We have a lot of younger journalists coming in that are completely focused on climate change and are really focused on stamping out fossil fuels. I totally get it. I just think when you're talking about a trend position like this, you've got to do it carefully. You can't crush the working class you can't crush low income people with with your decarbonisation strategies. And you know, we haven't even gotten into the the reliability issue that solar has created in California, which is almost sacrilegious to say, but it's the ramping issue is, is incredible.
Robert Bryce 25:25
So let's, let's talk about that. Because one of the things that, and I've written about this, I had a piece in Forbes, oh, I don't know, a couple of weeks ago talking about, you know, what happened here in Texas. And of course, you know, we had a big blackout in February of last year. But because of this massive amount of new solar and wind that is proposed, and potentially going to be on the ERCOT grid by the end of next year, what the ERCOT is expecting is almost as much solar to be installed in Texas, as now exists in California. So we're facing a similar kind of issue, but it talks about the ramping issue there because, and explain what you mean, there if you don't mind, because I think a lot of listeners don't quite understand this idea. And and and also, you're talking about ramping, so this is involved with the duck curve, right? This this idea of about a massive amount of solar and then suddenly going away if you don't mind. Just explain that briefly.
Jason Fordney 26:13
Yeah, it's it's fairly simple. We have a huge amount of solar in California, both rooftop and utility scale,
Robert Bryce 26:22
something like 30,000 Mega megawatts, right, something like that.
Jason Fordney 26:25
Yeah. So the rooftop solar is not visible to the ISO, the independent system operator, which operates and dispatches transmission, their generation and runs a transmission system. So rooftop solar shows up as a demand reduction. The problem is when the sun goes down, and everyone goes home, to cook dinner, and turn their lights on, is precisely when all the solar is coming off. And that deficit is made up with natural gas always has been an imports. Imports are dwindling in California, there's less available power in the neighboring states. So what you have is I don't know what the ramping level is now it's it's gigawatts and gigawatts where the system and these plants are not designed to run this way. The system has to ramp up dramatically in the evening hours, which is when we see the problems. And in summer when it's hot, and air conditioning load is so heavy. That's when the problems happen. That's what happened in August 2020. So when you talk about ramping your
Robert Bryce 27:39
imports weren't available from other states because they had their own power demand to meet.
Jason Fordney 27:45
Exactly. And you say, Western Heatwave, right.
Robert Bryce 27:48
And you said imports are dwindling. I know California has long been one of the biggest importers, it has long been the biggest electricity importer of any state. I didn't realize that the availability of the imports was declining. I didn't it how much so?
Jason Fordney 28:02
Well, be tough. I can't really put a number on it over my head. It's just something that I've heard repeatedly from there is so you know, there's there's more renewables being built in surrounding states also, and I don't want to pin this all in renewables, there's a lot of different factors, right. And then, with all the wildfires, the transmission system is also inadequate. When we have fires, it takes down a transmission line. We came very close. This past July, two more outages were really on the edge. The grid is always running on the edge. So yeah, imports dwindling, increasing wildfires affecting the transmission lines and based baseload generation going away, we're going to lose Diablo Canyon. That's creating a lot of nervousness. A lot of pressure on the EU, the regulators to get rid of gas plants. And I'm not arguing in favor of one technology or another but I do have to take an honest look at the reasons for this. One thing I found very interesting was there is a high level CPUC official, who told me that for years, the legislature has pressured the PUC to keep a reserve margin as tight as it can. Because they don't want excess capacity. There was there was controversy about we had too much capacity in California a few years ago. Right. So again, the legislature you know, why aren't you getting rid of these gas plants? regulators need to balance and then the ISO is kind of has to make it all work and the ISA was just jamming all kinds of levers, gum, chewing gum and you know, doing everything they can
Robert Bryce 29:56
spit, baling wire and duct tape. Yeah, the whole thing. Yeah, yeah. And
Jason Fordney 29:59
unfold. Suddenly, our market is now so complicated and ever changing, that that's creating issues too. With the price signals. We don't really have a really functioning market. You know, it's your hair Commissioner Danly at FERC, just railing on this, you know, why are we investigating California? At what point? Can we say it's a crisis, you know, we've got the highest bills, we've got terrible reliability. And, you know, decarbonisation is great, but it's an example of some of the negative impacts. When you're talking about Texas, what was so ironic to me is Texas has the opposite political environment to California. And the problem with the that February freeze was gas plants, you know, gas plants freezing up. Again, they had, I found a NERC report from 2011, when they had a similar problem saying, you need to improve your system because of freeze ups. Right. So that, you know, I saw people California and saying, oh, you know, look at Texas, you guys with, you know, you're conservative, you're low regulation, you had the same problem. So we have sort of different ends of the seesaw here.
