Calif Treasurer Proposes Green Wave to Invest $1.5B in Cleantech

For over a year, California Treasurer Phil Angelides has been meeting with bankers, VCs, and environmental, business and labor leaders, and now he’s announced a major proposition to California’s two giant pension funds, CALPERS and CALSTRS, which have $163 B and $113 B respectively (#1 and #3 in the nation).

Flanked by several key players in energy and clean tech, he held a press conference at NanoSolar here in Palo Alto Tuesday morning, which it was my privilege to attend.

The “Green Wave Initiative” includes among other provisions the commitment by the pension funds of $1.5 billion to be invested in new clean technologies and environmentally responsible companies. The goal is to gain long term financial returns while reducing risks — risks to pensioners’ financial security posed by corporate environmental liabilities, and risks of environmental damage, energy security, and climate change. Equally, the opportunities in clean tech are expanding rapidly and represent one of the next big growth arenas.

There are four main parts to the proposal:

1. Investor Activism
California has been a leader in investor activism, demanding transparency, disclosure and accountability from the management and boards of the hundreds of major companies that pension funds are invested in. With recent corporate scandals, this has become all the more significant. Companies that cut corners are careless with environmental responsibilities are just as likely to disappoint investors as those who cook their books, and companies that don’t plan ahead could get hit with future compliance costs big enough to hurt their share prices. CalPERS and CalSTRS will now demand that corporations also provide meaningful and robust reporting of their environmental practices, risks and potential liabilities.

2. Private Equity Investments
The funds already have sizable venture capital and private equity investments (though a small percentage of the total portfolio). This would be extended by investing $500 million into investments that nurture “clean” technologies. A similar initiative in biotech was begun 2 years ago, and now cleantech is a new growth industry offering returns along with jobs and economic growth, while addressing critical environmental issues.

3. Public Equity Investments
The funds would invest $1 B of their stock portfolios with environmentally screened funds, particularly those whose managers have outperformed non-screened counterparts. This should not only reduce risk and increase returns, but also help send the message to corporations.

4. Real Estate Audit
The two funds together own nearly 160 million square feet of office and industrial space, part of a $16 B invested in real estate across the US and in 22 countries. The proposal is that a comprehensive audit be done of the energy efficiency and green practices in these buildings, towards the goal of using “best practices” that reduce long term costs and boost property values.

Angelides has asked CalPERS and CalSTRS to put these initiatives on their agendas for this Spring and Summer.

In supporting remarks, Bob Epstein of Environmental Entrepreneurs ( observed that the next big growth area isn’t always clear to everyone. In 1984, when he was raising money to start Sybase, there was a lot of doubt that enterprise software would be big. He and many others are convinced that cleantech is now clearly on the launch pad.

The Treasurer’s website has additional information on today’s announcement, including the full press release, fact sheets on the four facets of the Green Wave initiative, and the Treasurer’s Nov’03 U.N. speech at CERES’ Institutional Investor Summit on Climate Risk.

Energy Efficiency as a Resource

ACEEE National Conference on Energy Efficiency as a Resource
Berkeley CA Jun 9,10

A number of the papers are already posted online (when the author’s name is a link):

This event was a real eye opener. The energy efficiency crowd is on a roll, very much back from near death. These are the champions of Energy Efficiency (EE) and Demand Response (DR, not to be confused with distributed resources) who push for equal treatment of the demand side “resource” alongside generation and supply. In California especially, they feel vindicated by the failure of deregulation, and gleefully describe the end of a “dark age” with the return of rate-base regulation and integrated resource planning (IRP). In this view, reliance on the “market” to deliver the right mix of supply and conservation has been completely discredited.

The emphasis was on California, with two PUC commissioners giving major speeches supporting the basic premise. We heard about recent 3-2 votes to push efficiency as an integral part of a state “action plan”. Various state agencies are pledging to coordinate their efforts. The state’s investor-owned utilities have submitted major plans that go well beyond using the public benefits charge to “procure” energy and capacity from the demand side. Since the utilities are the default/only provider, but don’t have their own generation anymore (they are pipes and wires companies!), they now need to submit detailed resource plans–thus the rebirth of “IRP”.

This all felt like a jump back in time–apparently I hadn’t realized how little deregulation has progressed. Clearly, “prices” haven’t replaced “rates”; “revenue requirement” still has meaning; utilities are still utilities, and a key issue is how to put efficiency investments into the rate base and assure they get a rate of return comparable to generation facilities.

