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Listen in as Dan Catchpole and Jason Fordney discuss highlights from the energy industry on the northwest and west coast. This episode was recorded on April 4.
NewsData's "People in Power" is an exciting new biweekly podcast that explores issues in the energy industry, featuring expert guests from a wide range of backgrounds. Hosted by veteran energy journalists Jason Fordney and Abigail Sawyer of California Energy Markets and including appearances by writers from sister publication Clearing Up, People in Power will explore trends such as development of a Western wholesale electricity trading market, the transition to a more electrified world of new infrastructure and transportation, renewables integration and reliability, wildfire response and mitigation, and many other topics. "People in Power" draws from an unprecedented pool of expertise and insight in a way never seen before! It's available on all major podcast platforms as well as at www.newsdata.com.
Intro:
Welcome to NewsData's Energy West, a podcast about the energy
industry today and where it's going tomorrow.
Dan Catchpole:
Welcome listeners, and thanks for joining us on the NewsData
Energy West podcast.
I'm Clearing Up's Dan Catchpole joined here with my cohost,
editor of California Energy Markets, Jason
Fordney. Jason, how are you doing today?
Jason Fordney:
Good morning. Dan, how are you?
Dan Catchpole:
I'm doing well, thanks.
But you didn't answer my question.
How are you doing?
Jason Fordney:
I'm doing good. I had a great weekend.
I went to a big April Fool's outdoor party with some really fun
people.
A lot of parents from my school.
But yeah, a guy that had been living there for 42 years had some
good stories about rural life in
NorCal. Yeah, had a giant bonfire.
Lit that thing up and...
Dan Catchpole:
I did not know April Fool's parties were a thing.
Jason Fordney:
They are with this group.
Dan Catchpole:
I feel like that's the thing you send out invites to, and then
there's no party.
That's the point.
Jason Fordney:
Right. How do you know?
This one's been going on for like 20 years or something.
Real fun, you have some, a lot of unique people.
I learned something he told me.
One of... He was burning a fire, and he threw a piece of plywood
in it and happened to be a state air board person driving
by who saw the plywood and stopped and came up his driveway and
said, "You know, it's illegal to burn dimensional lumber in
California." And fined him $250 for burning that piece of
plywood.
Dan Catchpole:
Wow. $250.
They just do that.
They just drive around, and they see it.
They just stop, and they can write.
I didn't know air quality board people could write tickets like
that.
Jason Fordney:
It wasn't CARB.
It was a pollution board.
But yeah.
And he didn't fine him on the spot.
But yeah, it turns out in California you cannot burn anything
except natural wood.
This is what I was told.
I haven't verified this folks, but apparently dimensional lumber
because it's treated, gives off c
hemicals. Anyhow.
So I learned something this weekend.
How was your weekend?
Dan Catchpole:
It was good. It was quiet.
It was pleasantly quiet.
The kids had some sleepovers.
Went to church.
My son had his first soccer game this season.
They lost like 20 something to one, but he had fun.
Well, he's seven.
I'm not sure why they even bother keeping score.
And to be fair, he was playing against the U 12 National
Brazilian team, so.
Not really. No, just kidding.
They were playing against a bunch of other seven year olds who,
it was not their first game, apparently.
Jason Fordney:
Sounds like it.
Dan Catchpole:
But somebody did send me a screenshot of a post they saw on
Instagram, wherever.
Somebody was asking, "What position is it when my son plays the
whole game just looking for a four leaf clover?"
Jason Fordney:
Yeah, the searcher.
Dan Catchpole:
Yeah.
Jason Fordney:
Well, it's about fun at that age.
Dan Catchpole:
Yeah, no, it is.
It is. And he and my youngest, my five year old daughter, are
starting a little
league in T-ball soon.
So, very excited about that.
Jason Fordney:
You spend a lot of time watching some fun games.
I can't wait for that.
My daughter's seven, she's not on any team sports yet, but she's
raring to go.
Dan Catchpole:
Yeah. Blessing and a curse, because schedules get more
complicated.
Jason Fordney:
Oh, yeah.
Dan Catchpole:
But speaking of complicated topics, I'm going to use that as my
segue into my top story for this week.
Top officials at five federal agencies say that the status quo
is not working for managing all the competing interests in the
federal Columbia River hydropower system.
So the White House put up a recent blog post on which these
officials from five federal agencies said, We cannot
continue business as usual.
