Tiered Electricity Rates

What Matters Most penned the following letter-to-the-editor in response to The Los Angeles Times op-ed below it.

Rate hikes by the L.A. Dept. of Water and Power are inevitable and infrastructure upgrades are only partly responsible. The entire state must reduce greenhouse gas emissions under AB 32, California's landmark climate-change law. Since DWP gets 47 percent of its electricity from coal--the leading source of CO2--mitigating this source will cost even more. The question is how to fairly implement these significant new costs.

I encourage DWP to start charging tiered rates, like Southern California Edison does.

Under this system, the more power you use, the more you pay. SCE's first and lowest tier customers pay about $.10 per kilowatt hour, its fifth and highest tier customers pay about $.34 per kWh. Every household gets a few hundred kWhs at the cheapest price, but as the usage goes up, the price goes with it. This provides a natural incentive for conservation and waste reduction, two environmentally friendly measures in themselves.

DWP, meanwhile, charges a flat $.10.5 cents per kilowatt hour. With a tiered system, the utility could actually reduce its lowest rate so that the poor could get a slight break, while the wealthy or wasteful would have to pay a more equitable price for what they use.

DWP's lessons from the heat wave

The Department of Water and Power needs expensive upgrades, which will require rate increases.

By H. David Nahai

September 17, 2007

In the week leading up to Labor Day, a searing heat wave gripped Los Angeles. Temperatures soared into the triple digits, and the very air seemed to be on fire. The oppressive heat claimed more than a dozen lives in the county before the temperatures dropped. At the height of the crisis, nearly 30,000 of the L.A. Department of Water and Power's customers were without power, and more than 90 crews were struggling with scattered outages throughout the city.

Some think the heat "storm" was an anomaly that probably won't be repeated. Others contend that even if it recurs annually, we should not invest heavily to address a one- or two-week event. After all, at the height of this year's heat storm, only about 2% of the DWP's customers were without power, and outages were restored quickly (in less than 48 hours, 27,000 customers had their power restored, and three-quarters of customers experiencing any outage had power again within 24 hours). In the DWP's territory, heat-related deaths were not because of power outages, and overall, the utility's performance reflected some improvement over last summer. In the end, the DWP fared no better or worse than other utilities.

That, however, isn't good enough.

To begin with, climate change is a reality, and heat storms may be a symptom of it. After two successive summers with prolonged periods of stifling heat, we must consider ourselves warned about the shape of things to come. Second, power outages in such times take an enormous toll in terms of immediate human misery, not to mention higher healthcare costs and lost economic productivity. Third, it is scant consolation to those suffering without electricity during a heat storm to be told that the other 98% are doing just fine; after all, we all pay for the service.

We also have to remember that the DWP's infrastructure is aging; some of it is 40 to 70 years old. Throughout the heat storm, our L.A. power plants labored like old workhorses, devoted but stressed. The rest of the strained system (transformers, circuits, poles, wires, etc.) creaked but held up, partly because of an aggressive program of replacing about 3,000 transformers over the last year. DWP crew members, who deserve our gratitude, were stretched to the limit, working 16-hour shifts for eight straight days, even with the help of outside, private crews. Next summer may be even more challenging.

It is clear that we have to recognize a new reality. We have to upgrade our infrastructure, we have to redesign our system to accommodate greater demand volatility, and we have to add staff.

That is why the department's 2007-08 budget (adopted by the DWP Board of Commissioners in June), calls for a billion-dollar investment over the next five years to renovate our infrastructure. The budget also includes 768 new positions to address staffing shortfalls and makes an unprecedented investment in energy conservation and efficiency programs.

All of these crucial initiatives -- and others related to diversifying our energy sources -- need time and money. It is indisputable that we will have to have some increase in base rates in order to meet these challenges. The rate increases called for in the DWP budget -- the need for which has been independently verified by an auditor retained by the City Council -- will be considered by the council this fall. They are fairly modest, about 3% a year for three years (which translates to annual raises of about $1.75 per month for the typical household), and they are vital. They represent the investment we must make in order to secure sufficient, dependable, cost-effective electricity for the future.