There was, however, a recognition that things would be different — that the intervening experience and lessons learned could be built on. One speaker compared it to a second marriage, where you’re wiser and may have a better chance to get it right. In particular, there’s a lot of support for “decoupling”. This refers to the idea that distribution utilities should not have their cost recovery/revenues tied to throughput of kwhs, but to performance based measures like reliability of service.

The California Action Plan includes goals for 5% of peak demand from efficiency along with renewables, distributed generation, transmission upgrades, and “reliable affordable energy”. California led the nation over the last 20 years in conservation and efficiency, and will again. Cities like San Diego and San Francisco are undertaking their own resource planning efforts as well.

Other areas are proceeding vigorously. In New York, the governor’s office is running a multi-agency Coordinated Electric Demand Reduction Initiative (CEDRI), with a goal of making 600 MW available on short notice. The state’s goal is to create a vigorous market for efficency; 92 ESCOs are operating there currently. The Northwest has a multistate program; Montana has come up with an ambitious approach; the Northeast is active as well (NEDRI). In the midwest, the situation was described as being “several years behind”, since energy is cheap and plentiful there. In Texas, there doesn’t seem to be a problem incorporating demand aspects alongside restructuring. Their markets are set up so that “DR” can compete directly, and as much as 500 MW is in the game.

Another issue receiving a lot of attention is the relationship between “efficiency”, i.e. energy, and “demand response”, i.e. capacity. In many regions, it seems problematic to work these two pieces together, but there was a strong recognition that they are really two sides of the same coin. Chuck Goldman of LBL has been studying the lay of the land in states all across the country, and noted a marked drop in traditional load control and interruptible rate programs–these are practically ‘stranded assets’ — ignored until price spikes appeared. Now there are wildly varying arrangements for retail competition, and for EE and DR, which are rarely coordinated. (

For the rulemaking in Calif for demand response, go to:

There was a lot of support for real time pricing, which must eventually become a reality as the only real mechanism that can send the proper economic signals to consumers. In fact, the Calif plan has it starting in 2004.

Monica Rudman of the Calif Energy Commission reported on how they managed to rush a set of programs together to try to alleviate the demand crunch during the California crisis. The state legislature urgently approved $50 million in August of 2000 and then an additional $327 million in April 2001. The CEC launched a wide array of over a dozen measures with astonishing speed, and almost in time to help. (Efficiency may not take as long to “construct” as generators, but it still has a lead time.)

Art Rosenfeld, former head of energy programs at LBL, and now commissioner on the Calif Energy Commission, is widely viewed as the father of the conservation movement, in California in particular. See

He tells a convincing story about the scope the efficiency resource, citing the example of how refrigerators now consume 1/4 of the energy each (and they’re larger) compared with 20 years ago when “market transformation” efforts and appliance efficiency standards began. This “resource” is now comparable to the entire US hydro or nuclear power contribution to the nation’s energy mix..

There’s a great deal more detail to talk about from this conference, and about this whole subject, than can fit in one UFTO Note. If there’s interest in pursuing any of this in greater detail, please let me know.

By coincidence, this morning’s UtiliPoint IssueAlert was on this very subject! ” Energy Conservation is Now In Vogue”. Go to:
(I hope you are on the list to get this daily commentary. It’s almost always interesting, timely and useful.)


Several months ago I put together a set of references on demand studies. You can download it here (UFTO client password required):


A personal view…. I’m struggling with one aspect of efficiency as a resource– just what kind of a “resource” is it? And why does it exist in the first place? The refrigerator example makes sense as public policy–not too different from needing government to overcome the inability of the “market” to put smog controls in cars. When it comes to “bidding” negawatts into the power market, however, one might reflect that there’s no other instance where a product or service is “unsold” (except maybe in agriculture, and look what a mess that is). If that negawatt is available, then maybe it should have already been taken up. Its existence is purely a result of an existing market imperfection. The question of what demand “would have been” is fundamentally messy, and despite all the brave talk, “Measurement and Verification” (another huge topic of interest at the conference) is never going to feel entirely satisfactory as an answer. Efficiency advocates don’t seem to understand, and aren’t addressing, what critics are uncomfortable with, and they need to.

T&D R&D Gaining Attention

Here are some high-level pointers to an array of resources related to ongoing developments in T&D research, sponsored by DOE, NSF and the CEC (Calif Energy Commission), which demonstrate a new level of attention to grid reliability and security.