Doing the right thing for salmon, tribal nations and communities
can bring us together.
The post didn't layout any specific policy changes, but it did
seem to indicate that the Biden administration is open to
rethinking how endangered salmon and steelhead are managed in
the Columbia Basin and possibly even rethinking the
future of the lower Snake River dams, which are on a major
tributary of the Columbia.
There's a lot of people in the region, environmental advocates,
advocates for fish, some tribes who want to breach the
dams, a lot of other people, public power advocates, navigation
advocates,
irrigation, recreation, say leave the dams in place.
Very controversial issue the federal agencies have been holding
government to government meetings with Columbia
Basin tribes, or they did hold government to government meetings
with Columbia Basin tribes on March 21st, where they heard
support for breaching the four lower Snake River dams, as well
as requests to fully fund fish and wildlife
restoration and take some other steps on the snake in Columbia.
The White House Council on Environmental Quality has been meeting
with environmental advocacy groups, tribes, state and local
governments and others since last fall, as clearing Up recently
reported, to talk about the hydropower system's future
management. And while all of this has been going on, a group of
Republican lawmakers from the Northwest is pushing back and
demanding the White House go on record about what it's up to and
whether it wants to see or is
considering changes to the current framework for managing the
Columbia River Basin System.
So listeners, you can read more about this at Clearing Up.
That's the latest story is from my colleague Casey Mahaffey.
And she and I have been both been doing some coverage on this,
and certainly we'll be doing plenty more in the weeks and months
to come. And I would just quick note, the five federal agencies,
if anybody for those playing along at home,
as the Secretary of the Interior, Deb Haaland, Secretary of
Energy Jennifer Granholm,
Assistant Secretary of the Army for Civil Works, and then
someone from the C
hair of the Council on Environmental Quality, Brenda Mallory and
Undersecretary of Commerce for Oceans and
Atmosphere, and NOAA Administrator, Richard Spinrad.
So, all right.
Jason Fordney:
I know there can be a lot of passion around those dams.
Dan Catchpole:
Yeah, to say the least.
Yeah. I mean, you drive around Seattle, and I see every once in
a while a sign calling for taking the dams
out. Dams that are hundreds of miles away from here.
Jason Fordney:
And you know, I heard one environmentalist that was at a hearing
that was in D.C.
It was a dam issue.
And, you know, there were certain congressmen fiercely defending
these dams.
And he said, you know, "Dams are not monuments.
They're river management tools." But I think that there can be
sort of an attachment that's
grown to them that might affect the issue.
I don't know.
Dan Catchpole:
That is a great way to look at it.
Yeah. I mean, any time you have a huge structure like that, it
almost takes on some.
I'm not sure what the right physical term for it, but like the
momentum inertia, I forget what I'm trying
to hearken back to my taking physics in high school.
But it just takes on some life of its own just because it's such
a huge structure.
Of course, these also are public powers so ingrained in the
culture in the Northwest and in the economy.
But the post concludes, by the way, with a request for
information from the public for anybody who wants to share it
with the White House.
You can send an email to salmon@ceq.eop.gov
. So, Jason, what do you have for us?
What's your top story this week?
Jason Fordney:
Well, this week in California Energy Markets, our lead story has
to do with an audit by the California state auditor
on wildfire management plans.
Some kind of alarming findings from the state auditor.
He was auditing the California Public Utilities Commission and
also the Office of Energy Infrastructure Safety.
And what he's looking at is their process for approving wildfire
mitigation plans, which are kind of
an ongoing developing topic here in California.
But what he said was the state needs to do a better job ensuring
that utilities are prioritizing improvements to their power lines
in high fire risk areas.
And really the audit took aim at the Infrastructure Safety
Office's
process for approving wildfire mitigation plans, saying it
doesn't ensure the efforts are being made in the correct
areas. Sort of the dynamic here was criticism of these two
agencies
from the auditor, but also acknowledging that a lot of this is
the
process, the way it was set up by the legislature and not really
the
conduct of the agencies which say they need more resources.
But I guess the safety office that identified significant
concerns with 2020 wildfire
mitigation plans of PGE Southern California Edison and SD GNE.
But they still granted conditional approval of those plans, and
the utilities were required to submit remedial plans.
But the OIES analysis of those plans was not a condition for
their approval.