In an L.A. Times column just as temperatures cooled, Steve Lopez, infuriated at experiencing an outage, declared that he should be exempted from any future rate increases. But the problem is that we all have been exempted from rate increases. In fact, the last base rate increase we had in L.A. for power service was in 1992, 15 years ago, and our rates are as much as 30% to 50% lower than those of other comparable utilities.

The lessons of the heat wave of 2007 should be heeded. We can substantially diminish the pain, inconvenience and economic damage that are the consequences of heat-induced power outages. It's time to take care of the future.

H. David Nahai is president of the Los Angeles Board of Water and Power Commissioners, which oversees the operation of the DWP.

"Green Journalists" just don't get it.

Abigail Goldman is guilty of the same offence as most all the “green building” reporters I’ve seen to date. Rather than informing us of the true metrics we need to know about what makes a house efficient, we get more of the same ignorant terminology.

The environmental effects of a building have to do with the energy and resources used in its construction combined with the energy and resources used throughout its life. The energy metrics are measured in kilowatt hours (kWh) of electricity and therms of natural gas while the water is measured in HCF (hundreds of cubic feet – 748 gallons = 100 cubic feet).

None of these crucial measurements were anywhere to be found in the article.

Unless people understand what kind and how much energy they use as well as the amount of water and the environmental consequences of using these resources, they will remain ignorant of the true cost to society and the planet of their respective lifestyle choices.

It does nobody any good to read of how many solar PV panels one uses if we don’t know the rating of the panels. Were they 75 watt panels or 210 watt panels? What we need to know is how many kWh do those panels generate in a month and how many kWh do we as a family use. That’s information we can use.

And for the U.S. Green Building Council acting director of the homes program, Jay Hall, to be quoted as saying solar PV is a “fad” is unconscionable. If he indeed said such a thing, he does not deserve to be a director of the USGBC. He is also quoted as saying the average cost of a PV system for a 2,000 sq. ft. home is $40,000. Again, this doesn’t tell us anything of value. It actually serves to scare people off of solar. We don’t know how many kWh this 2,000 sq. ft. home uses or how many kWh the $40,000 PV system will generate.

I have seen 2,000 sq. ft. homes that used less than 400 kWh/month and some that used well over 3,000 kWh. This is a huge range that runs through all house sizes. So, trying to “educate” the public on green building by using such useless information does a serious disservice to the readers of The Times.

I suggest that any journalist who wishes to truly educate their readers begin by reading their own utility bills and get a handle on how much energy and water they use, then write about what it would take to reduce their own consumption. That learning experience will generate a much better article.--Paul Scott

http://www.latimes.com/business/la-fi-greenhouse29jul29,1,3912777.story?ctrack=6&cset=true

Living green, by design

One home is efficient and thrifty. The other is stylish and opulent. They both help the planet.

By Abigail Goldman, Times Staff Writer
July 29, 2007

DONNA SIDER painstakingly renovated her 1,000-square-foot Pasadena home to be more energy-efficient as a way to save money and help the environment at the same time.

Jeffrey Eyster built an eco-friendly, 2,200-square-foot dream house in the hills above Laurel Canyon, in tune with his appreciation of fine architecture, superior materials and healthful living.

Eyster's home demonstrates that luxury and cutting-edge design can be integral to environmental construction.

Sider's is proof that going green doesn't require a lot of gold. Their efforts can serve as examples to homeowners who want to fight global warming or trim their household expenses, or both. And the payoffs in both areas are substantial, environmental leaders say.

"Forty percent of America's carbon emissions comes from buildings — almost half — and utility bills are a major factor in household bankruptcy," said Carl Pope, executive director of the Sierra Club. "You can reduce your utility bill by 50% or 60% relatively easily. That's one-fifth of the total carbon emissions today. It's a huge part of what we have to do."

Making those eco-friendly changes at home has become simpler and more affordable.

"Five years ago, the environmentally healthier or higher-performing building materials and products were harder to find. It was still a niche market, and they were more expensive," said Charles Lockwood, a Santa Monica-based environmental real estate consultant. "Now, you see Home Depot offering eco-options.