Let me know if I can be helpful digging deeper into any of these areas.


DOE – Office of Electricity Transmission and Distribution

The Dept. of Energy will announce, perhaps as early as next week, the creation of a new office for T&D reporting directly to the Secretary, as recommended in the National Transmission Grid Study* done last year. The Office of Electricity Transmission and Distribution will start with a budget of $85 million, however all but $8 or 9 million is already committed to earmarks ($27 M) and high temperature superconductors ($40 M). The office will be headed by Jimmy Glotfelty, an assistant to Abrahams. The staff currently in the Transmission Reliability Program in EERE will move over to the new office.

Meanwhile next week, a new Center will be dedicated at Oak Ridge:

The dedication of the National Transmission Technology Research Center (NTTRC) and the Powerline Conductor Accelerated Facility (PCAT), the first working facility of four planned for the Center, will be held March 25. The Center, sponsored by ORNL, DOE, and TVA, will test and evaluate advanced technologies, including conductors, sensors and controls, and power electronics, under a wide range of electrical conditions without jeopardizing normal operations. The first component of the NTTRC, the PCAT facility, is initiating its first test protocol with 3M’s advanced Aluminum Conductor Composite Reinforced conductor.
— Overview of NTTRC:

The existing Transmission Reliability Program was reestablished by Congress in 1999 to conduct research on the reliability of the Nation’s electricity infrastructure during the transition to competitive markets under restructuring.
Go to “Documents and Resources” for recent studies and materials.

*(May 2002


Calif Energy Commission

The CEC Public Interest Energy Research program (PIER) has a very active effort underway in Transmission Research. They recently released a 140 page “Electricity Transmission Research and Development Assessment and Gap Analysis – Draft Consultant Report” — now available online along with other materials and presentations:

This report is one of two reports which were discussed at a public workshop held March 12, 2003 at the CEC.


National Science Foundation
Directorate for Engineering, Elec. And Communications Systems

1. Workshop on Modernizing the Electric Power Grid, Nov 02

Starting on slide 14 of James Momoh’s presentation there is a good overview of the EPNES initiative (next item)

2. NSF/ONR Partnership in Electric Power Networks Efficiency and Security (EPNES)

This solicitation seeks to obtain major advances in the integration of new concepts in control, modeling, component technology, social and economics theories for electrical power networks’ efficiency and security. It also encourages development of new interdisciplinary research-based curriculum… Proposals were due Feb 3.

3. The Power Systems Engineering Research Center (PSERC)
PSERC is an NSF Industry/University Cooperative Research Center, involving a consortium of13 universities working with government and industry. The website has a huge array of reports and publications.

For the NSF’s “fact sheet”, see:

CEC Energy Innovations ’99 Conference

CEC Energy Innovations ’99 Conference
October 25-27, 1999, San Diego

The agenda alone fills 4 pages (see UFTO Note 24 October 99), so this note will cover some general themes and highlights. The original conference brochure is available online in pdf format, and Powerpoint presentations from the conference will be made available there in the near future:

I will be glad to provide additional contacts and information on any area of partcu lar interest.

Our last major coverage of PIER appears in:
UFTO Note, 23 Nov 1998, “CURC Annual Conf. 11/98” {password required}


— Keynotes and Guest Speakers

– State Senator Debra Bowen (keynote) — California is still learning about life under restructuring. Concerns that G&T investment is insufficient. Legislative push for expedited siting, but supply side not the only answer–demand side measures cheaper and faster. Consumers get no price signal about time of use – need to “de-insulate” them from real costs.

– State Assemblyman Roderick Wright (keynote) — from poorest district in California. Dubious about restructuring bill (AB1890), as it addressed none of the root causes of high energy prices–though that was the primary motive in the first place. If taxpayer money is used for R&D or other energy programs, he needs to balance that against other needs, and be assured that his constituents actually benefit.

– Bill Reichert (luncheon speaker) .. from, a prominent Silicon Valley incubator of startups .. presented some hard truths about venture capital and technology business.

– Karl Rabago (banquet speaker), now with the Rocky Mountain Institute, recounted the message contained in Amory Lovin’s new book “Natural Capitalism”, which sees the mainstreaming of sustainability, eco-commerce, waste elimination, etc. as having a historical significance comparable to the Industrial Revolution.


