What Could Be Changed?

                                                                                  written 14 September, 2025

                                                                              published 21 September, 2025

   

            Last week I described our current electrical power situation, listing the forces demanding change, and how Ukiah has a unique opportunity.  Let's consider what that might look like in terms of economics.

            Ukiah buys power from the Northern California Power Agency (NCPA), which contract with power providers, and owns some generation facilities.  What we pay for this power is determined by how many megawatt hours we use in each five minute increment, times the cost of the power as set by the statewide power market at that moment.  The power is shipped to Ukiah over the transmission grid owned by PG&E, which charges a flat rate for each megawatt hour.

            In 2019, the annual average wholesale cost per kilowatt hour (KWh) paid to NCPA was 4 cents, with another 2.5 cents paid to PG&E.  This wholesale cost of 6.5 cents was 41 percent of the residential retail rate of 15.4 cents.

            Though the retail rate charged to Ukiah customers is constant throughout the day, the wholesale rate Ukiah pays to NCPA varies wildly.  Over the course of a single day, prices can change by more than a factor of ten, as the total demand on the grid changes.  Power is cheapest midday, when all the solar production in the state is pushing power onto the grid, and most expensive in the evening as the sun goes down.

            This daily swing provides an economic opportunity.  With sufficient local battery storage, cheap midday power can be stored and then used in the evening instead of buying expensive power off the grid.  In 2019, battery costs and service life at the time meant storage could save about 1/4 of the cost of the battery.  However, in the last 6 years, battery chemistries have changed, costs have dropped significantly, life times have more than doubled, and our wholesale power costs have almost doubled, so a battery today would save about twice the cost of the storage system.

            About 30 percent of NCPA power is generated from finite fossil fuels, vulnerable to increases in global fuel prices.  All power brought into Ukiah is subject to increases PG&E unilaterally makes on their shipping rates.

            Consequently, Ukiah could help stabilize power costs by collecting some solar power locally.  Being collected locally, there is no payment to PG&E for shipping.  The cost of the hardware is a fixed cost for the life of the equipment, which can be decades.  Other than that, the power collected is free.   

             A simple survey of Ukiah shows we have enough commercial roof top area and parking lot area to install over 40 megawatts of solar array.  However, some of the buildings might not be structurally able to bear the weight of solar on the roof.  Many of the businesses don't own their parking lots.  Sorting all that out would take time.  But the simplest situations could be developed first.  Additionally, Ukiah owns some vacant land within the city limits, and land outside the city limits could be purchased to install even more arrays.

            When the Ukiah School district used grants to install canopy arrays on three of their campus parking lots, they paid about $3 per watt.  Over an expected 25 life of the system, that will produce power costing about 8 cents/KWh, which is less than we currently pay for our wholesale power today.

            But beyond just saving money in the normal course of affairs, local power production and storage builds power resilience in the face of grid blackouts, which promise to become more frequent due to growing climate impact and rapid demand increases stressing our aging and limited grid system.  In 2019, Ukiah experienced a four-day planned PSPS grid shutdown.  Ukiah lost about $7M in business sales and another $1M in spoiled food.  We were fortunate the event didn't last any longer, as ice used for cooling food was at the limit, and backup power systems at cell towers and other critical facilities were reaching their planned limits.  Having some power for our critical social and economic functions is a form of insurance against that kind of adverse economic impact. 

            But the Distributed Resource Operation (DRO) electrical system described above needs money up front, as we are prepaying our electric bill for the next 25 years.  Furthermore, operating a DRO requires a more complex power management structure than our existing utility.  Addressing these concerns from the beginning is essential.  Stay tuned.

The Current Situation

                                                                                    written 7 September, 2025

                                                                              published 14 September, 2025

    

            Commercial electrical power production began in 1882.  The basic structure remains the same today.  Power is produced in a few central locations, mostly generated by falling water or combustion of finite resources, then shipped over a transmission grid, and distributed to local loads.  The electrical grid is now the largest man-made structure, central to most all of life and commerce.  But the situation is being challenged to change. 

            Those who understand the climate crisis is real know we have to stop adding any more carbon dioxide to the atmosphere: decarbonizing the economy.  This will require about 3 times more electricity to replace all fossil fuel usage.  Additionally, power demand has increased with the sharp rise in data centers, AI, and crypto currency, with some estimates projecting another factor of 3 increase in power consumed. 

            At the same time, the global supply of fossil fuels has been diminished by centuries of extraction.  All the cheapest reserves are already depleted.  While plenty still exists, it is more costly to extract every year, reflected in constantly rising energy bills.  We currently live at a tipping point, where the cost to produce these fuels is becoming greater than the economy can support. 

            Furthermore, the grid we have today is aging out, barely able to handle normal loads, let alone the massive increases coming.  As the climate heats up, summer air conditioning loads threaten to crash the system.  Environmental threats from fires and storms are increasing, making power reliability more precarious.  Expansion of the grid is expensive and time consuming, making electrical availability more problematic.

            However, power production technologies have evolved, no longer limited to resource extraction.  Grid scale power can be collected from the sun and wind and the power stored until needed.  This can be large centralized grid scale systems, or smaller, more distributed installations, located closer to where the power is consumed, reducing transmission congestion.  

            Whether driven by climate reality, economics, or rapidly expanding power demand, a future based on renewable energy is no longer just possible: it is inevitable, despite the foolish federal denial.  Just as coal, steam power, and railways defined the 19th century, and oil, steel, and mass production defined the 20th century, so too will renewables and electrification define the 21st century.  The question is how fast will it occur, and which nations or communities will lead.  Now is the opportunity to embrace a fundamental transformation of the power system. 