Robert Bryce 31:28
But the same, but the same result with regressive impacts on the low and middle income people, right, the less reliability more people. I've been watching Generac, right, the standby generator company, and in their own investor reports are saying, hey, business is booming in Texas in California, I mean, so you mentioned Diablo Canyon, I'll come back to the standby generators in a moment. But just one of the things I wanted to talk with you about, to me, it seems just like energy suicide for California to close Diablo Canyon. That's my opinion. And I'm just gonna, and I think it's a fact I just think it seems like just incredibly short sighted and being pushed by you mentioned NRDC. They're the one the big, big promoter of this closure. In Alaska. I'll ask the question is, is Diablo Canyon going to close as are beginning closure beginning in 2024? As is now planned?
Jason Fordney 32:24
Yes, I'm fairly certain it will.
Robert Bryce 32:29
Despite everything that's happened in the last few months, despite the Ukraine crisis, despite all the reasons why it should stay open, they're going to close it anyway.
Jason Fordney 32:37
Yeah, it would be a miracle for it to stay open. You know, it's never been a popular facility when it was opened over huge demonstrations, right? It's, it's on the coasts, there's fault lines, people are afraid and what might happen if there's an earthquake. There's a massive settlement that was done. NRDC was the main player in that to, you know, replace the resources. I just, I think that ship has sailed, we had dueling editorials, we you know, there are people out there saying keep it open. We ran an editorial on that NRDC responded with their own saying, No, this is a carefully crafted settlement. These concerns are not valid. But yeah, it's going to be interesting. I mean, that's, we rely on that plan. It's just the truth. The Holy Grail is supposed to be storage. You know. That's all you're here Casio talking about right now is they're really blown out the storage capacity. But that's only four hours and will it be fully charged? You know, it is starting to make a difference. It's still a very small portion of our supply, though. Right? So
Robert Bryce 33:56
we you had something was in in Twitter or on Twitter. And by the way, let me just quick station identification here, as they say in the radio business, and my guest is Jason Fortney. He's the editor of California energy markets. I've admired his work for a long time. He's on Twitter at at Fortney energy at Fordham energy on Twitter. So let's talk about batteries. Adjacent was Texas now. I'm sorry, California. 2600 megawatts of capacity, something like that. Is that right? Yeah. Approaching that 27 Is that 2600 megawatt hours? Is that right? Or I see them once named nameplate and but then how many hours of storage because that's the really the operative
Jason Fordney 34:36
issues. It really is. We're going to need long duration storage. And we're going to need different technologies. This is all overwhelming the lift lithium ion which has several issues to it. You can look on that little
Robert Bryce 34:52
clipping that little fire thing that keeps Yeah, tell me about my senses. We're on that what's the status with moss lane? During his Moss Landing come back into into operation. This is the big lithium ion battery facility and Oh, I forgot where it's located. It's owned by VISTA, though and it was shut down several months ago after a fire and then they restarted it. And they had another some thermal problem more recently. Is that right? But it's still not back online?