These safety certificates are required under AB 1054, which was
the wildfire legislation passed here a few years ago.
So yeah, clearly some more work needs to be done in the area of
approving these plans.
The CPUC said they largely agreed with the report but did raise
an issue of jurisdiction, said the
legislature is responsible for directing its updates to auditing
procedures.
Dan Catchpole:
So what does this mean for looking at in the future?
I mean, this won't affect wildfire mitigation plans this coming
summer, right?
Jason Fordney:
No, these. Let me see.
These are the 2020.
Yeah, they're looking backward at the 2020.
Dan Catchpole:
Right. But I mean, they're looking backwards to inform future
wildfire plans.
So how does this.
How different are the wildfire mitigation plans for the upcoming
season summer, the upcoming wildfire season?
How much do they differ from last summer's, two summers ago,
what have you?
Jason Fordney:
Yeah, that's a great question.
And the utilities actually said they've made some changes to
improve the plans since then in some of
their responses.
So yeah, I think there will be improvements and the technology
is improving.
The main issue being here, they're just saying that they're not
inspecting in the right areas.
So it seems like a fairly simple problem to solve, but this is
fairly new thing here in California will require more refinement.
Dan Catchpole:
I mean, everywhere, obviously, it's a much more immediate, much
bigger issue for California than it is for
northwestern states. But I mean, it's everywhere in the West.
It's becoming an increasingly important issue.
It's something that I've been trying to get a better handle on in
my reporting as utilities up here in the Northwest update and
tweak their wildfire mitigation plans.
A lot of it seems very incremental where there seems to be
somewhat of a disconnect
between the urgency with which climate scientists are
saying how rapidly, how dramatically our understanding of what a
normal
wildfire season looks like is changing versus how much wildfire
mitigation plans are
changing. And I'm not sure.
I'm trying to figure out like, how much is that just my
perception.
Are they changing fast enough, or does it just feel like these
are kind of two different processes?
Talking about how we look at future wildfire dangers versus, you
know, a year to year wildfire mitigation
plan. And there have been some big changes, especially up here
with adopting public or was it PSP — I'm trying to
remember what that stands for — Public Safety Power Shutoffs,
which are completely new up here.
You guys have had them for a while.
But I mean, those are, that's a pretty big change.
But at the same time, it kind of feels like given how dramatic
the future's supposed to be, the changes that we're
talking about, it's really still using tools developed to fight
to deal with wildfire
seasons 20 years ago.
Jason Fordney:
Yeah. It's definitely an ongoing process.
It's very complicated.
But, you know, utility industry is not known for rapid change in
process.
But yeah, it's definitely true that they're really focused on
the number of miles that are inspected.
And that's one issue here rather than where the where those
miles are.
And I think they'll continue to refine these inspections and how
they're done
and how to plug climate change into the equation is something to
think about.
I would have to think about it a little bit more, but I don't
know how they're incorporating it into their planning.
Dan Catchpole:
Yeah.
Jason Fordney:
But we know it's going to be dry.
I mean, they're planning for the worst, I'm sure, especially
this year, where we just had the driest January, February, March
on record. It's pretty bad.
Yeah, well.
Dan Catchpole:
And with that in mind, Bonneville Power Administration is trying
to better incorporate climate
change realities into its long term forecasting for hydropower
generation.
So it's trying to bring its forecasts into better alignment with
the future
projections coming out of climate change models that's looking
at tweaking its hydro generation forecasts to reflect
recent climate change trends and capture the anticipated ranges
of uncertainty in the future.
So heretofore, the BPA has used a long data set of historical
data to
build its forecasts of hydro generation.
But as you know, as the future changes, the future looks d
ecreasingly
looks like the past. It looks more and more different from the
past 100 years.
So their focus right now and just tweaking, tightening up the
historic data
they set. So going from using a data set from 1939 to 2018
to reducing that down to 1989 to 2018.
To better capture some of the current trends that we're
experiencing right now, as well as some other methodological
tweaks that you can read plenty more about that in Clearing Up.
But it is interesting to see how much these changes are
really affecting how we think about and operate the system.
And this will potentially have some financial impacts for public
power customers of Bonneville, as well as
just the larger effects on how the system is managed.
So you can read more about that in a story by my colleague Rick
Adair at Clearing Up.
Jason Fordney:
That was reporting by Abigail Sawyer that I was just summarizing.
