Getting off the grid; State buildings (CPUC!!) experiment with on-site power systems

San Francisco Chronicle ^ | February 19, 2003 | Dan Levy, Chronicle Staff Writer

[Robert357]

....With memories still fresh from the energy crisis that sent California's electricity prices soaring, commercial landlords are beginning to install on- site power systems, known as distributive generation, as a way to lessen dependency on the Pacific Gas and Electric Co. grid.

.....The state of California could end up running the most influential experiment with on-site power, with tens of millions of square feet of office space potentially using the technology.

So far, the state has installed pilot systems in the state office building on Golden Gate Avenue, the Public Utilities Commission headquarters on Van Ness Avenue and the Elihu Harris building in Oakland.

"If the state decides this is a good business, we'll start building them into our new buildings," said Randy Ferguson, head of energy management for the General Services Agency, which runs state buildings.

The on-site systems in the three state buildings have saved about $80,000 annually in energy costs so far, Ferguson said.

There's also an environmental justification for the generators, proponents say.

On-site systems run on natural gas during peak demand hours, producing electricity that augments the electricity supply being taken off the grid. They are designed so that waste heat produced by the system is recycled to cool and heat the building.

This lessens the load on utilities, which don't have to provide a building's total electricity needs, while conserving energy and saving money.

It's a point not lost on the nation's largest office landlord.

"There is absolutely no reason why this shouldn't be more widespread," said Frank Frankini, senior vice president for development and energy operation at Equity Office Properties, the Chicago real estate investment trust that controls about 125 million square feet of office space around the country.

EOP is seeking approval for an on-site generation plant at One Market, its 1.45 million-square-foot downtown office complex in San Francisco. The company has developed distributive generation systems in nine other buildings in Massachusetts, New York and Illinois -- all of which have deregulated their electricity market.

If approved, the One Market system could help EOP save 10 to 20 percent on its energy bills, Frankini said.

...The surge in distributive generation has its roots in the deregulation of California's energy market and the resulting crisis two years ago. Companies were beset by wildly inflated electricity prices and lost critical computerized data files when rolling blackouts shut down their power supplies.

Even with the nightmare stories from the crisis, few landlords are contemplating a full break from the PG&E grid.

...The Public Utilities Commission, for its part, is encouraging distributive generation development. Its own building on Van Ness Avenue has an on-site plant.

Commissioner Jeff Brown said that because large energy users are increasingly choosing to take less electricity from the grid, smaller users are in danger of paying more for the power contracts already signed with PG&E and other utilities.

As a result, the PUC might impose a surcharge on the energy produced by most distributive generation systems, Brown said. The idea is still in the proposal phase.

"People want to set up their own plants on site, but does this mean we allow another class of people to pay through the nose for these power contracts?" Brown said. "It's quite a controversial subject."

"All the indications we have from the governor's office and the Legislature is that the state will be distributive generation-friendly," said Dan Cashdan, chief executive of RealEnergy.

[Robert357]

No harm, no foul. I will now be more restrained in the future in the use of "Breaking News." This is the first time I saw it defined in any kind of way. I have used it in the past to define articles that didn't fit other categories, but were very current.

Thanks for the information

[Robert357]

Why even bother?

As usual, you have sumarized the issue nicely. :)

[Robert357]

What is the future of this experiment...

The future of decentralized generation in California (this experiement) is pretty dismal if they impose a step exit fee.

[Robert357]

Wasn't there an article here about ..... going off-grid an EXIT TAX?

I think you were talking about this article that the SF Chronicle published on taxing solar power facilities.

I hope that is the one you were thinking about.

[Ernest_at_the_Beach]

Thanks for posting this !

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[Amerigomag]

To begin with the whole circumstance is skewed because the "grid" is limited to only a portion of the state.

The obvious fix is no fix at all ... appropriate that part of the grid that affects your community.

I'm frankly surprised that some counties, or municipalities, next to the Sierras simply haven't appropriated the private, hydro generating facilites and delivery grid regardless of the short term costs.

Some rural counties could survive from hydro power alone even in drought years.

[NativeNewYorker]

Yep. Thanks.