— Public Interest Energy Research (PIER) Program

“The Nation’s Most Comprehensive Ratepayer-funded Public Interest Energy Research Program” is gradually maturing, as the transition projects are wrapping up (close-out funding of projects that IOU’s had in place prior to restructuring), and the various programs establish their goals and directions.

Provides funding to public and private entities for research, development and demonstration activities that advance science and technology not adequately provided for by competitive or deregulated markets. Funding is available for environmentally preferred advanced generation, renewables, end-use efficiency, environmental research and strategic research.

PIER Program Manager:
Ron Kukulka, 916-654-4185,

PIER is organized into 6 Areas, each with a designated manager.

– Renewables
George Simons, 916-654-4659,

– Environmentally-Preferred Advanced Generation (EPAG)
Mike Batham, 916-654-4548,

– Residential and Commercial Buildings
Nancy Jenkins, 916-654-4739,

– Industrial / Agricultural / Water
Ben Mehta, 916-654-4044,

– Energy-Related Environmental
Kelly Birkinshaw, 916-654-4542,

– Strategic Science and Technology
Tom Tanton, 916-654-4930,

Each program briefly presented its 1999/2000 Funding Proposal, based on their respective Issues, Mission and Objectives, and indicated amounts going to sole source or collaboratives/interagency, to competitve RFPs, and to memberships (e.g. EPRI, GRI, etc.) In each area, with total budgets ranging from $9 to $15 Million, some contracts are already approved, some are in negotiations, and some have not yet been initiated.
(I have prepared Word docs with the details that were presented, adapted from files provided to me by PIER. They will be posted on the UFTO website. Let me know if you want them in the meantime.)

Energy Innovations Small Grant Program

This program provides grants of up to $75,000 to small businesses, academics, small non-profit organizations and individuals to prove the feasibility of research and development concepts relating to PIER objectives. It operates like the federal SBIR programs, but with a considerably faster solicitation and award cycle.

Philip Misemer, 916-654-4552

– Synergy with other Programs
Calif Board for Energy Effic oversees $280M/year
[buydown of renewables implementation]
Calif Utility Research Council (future role is uncertain)
Calif PUC – Doesn’t have a role, and doing an excellent job at not
doing anything about R&D — Utilities haven’t requested in rates.


Transferable Knowledge from Other Forums (Tuesday)

– Lessons Learned in NREL Industry Growth Forums
Lawrence (Marty) Murphy, NREL,
NREL periodical ly sponsors Industry Growth Forums, intended to help aspiring, start-up, or expanding renewable energy businesses. The next Forum will be held in early year 2000, in the Seattle area, and highlights will be provided here as details are defined. For more details on Forums as well as the many valuable lessons learned download the document, “NREL Industry Growth Forums Lessons Learned” June 1999, NREL/MP-720-25870 (PDF 369 KB).

Also see:

– Where We Are and Where We’re Going
Janet Joseph, NYSERDA
Summarized the program, as the only other “public benefit” state level R&D program besides PIER.

– Gaining Market Acceptance of Innovative Technologies
Keith Davidson, Onsite Sycom Energy Corp.
A good overviewof “innovation” as the term applies to distributed generation and combined heat & power (CHP), with a review of Tecogen’s experience in the early ’80s.

– Building Bridges Connecting Research Results to Consumer Benefits

Mohawk Research Corp.
Marsha Rorke, 301-762-3171,
Sam Westbrook, 206-780-8269,

Summarized in 20 minutes the contents of a 3-4 day workshop that Mohawk has given over 50 times to personnel at national labs and elsewhere who want to pursue commercialization of lab technology. Key points include recognition that various stages of a development or company require very different skill sets and kinds of people, and the entrepreneur should be clear on when he plans to pass the reins to others. Also, a “commercialization plan”, focused on what it is that you are going to make and sell, is different from the business plan, which comes later and says how you’re going to do it.

The workshop textbook is: “From Invention To Innovation,” 1999, DOE/GO-10099-810. For a copy, email (remember to include your mailing address.) Or call 202-586-1478 to receive a free copy as well as information on DOE’s Inventions and Innovations Programs.
An earlier (full text) version is available at:

Ken Gudger, Global Energy Partners
Jerome Foster, Pentech Energy Solutions
Jeff Colborn, Metallic Power, Inc.

Leadersof three startups, each at a different stage, spoke about their experiences and how they went about developing and pursuing their business plans. Some memorable phrases:
“Get a customer before you quit your day job.”
“Be sure the customer understands (what you’re selling), trusts
that you can deliver, and has the will to do his part.”
“As soon as you take a dollar from anybody, you’re working for them
[so don’t be so hung up about control].”
“Be honest about yourself, and what role is appropriate for you.”