So what else is happening in the Northwest?
Dan Catchpole:
So we'll just stick with BPA for right now.
The Public Power Council came out with a white paper staking out
a position on n
egotiations for power contracts for the post-2028 contracts.
Bonneville Public Power Administration has contracts with, I
forget the number 140
some public power customers that they're 20 year contracts
expire in 2028.
So they've started having conversations about with customers a
couple of years ago to kind of get the ball rolling
about what the post 2028 contracts are going to look like.
And so Public Power Council came out stating some things that
they'd
like to see. And one of the top ones was about just saying that
the final contracts to have
durability with adaptable product services and terms that allow
BPA
customers to meet their needs as they evolve over time.
And that is really one of the things that I've heard time and
time again from officials that BPA
utilities, or officials at utilities that are BPA customers is
just, we
don't really know.
There's a lot of uncertainty about the future ahead, and the
contracts need to allow flexibility to deal with that.
This story is from also from Richard Adair, and you can read
more about that and also just more about the 2028 contracts in
the coming years at Clearing Up.
Jason, what else do you have for us from California?
Jason Fordney:
I have another story from Abigail.
This week has to do with Diablo Canyon.
The Inspector General's Office for the US Nuclear Regulatory
Commission recently
did an inquiry into an incident in July 20, 2020.
That is, there was a failure in the auxiliary system which
required one of the plant's reactors to be shut down for eight
days. The OIG found some faults with the inspection process,
which I'll get into in a
second. But what happened in July 2020, a plant operator noticed
water coming from
an area associated with a feed water system.
The plant was not producing electricity at the time because —
this is interesting — because there was another problem going on.
They ended up repairing the pipe.
But the OIG, the inspector general, that looked into this,
revealed that NRC inspectors had overlooked the area
where the leak occurred, even though their inspection report
said they'd conducted a complete walk down of the system three
months prior to the discovery of the leak.
The inspectors, failed to identify piping insulation to the
system that had been in degraded condition.
They also found that NRC inspectors spent fewer than 5 hours
directly inspecting the two reactors at Diablo
Canyon in April 2020.
The recommended time for such an inspection based on NRC
procedures is 12 hours.
So yeah, and NRC did end up issuing a notice of violation to
PG&E for failure
to appropriately screen relevant operating experience.
So it looks like on this one, there's sort of a shared
responsibility from the utility and in NRC.
But yeah, a little bit of bad news about Diablo which we know is
scheduled to shut down in a couple of
years or three years.
2024, 2025.
So that's some news from Diablo Canyon.
Dan Catchpole:
Yeah. You know, that's actually a great segue for the last story
that I was going to highlight here from the Northwest.
So, you know, just as those older nuclear facilities are
starting to
hit the end of their life cycle.
Small modular nuclear, there's a lot of talk about that.
A lot of folks are hoping that can provide help us transition to
a system that is heavily reliant
on intermittent renewable resources.
Among those exploring that is Pacific Core, the one of the
largest utilities in the West.
So in there in Pacific Core's latest integrated resource plan,
which is just for people who aren't
don't have the pleasure of being steeped in the intricacies of
utility regulation to know about integrated resource plans.
So it's basically a long term plan that utilities have to come
up with every few years, laying out essentially how what's their
demand and how they're going to meet it.
That's really the really short version of what that is.
And so in their latest integrated resource plan that they
submitted to Oregon
regulators, they included a 4 billion project for a small
modular nuclear reactor
that they'd like to procure in 2028.
The Oregon PUC signed off on the IRP, they acknowledged it and
said, hey, this all
seems like a well thought out plan.
But not so excited about the small modular reactor.
They think it's too early to include as a key proponent of a
long term
plan. But they did encourage PacifiCorp to continue looking into
it.
Now, approval of the IRP, one of these resource plans, that is
not the same as approving
a utility spending money.
So I just want to make sure listeners understand that.
This is just saying you did a good plan.
This makes sense for a 20 year view.
That is very different from them saying, yes, you can charge
rate, you can charge customers
to pay for this plant that you just built.
But clearly, the long term plan informs the projects that
utilities actually go forward with.
So Oregon regulators said, yep, keep looking into it, but it's
too soon to actually include it
in a long term plan.
So you can read more about that in that story by my colleague
Steve Ernst at Clearing Up.
