PSEG

PSEG’s Ralph Izzo: Greening the garden state

June 20, 2010

Before we discuss big issues like global warming, carbon pricing and renewable energy, I toss a couple of “lightning round” questions at Ralph Izzo, the chairman, president and CEO of  New Jersey-based PSEG, a $13.3-billion a year energy company with strong commitment to solar power and action to curb climate change.

Izzo, Ralph1First, Yankees or Mets? Izzo grew up in Queens (Mets country) and pitched for the baseball team at Columbia University (Yankee territory), where he earned an B.S. and M.S. in mechanical engineer and a Ph.D in applied physics. “Yankees, Knicks, Rangers, Giants,” Izzo replied. He’s still a big sports fan.

Second, Democrat or Republican? After a stint as a research scientist at the Princeton Plasma Physics Laboratory, Izzo worked as a science fellow in the office of Sen. Bill Bradley, a New Jersey Democrat, and then as an energy-and-tech policy adviser to New Jersey Gov. Tom Kean, a Republican. “Independent,” he said. “Pretty much down right down the yellow stripe.” True enough–he’s given money to George Bush and Hillary Clinton.

Third, nuclear power or “clean coal”? Much as it would be nice to light up the world with wind, solar or geothermal power, odds are that the U.S. will need nuclear power, coal or natural gas to provide baseload (i.e., round the clock) electricity for the foreseeable future. Izzo, as  a utility CEO and a scientist, gave nuclear his qualified endorsement over clean coal.

“The technology is in existence already,” he said. “It has a more benign environmental footprint. It doesn’t have the mercury, NO2, SO2 or carbon baggage. Having said that, all of our investments right now are in natural gas.” [click to continue…]

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Electricity that’s cheaper than free

October 27, 2009

Too much wind?

Too much wind?

Would you believe that there are places and times when power companies generate so much renewable energy that they give it away? In west Texas and Illinois, when the wind blows at night and nuclear plants run around-the-clock, power generators produce more electricity than people need. This oversupply “has forced electricity prices into the negative range,” an expert explains—meaning that some customers are paid to use electricity.

The expert is Terry Boston, and he knows what he’s talking about. Boston is the CEO of PJM, the company that manages the electricity grid that serves 51 million people in 13 mid-Atlantic states and Washington, D.C. It’s not an everyday occurrence but when demand exceeds supply, “cement manufacturing plants can get paid to take electricity,” he says.

It sounds crazy, but there’s a perverse economic logic at work. Owners of the wind turbines collect a production tax credit of 2.1 cents per kilowatt hour when they generate electricity, so they don’t want to shut the turbines down. So long as they pay customers less than the subsidy to consume power,  they make money.  Put simply, taxpayers dollars pay the wind companies who pass along a portion to their customers.

“It is not sustainable to have large negative prices for long periods of time,” says Boston. No kidding. Think about how you would behave if you were paid to use electricity. You can be sure no one at the cement company is chasing around turning the lights off.

One solution to this problem (aside from fixing the incentives) is energy storage, which would deliver other benefits as well. Ever since Thomas Edison invented the light bulb, people have been looking for cost-effective [click to continue…]

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