On the second day, pane l sessions were held in parallel for each of the PIER subject areas, so one had to choose which ones to go to. Many of the presentations will be put up on the PIER website in due course.

Morning — Renewables; EPAG; and Buildings
Afternoon — Food/Ag/Ind; Strategic; and Environment

Most of the panel presentations were reviews of completed or ongoing PIER-funded projects, or other related programs. There was also a poster exhibition with two dozen displays on other PIER sponsored work.

For details on all projects:
1998 Annual Report – PIER Program, P500-99-004, March 1999
(hardcopy also available)


Panel I – Renewable Energy Technology

I.A. Making Renewables Cost-Competitive
Larry Berg, Larry Berg & Associates
Steve Gatto, BCI

I.B. Renewables as Distributed Generators
Merwin Brown, NREL
Thomas Hoff, Clean Power Research
Henry Zaininger, Zaininger Engineering

I.C. Non-energy Benefits of Renewables
Nancy Rader, Nancy Rader Renewable Energy Consulting
Dan Shugar, PowerLight Corp
Loyd Forest, TSS Consulting


Panel II – EPAG for Distributed Generation (DG)

II.A. Energy Providers: Planning to Use EPAG in DG Applications?
Al Figueroa, San Diego Gas & Elec and CURC
Roland Risser, PG&E
David Berokoff, SoCalGas
Mike Burke, NewEnergy

II.B. What are the Future Product RD&D Needs for EPAG Mfgs.
George Wiltsee,* Capstone Turbine
Mark Skowronski, Allied Signal
Ron Wolk, Wolk Integrated Technical Services
Jim Schlatter, Catalytica

II.C. What are the Current and Planned R&D Programs in DG?
Andy Abele, S. Coast Air Qual Mgt District
Scott Samuelsen, National Fuel Cell Research Center, UC Irvine
Daniel Rastler,* EPRI
William Liss, GRI
Abbie Layne, U.S. DOE
[Adv Turb.; Indust Technol, etc. – Major workshop Nov.8-10]


Panel III – Building End-Use Energy Efficiency

III.A. Technologies and Strategies for Buildings in Hot Inland Climates
Lance Elberling, PG&E
Randy Folts, Pulte Homes Corp
Malcolm Lewis, Constructive Technologies Group, Inc.

III.B. Drivers for Energy Efficiency
Cliff Federspiel, Center for the Built Environment, UC Berkeley
Doug Mahone, The Heschong Mahone Group
[Daylighting Improves Productivity]
Gregory Thomas, Gregory Thomas and Associates

III.C. How Energy Efficiency Can Affect Affordability and Property Value
Eric Haftner, ELH Development
[Comparative investment qualities of energy efficiency measures]
Rob Hammon, ComfortWise
Greg Watson, ICF Consulting
[Homeowners and Energy Efficiency: Rational?]


Panel IV – Food/Agriculture/Industrial/Water Energy Efficiency

IV.A. Water: Issue of the New Millennium
Keith Carns, EPRI
Jeff DeZeller, Metropolitan Water District
Lory Larson, SoCalEdison
Greg Leslie, Orange County Water District

IV.B. Innovations in Food and AgriculturalProduction Systems
Ken Solomon, CalPoly San Luis Obispo Univ
Alan Pryor, SoilZONE Inc.
Dee Gram, R and E Enterprises
Sharon Shoemaker, Calif Inst Food & Agric Research (CIFAR), UCDavis


Panel V – Strategic Research

V.A. Feet Firmly Planted on the Ground – Near Term Benefits
Joseph Eto, Lawrence Berkeley National Lab
Art Iverson, Spinel Power Technology
William “Woody” Savage, PG&E
V.B. Eyes on the Stars – Incorporating the Long View
Alexander Glass, Executive Director, BARTA
Dave Hawkins, Cal ISO
Dave Lema, Special Advisor to the Governor
Gail McCarthy, EPRI


Panel VI – Energy-Related Environmental Research

VI.A. Solutions to Current/Expected Environmental Issues
Sonja Mahini, EPRI
Vince Mirabella, SoCalEdison
Don Rose, Sempra Energy
VI.B. A New Perspective: New Approaches to Issue Resolution
James Cole, Univ of Calif President’s Office
Norman Miller, Lawrence Berkeley National Lab
Kelly Birkinshaw, CEC

Calif. Interconnection Workshop Dec 6

Just received this note a few minutes ago from Jairam Gopal, the head of CADER.