Jason, you have anything else for us from the Golden State?
Jason Fordney:
Yeah, I have one. My bottom line this week I tackled the gasoline
tax and transportation.
A little bit of an ancillary topic here at CEM, but we're
increasingly writing about transportation with
electric vehicles and gas taxes or gas.
The price of gas being super high in California right now, as
everybody knows, above $6 a gallon.
Dan Catchpole:
Wow.
Jason Fordney:
Yeah. I've got a picture on my column of my latest fill up of
16.9 gallons, and it was even $100.
So a big topic.
I'll just get through this briefly, but we had a very interesting
hearing of the Transportation Committee, the
state transportation committee at the legislature last week,
where Kevin Kiley introduced a
bill to get rid of the gas tax, which let me see, I think is,
yes, $0.51 a gallon.
So a 50 — that's just one tax we pay, but $0.51 a gallon.
He put in a bill to suspend that temporarily.
There's a Democrat majority on this committee.
And what they did was the first thing they did was offer an
amendment to strip the entire bill and replace it with
a tax on gasoline.
Now, I had some fuzziness about how this is structured.
According to the verbal version of the amendments, it would be a
tax on oil companies.
I saw something in the legislation itself about a tax per gallon
on gasoline.
Anyhow, just to wrap that up, it was very contentious hearing.
Once the Republicans saw that instead of their tax being
reduced, the bill would be stripped and a tax put in
its place. Kevin Kiley said "This is your government, folks
right here.
Absolutely disgraceful." Assemblyman Lorri Davies, also a
Republican from Aliso Viejo,
said, "I'm disgusted by this process, etc." It's safe to say
they were not happy.
So now the bill with Kylie's name is moving forward with the tax
instead of suspending the tax.
But the committee chair.
Her name is Laura Friedman, a Democrat from San Fernando said,
"I'm appalled and shocked that you are so appalled and shocked."
She said, "We often suggest other suggestions in committee.
We know we could just vote it down, but we're trying to help
here." Gas tax has been suspended in other states, including
Connecticut, Georgia and Maryland.
So yeah, legislation moving forward looks like the gas tax will
not be suspended in California anytime soon.
Dan Catchpole:
I did not realize gas was so expensive in California.
I thought it was bad when I filled up here.
Jason Fordney:
Yeah, it's really high right now.
The highest I've paid so far is $6.19, and it's hitting $7 in
LA.
And, you know, they're blaming Ukraine and Russia a little bit
for this, but these prices are unique to California.
Dan Catchpole:
Yeah.
Jason Fordney:
Yeah. And we also have this hidden surcharge, they call it, where
nobody can figure out why gas prices are so high.
It's becoming a big political issue here.
Dan Catchpole:
Interesting.
Jason Fordney:
Yeah. Hopefully it will get some.
You know, it's been high before and come down.
There's a lot of different factors at play.
But, you know, maybe this will push people towards EVs.
But I think that remains to be seen.
Dan Catchpole:
Well. And listeners, you can stay tuned here and read us online
just to follow coverage of that shift to
electric vehicles in the future.
We have been covering it, and we'll continue to cover it, among
other topics.
So that's all I have from the Northwest.
Jason, do you want to add anything?
Jason Fordney:
Nope. We're good here in NorCal.
We had fun with our April Fools issue.
Speaking of small modular, we ran a piece that the CPUC had done
away with rooftop solar because it was too
complicated and was instead going to require SMR on every
rooftop.
And we actually fooled a couple of people with our April Fools
this year.
A couple weren't happy about it.
What are you going to do?
Dan Catchpole:
Yeah, that's. That's a good one.
I like that small rooftop, small, modular nuclear.
That's fantastic.
I wish I thought of that one.
Jason Fordney:
Yeah, that was. I think that was Abigail again.
She's our most creative April Fools writer, but that's about it
here from CEM.
Dan Catchpole:
All right, great. Well, you can find us online newsdata.com.
You can find Clearing Up and California Energy Markets.
You can follow us on Twitter at @CUNewsData and @CEMNewsData.
And keep tuning in right here to hear the latest on what we're
covering.
Otherwise, I think that's it for today.
So thanks for tuning in, and we'll catch you all next week.
Jason Fordney:
Okay. Talk to you later.
Outro:
You've been listening to NewsData's Energy West, a podcast about
the energy industry today and where it's going
tomorrow.