Jason Fordney 35:21
No, it's still offline. Yeah, a bit of a bruise. It's I think it's the big energy storage facility in the world. It's 400 megawatts total of one phase one is I forget which one but one is 300 megawatts. The other one's 100 megawatts. The fires was actually caused by a sprinkler system that engaged and it wasn't really a traditional lithium iron ion problem. It was the sprinkler system problem. And they're very sensitive about this. But um, yeah, what can you say the facilities have been offline for months. There was a lot of fanfare around it. But it wasn't like in Arizona. You had the exploding facility there that almost killed some firefighters. Right. Looking at their injuries. I couldn't see how they never be the same. They were blown into a fence. What happened with that? When was gasses built up? Firefighters showed up open the door it ignited blew up. That was a bad one.
Robert Bryce 36:37
was when was that one? I'm not I vaguely remember this
Jason Fordney 36:40
is just a couple years ago. Yeah. It's been within the past couple of years.
Robert Bryce 36:44
And it was lithium ion again. Yes,
Jason Fordney 36:47
yeah. There's lithium ion facility that was more traditional. You know, everybody knows that they exploded happens with laptop batteries. Right? It's it's a bit of a problem, to say the least. But you're seeing more money going into other types of battery technologies. I think that'll be that'll be key also.
Robert Bryce 37:09
Right. Well, you last month you tweeted this. You said? This is why it's disturbing that first we have so many outages in California. And second that there is such a blase attitude towards reliability. Well, decarbonisation is the constant overwhelming focus of the discussion among lawmakers, regulators, media, etc. Why is there a blase attitude toward reliability? Hasn't that led to a surge in Stan? And then my question is, well, that's led to a huge surge in I talked about Generac. A moment ago, in standby generator deployment, I looked at a report that Bloom Energy published recently that was talking about the number of large diesel gensets being deployed in the Bay Area. I mean, just huge numbers increases in, you know, the double digit percentages in one year. That's just that California is particularly industry and industrial operators are looking around and saying, Hey, we can't rely on the grid, we're going to make our own.
Jason Fordney 38:04
Yeah, absolutely. And these are all for data centers are overwhelmingly for data centers. They're almost always diesel. And I did a column on this that Sammy Roth over at LA Times was nice enough to put in his newsletter. We we got a lot of attention on this. I was just writing up the M dot cube study. Right? Yeah. A really interesting situation this, the guy that did this study his daughter, they proposed a big diesel genset right next to his daughter's school, and he started looking into it. I've definitely seen a tendency to not cover this up, but definitely not pointed out. We can't get numbers on how much these generators are being run. You know, some people say, Well, they're just backup for when the outages go go out. Well, they test them a lot, too. Yeah. But yeah, the diesel capacity between Los Angeles and San Francisco is equivalent to 15% of our total grid capacity. So you have a very sketchy grid. And companies just building diesel everywhere, particularly in the Bay Area, because they know they need the power. I started looking into into this, you know, in Europe, they don't have to do this. Because they have a more reliable system. It's a little bit of a you know, and again, my stuff on Twitter is my opinion. If you read my coverage, I don't I don't put my opinion into the coverage of my editorials. I want to be clear on that. And sure, this is all my opinion, not the opinion of my employer or anybody. But it's a bit scandalous to me. And the kicker for me was the one of the representatives or suddenly men or senators from the Bay Area, introduced this legislation to ban and gas powered generators, which I have one, everybody around here has one. So at the time when the grid is getting worse and worse, they're banning the primary source of what people are using to keep the lights on. I mean, I moved here in 2017. I found myself with our first PSPs. I mean, I had, I have a wife and daughter, it was cold. I had to go buy a generator of luckily, I can afford $1,100 generator. And you know, we spent days running our fridge and stove certain survival mode. And now they're now they're taking that away. So it's just a almost cruelty that I see here. When you have a bay Bay Area legislator, outlying equipment that people absolutely need and rely on. They'll find ways I mean, people out here this is gold country, they're very resilient, they will find they'll go to Nevada and buy one. But
Robert Bryce 41:06
so did that measure passed the one that was proposed on the banning of passed the assembly and was signed into
Jason Fordney 41:12
law. Yeah, yeah, it's, uh, oh, my God. 24 to 25. Yeah, you won't be able to buy a gas powered generator,
Robert Bryce 41:23
or an internal combustion engine for your vehicle or a vehicle with the standard standard engine. I mean, there's going to be a great business for auto dealers in Reno. And that's seems like that's obvious to me from where I'm sitting. But I don't you know, I don't I don't live there. I mean, it's Yeah. Is that is that? Well, let me ask you about that. Because you mentioned your daughter, I'm our oldest daughter, Mary just moved to Los Angeles about a year ago, and she likes it there. But is this going to a lot of people are leaving California in California last legislative a congressional seat for the first time ever, in the in the last after the last census? Or do you know people are leaving the state? And are there a lot of them? Do you? How do you how do you what's your sense of the migration pattern?