It appears that California is gearing up to follow in the footsteps of Texas and New York, and do something about interconnection requirements.

Subject:  Hello everyone:
Date: Fri, 12 Nov 1999 10:21:22 -0800
From:  “Jairam Gopal” <>

Hello everyone:
Please see the CEC Web site at:

for the following posted documents:

1) CEC’s Nov. 3 Order Instituting Investigation on Interconnection issues.
2) Siting Committee’s notice of first interconnection workshop to be  held on December 6.

As you are aware, this OII follows the CPUC Decision of the earlier proceeding on Distributed Generation and Distributed Competition.

The CEC will lead the proceedings on Interconnection Issues and will kick off the process with the above mentioned workshop on December 6, 1999. If you are on the service list of the earlier CPUC proceeding, you should receive a hard copy of the Notice by mail.

Chair, CADER
Jairam Gopal
(916) 654-4880  (tel)
(916) 654-4753 (fax)

CADER/DPCA Symposium on Distributed Resources

[I’ll be attending the DOE Distributed Power Program Review and Planning Meeting in Washington next Monday September 27, followed by the IEEE working group session.]

San Diego Sept 13-14

(see program/agenda at

The meeting was very well attended, exceeding expectations, with roughly 400 registered. It included keynotes by notables (Larry Papay of Bechtel, Dan Reicher, Ass’t Secty, EE/DOE, and David Rohy, Calif Energy Commissioner) and two days of parallel sessions on “Policy”, “Technologies” and “Markets”. It was impossible to be in 3 places at once, however the 2″ thick binder provided copies of the vugraphs from most of the presentations.

A dominant theme: it is not a matter if, or even when, but only of how fast, distributed generation will be deployed on a major scale. In fact, DG is already here, and has been for a long time, in various forms and applications. If it truly is a “disruptive technology”, then we can expect it to lurk below the surface, serving in various niche applications, until a crossover occurs and it emerges an a major scale.

The biggest issue seems to be interconnection with the grid. Advocates see utilities as putting up strong resistance. One speaker, Edan Prabhu, explained it terms of distribution departments, at the low end of the totem pole in utilities, trying to protect themselves and their “turf” from this dangerous invasion of “their” system. He explained how the good guys meet the “nice guys”–DG advocates vs. the well-meaning protectors of the system.

There was considerable muttering in the back of the room as speakers from the California utilities claimed to be doing all they can. Repeatedly, we see instances where utilities can handle interconnections just fine, when they want to. In other situations, however, they seen as throwing up roadblocks and delays. Ironically, utilities are entirely comfortable with large motors, which feed back fault current when voltage disappears, but this same issue is seen as a huge problem for DG.

As Dan Reicher explained in his comments, nine states have now gone ahead to establish some kind of interconnection standards for small scale generation, while the long term answer is to have one new national standard. The IEEE work under Dick DeBlasio is key to this, and DOE also supports the development of advanced hardware and software for interconnection.

There was a very good summary of the remarkable events in Texas, where a process has moved with unprecedented speed to cut through the confusion and arrive at an interim set of workable policies. The proposed rules are available online:

A hearing is scheduled for October 25. The presentation was given by Nat Treadway, a former PUC analyst, who is now on his own. 713-669-9701,
New York state has a similar initiative for small DG (under 300 KVA). A commission staff proposal was issued in July, however timing of a decision is uncertain. Comments were due by September 20.
In California, the PUC took longer than expected to announce a decision on a staff recommendation to split their rulemaking proceeding into two parts — Distribution Competition, and DG Implementation Issues. A draft decision to do this was finally announced Sept 21, and is now available online (2 documents) at:
The California ISO presented an interesting comparison of technical requirements for large generators on the system with what might be needed for DG. Generators need to have sophisticated communications and control capabilities that the ISO can monitor and talk to directly. The ISO is implementing the “ANALOPE” system to do some of this over the internet (there is a strong need to certify bids and contracts–i.e. failsafe digital signatures). Once this is established, it may pave the way for the use of internet technology to communicate with DG’s and enable them to participate in the California energy and ancillary services markets.
(Contact: David Hawkins 916-351-4465
The Technology sessions featured presentations by makers of microturbines, fuel cells, reciprocating engines, dish stirling, storage, and renewables. Discussions on “Markets” ranged from the “sleeping giant” of international electric demand, to combined heat and power and the use of smart technology to capture market value. Selected items may be featured in future UFTO Notes.