            But the political, economic, and regulatory structures that grew along with the traditional power system still function, controlling what happens on the ground.  As with many systems, these are designed to protect the status quo and the centralized money structure that constrains everything.

            In our area, electrical power is controlled by PG&E, the largest utility in the state, and the California Public Utility Commission (PUC), which sets the rules for connection and operation.  In the 1990's, California deregulated the electricity market, allowing anyone to build power plants, in part due to rising solar generating capacities.  PG&E mostly left the power production business, keeping a few generation resources, but retained ownership of the transmission and distribution systems.  Through its economic might, PG&E dominates the PUC.

            What this means in practice is that nobody can connect to the power system, either to produce power or use power, without permission from PG&E.  Nobody can share power across property lines, without permission from PG&E.  However, there are a few very specific exceptions where PG&E permission is NOT required.

            On your own home or business, behind a single power meter connection to the larger grid, you can install solar arrays and storage, as long as you never push power back out onto the system.  Tribal entities have dominion over their reservations, and can install and operate their own power systems.  Communities with municipal power systems can install and operate power systems within their defined territory.  In Mendocino County, only Ukiah has its own power utility, creating a unique opportunity.

            The power system of the future will be communities with local power resilience.  By producing some power locally, dependance on the grid is reduced, maximizing utilization of our existing infrastructure.  Storing power locally allows cheaper power to supplant expensive evening power, increasing economic efficiency.  Building resilience throughout the power system insures against debilitating consequences from grid unreliability, because some power is better than no power in an emergency.

            The City of Ukiah can explore these possibilities.  Let's become leaders.

 

 

 

 

Artificial Intelligence (AI)

                                                                                        written 31 August, 2025

                                                                                published 7 September, 2025

     

            Everyone has heard about AI, but before we examine the artificial, let's discuss the real.  

            When we consider intelligence, we usually think of logical ability.  This quality of the left brain, which processes differences, sequences, and concepts, is where our personal sense of self resides.  While logic is powerful, it rests on assumptions which can never be examined within the logic itself.  Anything can be proven logically given the right assumptions.   

            Our habitual assumptions are laid down by patterns from our family and cultural, but new assumptions come as insight, inspiration, and creativity, through the right side of the brain.  These arise from our fundamental connection with all life.  Therefore, whenever we hear a logical proclamation, before accepting the conclusion, it is important to consider the assumptions behind the logic, which are usually unexpressed.

            There are other forms of intelligence, such as emotional or social intelligence, required for a harmonious society.  Without this type of intelligence, people can be logically smart, but terrible partners or co-workers.  Street smarts are another type of intelligence not based on logic alone.  Some people are very intelligent in some areas, and incompetent in others.

            AI, more technically called Large Language Models, arises from the explosion of computer speed, complexity, and capacity, producing transformative results in many fields, particularly in the world of medicine.  For example, AI can calculate the shape of proteins from the originating DNA sequence.  What used to take years can now be resolved in hours, and has revolutionized the pharmaceutical industry.  Reading medical images has improved using AI.

            AI has attracted massive amounts of investment from people wanting to get in on the next new thing and become the world's first trillionaire.  AI is now mentioned in all kinds of products, even if it doesn't make any sense.  

            But being computer programs, AI systems are based on logic, which means they are subject to the unexamined assumptions of the programmers.  AI systems have been trained on everything that has ever been written and therefore affected by those cultural assumptions as well.  Since there is no capacity for insight, there is little chance for any fundamentally new assumptions.  Therefore, it is no surprise that AI demonstrates some of the worst aspects of humanity.  They lie, fabricate, hallucinate, and fight back when threatened.  But they do it faster than humans can respond.  

            AI presents other social challenges.  Mechanization has always displaced blue collar workers, but AI is now displacing white collar workers.  With unlimited AI, anyone now studying to become a computer programmer or lawyer will probably be obsolete by the time they graduate.  Autonomous vehicles, a consequence of distributed AI, will displace millions of commercial drivers.  Unemployment resulting from AI has been projected to be 20 percent within five years.  This could save billions for the corporations, but would be devastating for society. 

            More dire concerns are the malicious use of AI power for disinformation or creation of new biological weapons.  Drones with AI capacity have already changed the nature of warfare, as demonstrated in the Ukraine.  As AI gets faster, cheaper, and can now even run on laptops, these concerns will increase with more wide spread usage.    

            Even without malicious applications, the explosive growth of AI threatens the electrical power production and grid delivery systems, by requiring tens of gigawatt hours of power, operating around the clock.  Electricity rates have already gone up, as these corporate entities outbid regular consumers.  The transmission grid is barely adequate for the existing demand, let alone the AI push, making power availability more problematic for everyone.

            The rising demand from AI server farms is driving the push to build more expensive gas turbines and nuclear plants, and even reopening decommissioned nuclear plants.  But these quick construction plans run up against the reality of constrained supply chains, hindering the execution of such ambitious desires.  

            Finally, the massive amount of money being poured into AI has created a speculative bubble which threatens the economy, with about 20 percent of retirement funds now invested in AI businesses.  But useful applications of AI seem to be falling short of expectations.  MIT recently reported that 95 percent of AI companies fail without returning a dime to investor.  Reality may crash the whole industry.

            As we let AI replace human intelligence, it could destroy the society if it works, or crash the economy if it fails, fully expressing the limits of worshiping logic alone.