"This brings it down to everyday Americans. You don't have to go to a special place to find it. It's right there and at a good price."

Home builders and buyers also have a better way of identifying environmentally friendly homes, thanks to the U.S. Green Building Council's seal of approval.

The group's residential Leadership in Energy and Environmental Design Green Building Rating System will be formally launched this fall after a two-year pilot program. It was designed to encourage builders to keep the costs of green homes similar to those of traditional new houses, the council said.

To get the group's most basic certification, a builder would have to spend about 3% more, or $10,000 on a $300,000 home, the national average price for a new house. Amortized over a 30-year mortgage, that extra $70 a month is easily made up in energy savings, said Jay Hall, acting director of the homes program.

"If they cost the same on a monthly basis, which one would you rather have?" Hall asked.

Sider already has answered that one. "I wanted to be a part of doing what I could in my own home to make these changes," she said.

Sider's long road to transforming her two-bedroom home began shortly after she bought it in 1999. With a limited budget, the 49-year-old registered nurse saved up and attacked her projects as she could afford them, doing much of the work herself and enlisting the aid of friends and family.

When she began her energy-saving projects, she paid about $200 every two months for water and power. When she finished, this summer, her bill had dropped to about $60.

Eyster, a 36-year-old architect, became a green believer when he was evaluating the costs of building a home on a 5,700-square-foot lot just off Laurel Canyon Boulevard near the Mount Olympus neighborhood. His wife, real estate agent Alla Furman, bought the lot five years ago for $30,000.

Eyster opted to save money by constructing beams from small pieces of Douglas fir pasted together with environmentally friendly glue. The engineered wood was easily carried up the steep hill, unlike large, old-growth timber, which would have required a crane.

"It didn't start from a philosophical position," Eyster said. "It just made sense."

His bright and airy but compact house is all about making sense. The tiny 6-by-3-foot downstairs powder room with low-flow electric toilet maximizes space and water efficiency; LED track lamps throughout the house will last 40,000 hours, as opposed to old-style 2,000-to-5,000-hour bulbs.

By the time the couple and their two children moved in two months ago, the house's cost had swelled to about $1.2 million, financed with a $600,000 construction loan and round after round of refinancing to free up cash for the project.

more....

A Malthusian Scenario

Niall Ferguson says, “Some people worry about peak oil -- when we reach the peak of petroleum production. I worry about peak grain.”

Ferguson should be worried about peak oil, too, because those two concepts are inextricably entwined. Those like Malthus who made dire predictions in the '60s about overpopulation were derided because their calculations didn’t come to pass. It's true: instead of hundreds of millions of starving people, we merely had a few million, and that was due more to geopolitical problems of food distribution than the ability to farm.

The difference was our newfound ability to use petrochemicals to make fertilizers that increased crop yields worldwide. And today our global population stands at 6.5 billion instead of 4 billion. At least two of those billions are people who are alive primarily due to fertilizer use. But once peak oil arrives and the price of these fertilizers doubles and triples, what will happen?

A Malthusian scenario is indeed in our future and it isn’t going to be pretty.--Paul Scott

http://www.latimes.com/news/opinion/commentary/la-oe-ferguson30jul30,1,354484.column?ctrack=5&cset=true

Malthusian misery's comeback

With the world population growth outpacing food supply, say goodbye to the era of unlimited improvement.

July 30, 2007

The great demographer and economist Thomas Malthus was 23 years old the last time a British summer was this rain-soaked, which was in 1789. The consequences of excessive rainfall in the late 18th century were predictable. Crops would fail, the harvest would be dismal, food prices would rise and some people would starve. It was no coincidence that the French Revolution broke out the same year.

Nine years after that summer, Malthus published his "Essay on the Principle of Population." We would do well to reread it today. Malthus' key insight was simple but devastating. "Population, when unchecked, increases in a geometrical ratio," he observed. But "subsistence increases only in an arithmetical ratio." In other words, humanity can increase like the number sequence 1, 2, 4, 8, 16, whereas our food supply can increase no faster than the number sequence 1, 2, 3, 4, 5.