Green Power News — Green Branding

Terry Peterson of EPRI sends out several notes a week to an email list, where he comments on current events in renewable energy. It’s primarily for EPRI members, but temporary ‘free preview’ subscriptions are available and he’s added my name to the list in anticipation of my supplying him reciprocal information. (Contact him directly if you want to be put on the list for a preview.)


Below is an item he sent out this morning. He gave me permission to forward it to you. It makes two very important points:

1. Retail customers haven’t rushed to switch suppliers in California — yet — but people who say this means restructuring is a flop are missing the point entirely. There isn’t much reason to switch now, but wait until the stranded asset recovery transition is completed, and then see what happens.

2. Most customers who have switched do it to go green, and are even willing to pay more, not less, for the opportunity. Everybody has been too fixated on “cost” of renewables — “price” (and “brand”) are what are really important. Precisely the point Karl Rabago made in his keynote speech to the CURC Conference (Nov 97 — see UFTO Note Nov 13, 1997).

The Harvard Business Review article looks interesting, too. Which cereal do you buy?

(Thanks, Terry.)


Subject: California’s green power market reported heating up
Date: Fri, 30 Jul 1999 11:15:28 -0700
From: Green Power News
To: Green Power News

California’s retail electricity competition has gotten off to a pretty slow start, owing to several factors that tended to discourage residential customers from taking action to switch providers, including an across-the-board 10% rate reduction and an effectively wholesale market price for competing electricity suppliers to beat. In the first year only about 1% of all residential customers bothered.

Enron, for one, found the heat in that kitchen unbearable and stopped marketing residential products. However, several other marketers have stayed the course and, from the press release below, it seems their patience is beginning to pay off.

As noted below, although the total number of switchers to date is comparatively small, the vast majority of them have opted for green power. Since the present California energy market provides very little economic incentive for switching, that testifies to two facts: The great majority of electricity customers are relatively satisfied with their present provider; And green power is clearly a product with “premium brand” potential.

That last point will become very important as the electricity industry learns to stop operating on “level 1” of building brand equity (What are the tangible, verifiable, objective, measurable characteristics of products, services, ingredients, or components that carry this brand name?) and moves toward “level 4” (What does “value” mean for the typical loyal customer?) and “level 5” (What is the essential nature and character of the brand?). If this notion intrigues you, and you don’t think that level 1 captures all the differences between Safeway’s and Kellogg’s corn flakes, please read S. Ward, et al., “What High-Tech Managers Need to Know about Brands”, Harvard Business Review, July-August 1999, pp. 85ff.

Company Press Release

Summer Heats up for California’s Green Power Market

SAN FRANCISCO–(BUSINESS WIRE)–July 23, 1999–California Green power providers report a new surge of customer enthusiasm.

Two companies, GreenMountain.Com and Commonwealth Energy, report signing up customers at a record pace. A third, The Sacramento Municipal Utility District (SMUD) announced plans to buy all the power available from a new green power facility that begins generating in September, in order to meet recent high customer demand.

All three organizations offer products certified by Green-e, a renewable electricity certification program. To date, over 90 percent of California customers who switch electricity providers are receiving green power — electricity produced using renewable resources such as wind, solar, biomass, geothermal, and small scale hydropower.

“Last month was our most successful month ever in terms of sales,” said Rick Counihan, Director of California Public Affairs for Green Mountain Energy. “We are greatly encouraged by the speed with which green power is catching on in California,” Counihan continued.

Jay Goth, Vice President of Commonwealth Energy, said that “Each week we set new records for the number of customers that switch to our 100 percent renewable power offering. In the San Diego area alone, 43 government entities are now buying our green power.”

California Public Utilities Commission Reports support the marketers’ statements showing that customer requests for green power are up almost 90 percent from earlier in the year.

Customers have directly benefited from a statewide credit for renewable energy purchases that allows green power providers to offer renewable-based electricity at a price below that offered by the state’s three major utilities.

In addition, a grassroots education program being conducted by leading environmental organizations such as the Center for Energy Efficiency and Renewable Technologies and Global Green, USA, in conjunction with the Renewable Energy Marketing Board, is helping educate customers on the environmental benefits of green power purchases.

