California foundation puts $10 million toward power research |

California foundation puts $10 million toward power research

SAN FRANCISCO (AP) – Was it high demand and short supply that triggered California’s energy crisis? Did power plants around the state stop making electricity just to hike prices as high as they could?

Questions like these are plaguing lawmakers and others assessing the state’s future energy needs. The William and Flora Hewlett Foundation hopes to answer at least some of them by funding a $10 million study of what went wrong and how to avoid future debacles nationwide.

”It was spurred by seeing what happened in California and realizing that even if the rolling blackouts are not a permanent feature in California, that there were lessons to be learned on what happened,” said Paul Brest, president of the Menlo Park-based nonprofit philanthropic foundation.

”The nation has to develop a long-term energy policy, and there’s relatively little funding going into assisting that process,” he said.

One of the goals of the project is to assemble a database of underground energy resources such as natural gas, oil and coal, and of electricity generated from solar, wind, geothermal and biomass power.

Experts will compare the costs and benefits of exploring for fossil fuels to expanding wind farms and the use of solar roof panels, and also will focus on the role conservation could play in a statewide and national energy policy.

The foundation has lined up Severin Borenstein, director of the University of California, Berkeley’s energy institute, Stanford economist Frank Wolak, the Rand Corp. think tank in Santa Monica and Robert Cialdini, a professor of psychology at Arizona State University to conduct the study, which will produce its first analyses within three months.

Helping low-income communities learn how to conserve energy and reduce their power bills is another aspect of the project, as well as understanding the psychology behind such actions, Brest said.

Wolak, who also works for the agency that operates California’s power grid, said he hopes to clarify whether the supply of electricity throughout the West and the state’s demand for it were ever out of sync.

”I certainly think it would be very valuable to make sure and get all facts out about what actually did happen in California,” Wolak said. ”There’s been an inordinate amount of claims and counterclaims but very few hard facts.”

The $10 million – among $200 million the foundation plans to donate to various projects this year – should support around two years of work, and the project could receive more funding if the analyses prove useful, Brest said.

Since January, the state Department of Water Resources has spent more than $9 billion at an average cost of $237 per megawatt hour buying electricity for the customers of three financially ailing utilities, according to internal DWR documents. That’s more than twice last year’s $114 per megawatt hour average.

Pacific Gas and Electric Co., Southern California Edison Co. and San Diego Gas and Electric Co. have reimbursed roughly $1.5 billion of the sum to the general fund. To collect the balance and help pay future power costs, the state plans to sell $12.5 billion of revenue bonds.

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