How budget ‘trailer bills’ get misused

To understand a sharp-elbows squabble that’s developing behind the scenes in the state Capitol, one must first understand “pumped-storage hydro,” a way for electrical energy to be stored.

In its simplest form, water stored in a reservoir is released to generate power as it flows into a second reservoir at a lower elevation. Later, when the electrical grid’s need for power diminishes, the water is pumped back into the upper reservoir so the cycle can be repeated when demand increases.

It’s not a new technology; in fact it’s been around for more than a century although never more than a marginal factor in global power generation. However, it’s drawing more interest of late in California because the state is pushing hard, in the name of battling climate change, to eliminate natural gas-fired generation in favor of wind, solar and other sources that do not emit greenhouse gases.

Just this month, the California Public Utilities Commission ordered PG&E, Southern California Edison and the other utilities it regulates to acquire 11.5 gigawatts of zero-carbon generation to replace gas-fired and nuclear plants that will soon be shuttered. The PUC is also ordering massive amounts of new power storage, needed because the sun doesn’t always shine and the wind doesn’t always blow.

Huge banks of lithium batteries are the most likely form of that storage, but pumped-storage hydro is another potential source, and with the PUC’s order creating a new market, promoters of specific storage projects are trying to cash in.

One of the state budget “trailer bills” proposed by Gov. Gavin Newsom, but not yet fully drafted and released, would provide subsidies for energy projects that further the state’s zero-carbon goals.

With hundreds of millions of taxpayer or ratepayer dollars on the table, sponsors of storage projects are scrambling to gain the upper hand.

One potential contender is called Lake Elsinore Advanced Power Storage or LEAPS, which would use a Riverside County reservoir of that name and would, its corporate sponsor says, provide up to 500 megawatts of power for Southern California consumers. Its application for licensure has been pending at the Federal Energy Regulatory Commission for several years.

LEAPS has a rival called Eagle Mountain, also in Riverside County, but 150 miles due east near Joshua Tree National Monument. The Eagle Crest Energy Co. wants to convert an old iron mine into a pumped-storage project that would provide up to 1,500 megawatts of power.

Eagle Crest, a subsidiary of Florida-based NextEra Energy, has repeatedly pushed legislation to give it a leg up in the energy storage competition, to no avail. But Newsom’s trailer bill on energy could be another opportunity.

Budget trailer bills are a time-dishonored way of slipping things through the legislative process, and as this year’s versions are being drafted, special interests are circulating self-serving items for inclusion, many of which have little or nothing to do with the budget.

One such proposal, being pushed by Eagle Mountain’s boosters, would not only tailor energy storage contract specifications to its project, but specifically exclude LEAPS from consideration, alleging that it “has failed to pay its outstanding debt to the Public Utilities Commission for environmental analysis.”

The Eagle Mountain-friendly proposal also has drawn fierce opposition from a coalition of environmental and agricultural groups, saying the project “would overdraft sensitive aquifers under and surrounding Joshua Tree National Park and encroach upon protected wildlife habitat.”

The tri-cornered squabble exemplifies how the opaque misuse of trailer bills has become a procedural scandal.