We are, quite simply, much better at reproducing than feeding ourselves.

Malthus concluded that there must be "a strong and constantly operating check on population." This would take two forms: "misery" and "vice," by which he meant not only alcohol abuse but also contraception and abortion (he was, after all, an Anglican minister).

I wish I could have a free lunch for every time I've heard someone declare "Malthus was wrong." Superficially, it is true, mankind seems to have broken free of the Malthusian trap. The world's population has increased by a factor of more than six since Malthus' time. Yet the global average daily supply of calories consumed has also gone up on a per capita basis, exceeding 2,700 in the 1990s. In France on the eve of the revolution it was just 1,848.

The conventional explanation for this is the succession of revolutions in global agriculture, culminating in the postwar "green revolution" and the current wave of genetically modified crops. Since the 1950s, the area of the world under cultivation has increased by roughly 11%, while yields per hectare (about 2 1/2 acres) have increased by 120%. Yet these statistics don't disprove Malthus. As he said, food production could increase only at an arithmetical rate, and a chart of world cereal yields since 1960 shows just such a linear progression, from below 1 1/2 metric tons to around 3.

Meanwhile, vice and misery have been operating just as Malthus foresaw. Contraception and abortion have been employed to reduce family sizes. And wars, epidemics, disasters and famines have significantly increased mortality. Together, vice and misery have managed to reduce the rate of population growth from 2.2% annually in the early 1960s to about 1.1% today.

The real question is whether we could now be approaching a new era of misery. The United Nations expects the world's population to pass the 9 billion mark by 2050. But can world food production keep pace? Plant physiologist Lloyd T. Evans has estimated that "we must reach an average yield of 4 tons per hectare to support a population of 8 billion." Yields now are just 3 tons per hectare, and a world of 8 billion people may be less than 20 years away.

Meanwhile, man-made forces are conspiring to put a ceiling on food production. Global warming and the resulting climate change may well be increasing the incidence of extreme weather events, as well as inflicting permanent damage on some farming regions. At the same time, our effort to slow global warming by switching from fossil fuels to biofuels is taking large tracts of land out of food production.

Some people worry about peak oil -- when we reach the peak of petroleum production. I worry about peak grain. World per capita cereal production has already passed its peak -- in the mid-1980s -- not least because of collapsing production in the former Soviet Union and sub-Saharan Africa. Meanwhile, rising incomes in Asia are causing a worldwide surge in food demand.

Already, the symptoms of the coming food shortage are detectable. The International Monetary Fund recorded a 23% rise in world food prices during the last 18 months. Of course, we're not supposed to notice that prices are going up. In the U.S., the monetary authorities insist that we should focus on the "core" consumer price index, which excludes the cost of food and fuel, and has the annual U.S. inflation rate at just 2.2%. But food inflation is roughly double that.

When I wanted a Philly cheese steak last week, I had to pay through the nose. That's because cheese inflation is 4%, steak inflation is 6% and bread inflation is 10%. Steak is now 53% dearer than it was 10 years ago.

"The great question is now at issue," Malthus asked more than 200 years ago, "whether man shall henceforth start forwards with accelerated velocity toward illimitable, and hitherto unconceived improvement, or be condemned to a perpetual oscillation between happiness and misery?"

For a long time, we have deluded ourselves that "illimitable improvement" was attainable. As the world approaches a new era of dearth, misery and its old companion, vice, are set to make a mighty Malthusian comeback.

nferguson@latimescolumnists.com

John Edwards is Off My List

After reading “Change on the Cheap” by Gail Collins (see below) I am expunging John Edwards from my list of potential presidential candidates. I can't even consider him VP material, thanks to his disingenuous, disgraceful dissembling when asked whether his policies on global warming would require families to pay more for “everyday products.”

Anyone paying attention to the global energy scene--and I would necessarily expect a leading presidential candidate to be included here--should know that the price of all our energy sources is poised to spike as the costs of mitigating CO2 and other deadly pollutants are internalized. To claim otherwise belies either ignorance or dishonesty.