Jason Fordney 42:06
Well, I've, in my area, the fire problem is a primary reason. People move here and leave. I've seen it over and over again. Fire Season is really tough around here. The smoke was just, I mean, went on for weeks, literally, I live up in this era, 5000 feet, it's just a wall of gray. You know, as far as you can see, it's the disaster zone. So that in my area, that's been a big reason for the migration. And you just it's an incredibly expensive place to live. Our food costs are high or gas costs are high. There's very, again, a very unilateral political environment. People are frustrated that it's just a one way, one way street. And I don't know what point it will people get so frustrated that there's political change, but you know, it's it's a tricky one. And yeah, a lot of people leaving, it's just a tough place to live. It's a beautiful state. It's a spectacular state. And I think people are willing to live here for the recreation, right? The the environment, but you're paying a big premium to live here. Right? There's no doubt about that. And people are, you know, getting priced out,
Robert Bryce 43:23
right. Yeah, Mary sent me a photo. She filled her car the other day and sent me a picture of the gas pump. And I think she was that time she was paying 575 or something. And I talked to her later she said, Dad, you know, you're right about this energy and power stuff. We will love you sweetie. I'm pleased to hear that from you. But tell me about your situation. Jason. Because you live off the grid you live on in you said you lived. You live at 5000 feet and you you rely on solar panels. Propane and batteries are using LED acid batteries. What tell me Give me the dimensions on your your system there. If you don't mind. I geek out on all this stuff.
Jason Fordney 44:00
Yeah, it's Firstly, I'm gonna say it's not my system. Okay, I live I live in a property. Sort of I don't want a sort of a communal property. My friends on this system? Yeah, we have a pretty large solar array in the lead acid battery system. I'd have to check on the capacity. I have it written down somewhere. No problem. But we and then we have two sizable generators, and not like your little Honda generator. Yep. But we run those all the time. And I could not see us running on strictly the solar and battery. And we don't use that much energy. There's only a few of us. So, and we got a quote to expand our system, it was over $200,000 Wow. So there's a there's a disconnect here. If people are saying, well, everybody just gets some solar and battery is until you put it into practice, you'll realize that it's number one out of touch for most people, right? And number two, you're not going to have the power that you need to to power a traditional American lifestyle. We'll get there. I mean, the technologies getting cheaper and cheaper. But at this time, it's premature to expect people to be able to do this. Yeah.
Robert Bryce 45:26
So have you calculated what your electricity costs? Are there? Have you ever done that math on that?