“Still much work remains to be done,” said Karl Rabago, Chair of the Green Power Board which governs the Green-e Program, “but the strength of California’s green power market shows that when customers hear about it, they get it — buying green power is a choice they can make to create a healthier environment for us all.”

The Green-e, a renewable electricity certification program, is administered by the Center for Resource Solutions, a non-profit organization dedicated to building human capacity and institutions for energy, economic and environmental sustainability.

Based in San Francisco’s Presidio, the Center administers national and international programs that preserve and protect the environment through the design of innovative strategies and increased utilization of sustainable technologies.

Contact: Center for Resource Solutions, Meredith Wingate or Suzanne Tegen, 415/561-2100 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
This news item comes to you as a service of EPRI’s Renewables and Green Power Marketing Target. If you are not a Green Power News subscriber and wish to become one–or are one and wish not to be–please send me an email request. Thank you.

Terry M. Peterson
Manager, Solar Power & Green Power Marketing
EPRI Palo Alto CA 650-855-2594

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Green Power Marketing in Retail Competition: An Early Assessment

LBL and NREL recently released this study on green power marketing that finds that the green marketplace is still in an early stage of development with no clear indication of its ultimate size.

The study examines experiences to date with green marketing programs in states across the country. Among the findings:
– pilot programs which include green products are philosophically supported by consumers, but fail to attract real buyers when consumers are asked to switch to green suppliers;
– where markets have been fully opened to competition, green marketers provide a superior quality product over pilot programs;
– disclosure of resource mix is a key element of consumer interest in green products; and evaluating green market demand is difficult.

The abstract  is shown below, and the entire report
can be downloaded at either of these two sites:

LBL’s Electricity Markets & Policy website:

DOE’s Green Power Network website:


Green Power Marketing in Retail Competition: An Early Assessment

(report #  LBNL-42286,    NREL/TP.620.25939)
Ryan Wiser LBNL,    510-486-5474;
Jeff Fang, Kevin Porter, and Ashley Houston,  NREL

February 1999


Green power marketing—the business of selling electricity products or services based in part on their environmental values—is still in an early stage of development. This Topical Issues Brief presents a summary of early results with green power marketing under retail competition, covering both fully competitive markets and relevant direct access pilot programs. The brief provides an overview of green products that are or were offered, and discusses consumers’ interest in these products. Critical issues that will impact the availability and success of green power products under retail competition are highlighted. Some of the key observations and conclusions of the work include:

Experience from pilot programs in New Hampshire, Massachusetts, and Oregon—while insightful in many respects—should not be broadly generalized. The direct access pilot programs in these three states all included green marketing. Yet only a fraction of the green products were differentiated based on their renewables content, and the environmental quality of many of the products has been questioned. Because of the nature of pilot programs, however, there are limits to what can be learned from these experiences.

Green power markets have developed in all four states currently open to full competition. Experiences in the more fully competitive markets of California, Massachusetts, Rhode Island, and Pennsylvania provide a more realistic test of green marketing. These markets have only been open for a short time, and each differs substantially. Green power marketing is occurring in each market, however, and a total of 20 green power products have been launched. All of these products have been differentiated based on their renewables content, and 60% of the products include commitments to incorporate some new renewables over time. While concerns remain over the environmental and resource content of some products, overall product quality is superior to that seen in the pilot programs.

The availability and success of green power products will hinge on several factors, including the regulatory rules and public policies established at the onset of restructuring. Differences among the markets discussed here can largely be traced to the design of specific market rules and public policies, particularly the default generation price offered by incumbent utilities. For the green market to succeed, regulators and policymakers will have to develop market structures, rules and policies in ways that are at least neutral to, and perhaps even support, this emerging new market. Surprisingly, market rules that promote vigorous price competition and overall customer switching appear especially important.

Environmental disclosure requirements and certification programs may also play an important role in the success of green power markets. Given ongoing concerns about the credibility and environmental value of some of the green power products, customer information requirements and credibility-enhancing programs may be critical.

Evidence to date shows that green products have had some success in markets newly opened to competition. Niche markets clearly exist for green power. Residential demand has been most prominent, though nonresidential demand has been more significant than many expected. Nonetheless, it will clearly take time for the green market to mature, and there remain legitimate concerns about the ability of customer-driven markets to support significant amounts of renewable energy. Unfortunately, there is currently insufficient data with which to predict the long-term prospects for green power sales with any accuracy.