Indeed, for once it would be refreshing to hear our candidates speak the truth, rather than lying about the reality of the coming energy crisis. Perhaps our alleged leaders fear that the truth will cost votes--which speaks volumes about their assessment of the American character. Do they believe that Americans are too selfish to pay the true cost of the energy that sustains our way of life? Is that what you’re saying, John Edwards?--Paul L. Scott

By Gail Collins/New York Times/July 26, 2007

John and Elizabeth Edwards were sitting at a camera-friendly spot along a coastal creek in South Carolina the other day, talking with environmentalists about global warming, when Mrs. Edwards mentioned that she was prepared to give up tangerines.

Much of the next hour was devoted to reporters’ attempts to clarify this matter. John Edwards has a plan to cap carbon emissions, while allowing businesses to buy the right to go over their quotas. Many people regard this as the most efficient and politically salable way to reduce greenhouse gases. But they usually acknowledge that it would make some products — like small orange fruits that have to be transported a long way to get to market — more expensive.

“I live in North Carolina; I’ll probably never eat a tangerine again,” Elizabeth said. To be utterly honest, the first reaction to this on the part of many listeners was that the Edwards family could afford to continue eating tangerines even if they became more costly than a two-family house in Des Moines. But we digress.

Was Mr. Edwards prepared to admit that the public might have to give up tangerines in order to keep the polar bears from drowning in the Arctic? “I’d have to think about it,” he said during a press conference later that day. This was actually his second answer, the first being a short, utterly unrelated disquisition on food safety inspections.

The Edwards campaign has devoted immense effort to beating back the image of their candidate as The Man With the Expensive Haircut. They don’t want to make August the month for The Man Who Would Take Away America’s Citrus Fruit. Still this was, in its little tiny way, an integrity litmus test. Edwards is supposed to be the candidate with the “big, bold positions.”

Asked for his top three priorities at a meeting with steelworkers here, he named four: end the war in Iraq; achieve universal health care; end global warming; end poverty and inequality in America. Can you have this kind of to-do list without a price tag? Nobody expects politicians to dwell on the down side of their ideas. You just want some assurance that there’s an intellectual honesty at work, and that deep down, a candidate appreciates how tough big, bold change — or even small wishy-washy change — will be.

And we want to think big and bold. It’s early in the presidential campaign; we should be savoring possibilities. There will be plenty of time later to sink into depression and decide that the best we can hope for is someone electable who will refrain from invading inappropriate countries.

On tangerine day, the first stop of the Edwards campaign had been Kitty’s Soul Food in Charleston, where some people waited two or more hours just to see the candidate and shake his hand. The early arrivals included P. J. Veber, whose husband dropped her off on his way to work at 8:30, and Katharine Bloder, a teacher who just wanted to “ask him to get us out of Iraq.” Mitch and Mandy Norrell drove 176 miles from the small town of Lancaster where they have a joint law practice.

The Norrells, like Edwards, were the products of striving families of textile workers. Mandy specializes in bankruptcy law, and “about a third of my filings are people who have to choose between mortgage and medical bills. That’s why I love John Edwards. He gets it.” All the serious presidential contenders have supporters like this. The best candidate is going to be the one who comes closest to deserving them.

Which brings us back to the question of whether John Edwards is capable of admitting that his plan to end global warming — to save the planet — might require some American sacrifice on, say, the tangerine front. “It does have a cost impact. No question about it,” the candidate said at the end of the day, as his car bounced along to the airport.

Elizabeth Edwards joined in, pointing out that if produce that was shipped and trucked from far away got more expensive it would create incentives for people to buy locally grown fruits and vegetables. “I think that’s a good thing,” she said. "And she likes tangerines,” her husband laughed. And the sun shone brightly on the tarmac as John Edwards, having said something candid, flew off into the horizon.

Yesterday morning, a spokesman for the Edwards campaign called to clarify his position. The global warming program would not require families to pay more for everyday products, he said. “We are optimistic we will not have to raise the price of tangerines.”