Jason Fordney 45:32
I haven't, you know, we'd have to look at our propane, Joe to. So I don't, I don't really know what it costs. I know. For instance, in the big January storm, we still had power, all right through it. And up where I lived, there was a lot of people suffering. I mean, I was picking up people on the side of the road that hiking out from their houses, we had five feet of snow. It was it was crazy. So yeah, the people really suffer when it's cold, and the power's out, and maybe not enough attention really be being paid to that. That's why when I first came here, I remember tweeting, you know, decarb is is important. So is affordability and reliability. And that was kind of nobody was talking about reliability in California until August 2020. And then the media, when that happened, the media started paying more attention. And I've seen a little bit of a shift, because overwhelmingly the California media are, you know, climate, heavy rain. Proponents, which again, I get that, to me, it's about, we have to manage this in a way and not punish people for using energy. Because we all we all use it and there's no need to demonize car drivers, and you start to get I just posted this morning, I'll probably get in trouble. You know, I was I have to watch it on Twitter. But um, because I don't believe we should be doing strong opinions about the things I write about as journalist. But you know, I try to keep a balance there. But there's an elitism that comes from people in urban areas, sayings, park your car, don't use propane. I mean, everybody out here runs on propane. Sure, it's the local gas companies terrible. But you can't just take away these energy sources and tell everybody to drive an Eevee there's no chargers out here, you know,
Robert Bryce 47:42
and they're in there. And there won't be
Jason Fordney 47:44
well, hopefully more. I mean, there's a lot of efforts to build infrastructure, and I've seen them talk about rural charging infrastructure, but at this point, you know, you can charge at home, but, I mean, we have a lot of outages here. Sure a lot if you started looking at it, you know, we have PSPs is and then we just have our good old normal outages to so to ask people to depend on their electricity to drive their cars at this point, not not tenable in this area.
Robert Bryce 48:17
Sure. So, just a few more questions. And again, my guest is Jason Fortney. He's the editor of California energy markets. You can find him on news data.com He's also on Twitter at fordney energy. So Jason, imagine so I just been appointed King and I'm gonna make you the energies are in California would what would be the first things you do?
Jason Fordney 48:42
Oh, gosh, I never really thought about that. Let me think.
Robert Bryce 48:45
And maybe I met different given what's the potentate I want. Putin isn't wants to be the new tsar. I'm not going to use czar anymore. If you're the Energy Master, you're the energy supreme Commandant in California, what would you do? Would you know, would you keep Diablo Canyon open?
Jason Fordney 49:05
Man, you're really putting me on the spot there. I don't think I can a pine on that because I do write about it. I would say I have to speak more in generalities. Okay. I would say let's do this in a way that makes keeps energy affordable. I one thing I would do is like I said before, I would stop putting so many state programs on the backs of utility ratepayers, which is also a shrinking customer base because we have a massive migration to Community Choice aggregators, right? Which when they first started, they tended to be in wealthier areas. They have boutique green energy options. Do you want to pay more for green? Oh, yeah, sign me up because they can afford it. Right. Well, you have a shrinking traditional utility, race. Yeah, that is increasingly flooding the costs for the state programs. That's one I would definitely I guess I'm safe on this, I would repeal the gas tax, you have a state surplus, why put a 50 cent gallon, you know, hammer to the everyday consumer? Um, you know, in terms of the electricity grid, it's tough the toothpaste is out of the tube in terms of natural gas in California. I mean, the environmental groups are just on it 24/7 Getting rid of these gas plants. I would just say, in general, if there is a way, I mean, we I understand climate change, I don't want to get give the impression that I don't recognize the urgency, especially coming to California, as climate change is much more in your face. And when I lived in the East Coast, or it's more of an abstraction, you know, we're living in a place where it's blazing sun for two, three months straight without a drop of rain. I've witnessed the drought, you know, crazy wildfires. I mean, I live 60 miles from paradise. I know people that had lost their houses in paradise. And you can, you can put a lot of that on climate. But I would say let's manage this transition in a way that is fair to lower income people keeps costs reasonable. And you know, I've certain thoughts about PG and E. You have an investor on utility, where people are making money off of basically it's safe to say a criminal organization. For instance, the bankruptcy, there was a lot of people on Wall Street made a lot of money on the bankruptcy, where you have homeowners in this area that still haven't seen the time and had their house burned down. A lot of outrage over that. So yeah, I have to keep it kind of general. And I don't want to give people the impression that I have an agenda as a journalist, right. But uh, as an editor, I am able to write editorials. So I'm able to get my opinion out there. And, and I do it on social media too. Occasionally, you know, people get angry. But again, once you're up against the, what I call the zeal here of the environmental community, it gets touchy really quickly.
Robert Bryce 52:29
Right? So just a couple of last questions and Jason but I completely agree with you on the affordability that there has to be some balance in terms of this, you know, effort but which is what I wrote in my piece in the journal so there's two more things so what are you reading these days? Ya know, your your job keeps you busy. And I'm you know, you told me you do a lot of things outdoors. In books that you're reading recommend these days. What do you what do you have on your bookshelf?
Jason Fordney 52:58
Well, I read a lot of newspapers. I do our clips here. I'm not reading much on energy. I'm reading a nice anthology Jack London short stories.
Robert Bryce 53:10
To build a fire and the the rest of those Yeah, right. There's Yeah, six. Yeah,
Jason Fordney 53:14
I started with his earlier stuff. I spend a lot of time imbibed in the California media worlds. So I'm pretty, pretty tuned into that. Not really reading much on energy in terms of
Robert Bryce 53:30
that's fine. That's why I'm not not hope not holding you to that. I don't care whether it's energy, non fiction, nonfiction. Just curious about what's on the what's on the what's on the list.
Jason Fordney 53:40
Yeah, you know, I tried to keep track of how energy is being covered and presented in California, right. And these issues are all front and center for me. So I read a lot of editorials. A lot of, you know, the Chronicle LA Times to occasionally communicate with other journalists. And then I just spent a lot of time writing. That's, that's a lot of our focus here, obviously, sure, no, increasingly, podcasting,
Robert Bryce 54:13
and you produce a lot. So the last question, Jason. I mean, what we covered and as I think about it, sometimes I mean, the challenges in California are just enormous. And you have all these competing interests and you know, the rural versus the urban, etc. So the question is this, what gives you hope?
Jason Fordney 54:33
Oh, gosh, you know, it can be really grim covering this industry. We spend a lot of time on wildfires, a lot of death. What gives me hope, gosh, I don't know I guess what gives me hope is that we'll change this the some of the dynamics here and that if, if, if people in the environmental groups As the politicians could be a little bit more tuned in to the needs of everyday people, that'd be great. But man, it's it's tough to be optimistic about too much here. And I hate to be negative, but, you know, we have a lot of problems. And, you know, I guess I, here's one thing as seeing a lot more collaboration. You know, we have a movement towards a regional wholesale market in the West, which I think will happen eventually. You we have a California wholesale market, and then a lot of non RTO stuff. We have the energy imbalance market, which is a regional market, but it's it's just a balancing market. So I think what I'm seeing a lot more collaboration between the western states on on these issues, mainly on markets, and the function of markets is integrating renewables in an affordable way. I think that'll help. And I think there's a lot more collaboration happening in the West, Elliot Mainzer, who's the fairly new CEO over the independent system operator is really focused on this. And so there's more synergy, traditionally, there's been a lot of mistrust of California by surrounding states. And so that has led to really a lack of collaboration in planning. So I do think we'll see improvement in that and developing a wholesale market that will allow more efficient dispatch and hopefully solve some of these problems.
Robert Bryce 56:38
Good. Well, that's a kind of a wonky answer. But it's, but it's a wonky system. Yeah. No doubt about it. But we can stop there, then I think that's a good you know, summary. I mean, it is incredibly complex system. And as you say, you know, California's grid and the operation of it is incredibly complex, but I have been following your work for a long time and admired it for a long time. So appreciate you coming into the on the podcast. Pleasure. And again, my My guest has been Jason Fortney. He's the editor of California energy markets. You can find out more about him at news data.com. Follow him on Twitter at fordney energy. Jason, thanks again for being on the power hungry podcast.
Jason Fordney 57:17
Thanks very much, Robert. It's my pleasure. Great to have you
Robert Bryce 57:20
and all of you in podcast land. Tune in for the next episode of this podcast right here. On this same stay on the same channel. Until then, see you