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Will PG&E give rebates for old air conditioners?

PG&E CEO Pete Darbee speaks out on energy efficiency, solar power and nuclear. He likes them all.

That ancient, inefficient heating/air conditioning system in your building might be worth something someday.

Pacific Gas & Electric CEO Pete Darbee said in a briefing with reporters Tuesday that the utility is working with government officials to see if there is a way to create a fund that gives building owners financial incentives to replace old compressors, pumps, and other building equipment with new, energy-efficient versions.

Building owners want to get rid of this old equipment, he explained, but the capital requirements are a big hurdle. The program could be structured in a way so that it could be funded partly through the utility bills paid by the customer.

The program would, in some sense, be similar to the residential energy rebate programs PG&E has run for years. Under those, PG&E gives cash rebates to homeowners who replace old washers and dryers with new ones. The utility has also underwritten programs to get consumers to replace incandescent bulbs with energy-efficient compact fluorescent bulbs.

Energy efficiency is the top priority in PG&E's effort to reduce greenhouse gas emissions. For one thing, energy conservation is less taxing on the environment than even getting more power from renewable sources of energy like solar panels.

Energy efficiency is also far cheaper. Technology for energy efficiency costs about 3 to 4 cents per kilowatt-hour, Darbee said. Harvesting energy from a renewable resource might cost 10 to 15 cents a kilowatt-hour or more. Rooftop solar panels have historically hovered around 40 cents a kilowatt-hour, he said. Energy efficiency standards implemented in California in the '70s also show that the programs work--energy consumption per capita has stayed relatively stable in the state since then but have risen substantially in other parts of the nation. Efficiency allowed California not to build 24 power plants in the last 35 years, he argued.

"The fact that you don't use power is the best strategy," he said.

Darbee, who has helped put PG&E at the forefront of greening utilities, spoke at length on a number of topics. Here are some of the highlights.

--PG&E is examining ways it can own its own solar thermal plants. Solar thermal plants--large, sprawling complexes that generate megawatts' worth of electricity from heat from the sun--are far more cost-effective than solar rooftop panels. "With solar farms, you can get down to 10 cents a kilowatt-hour," he said.

Technically, PG&E can build a solar thermal plant now, but it wouldn't qualify for the investment or production credits. That would put PG&E at a 30 percent cost disadvantage. Thus, if it can get that law changed, PG&E might build its own plant. Right now, the utility signs contracts to buy solar thermal-generated power from third-party companies like BrightSource Energy.

Why would it want to build and own solar plants? Solar thermal plants cost millions of dollars, and the start-ups trying to build them don't have the same capital as a major utility. A hiccup in the regulations or electricity demand could become a terminal setback for a start-up. PG&E could ride out such storms.

--He's not wild about a California ballot initiative to get 50 percent of the state's power from renewable sources. "There may be a time when 50 percent seems reasonable, but right now it seems too far out of reach," he said. Nonetheless, it could be possible to raise it from the current 20 percent level to 33 percent in the future. It depends on the state of renewables and the transmission grid.

--Nuclear power will likely make a comeback in the U.S., but the resurgence mostly might occur in the Southeast and other regions where renewables don't work as well. Besides, resistance among segments of California's population could make it difficult to build more nuclear plants there.

"Demand for power is so great in the U.S. that nuclear should play a role," he said.

--Plug-in hybrids could help promote wind power. A lot of wind power gets generated at night, but since few are awake to use it, it goes to waste. With plug-ins, that power could be used to recharge batteries. The utility is also working with Google and others on technology that would identify cars on the grid. With this, drivers could plug in their cars at work, and then sell power stored on their batteries back to the utility for peak prices. You'd buy at night when power is cheap and sell it in the day when it's expensive.

--He likes the idea of wave power, but building something that can survive the ocean won't be easy, "How do these technologies hold up in the Pacific when things get really nasty?" he posed. "What is clear is that you have constant motion in the ocean."

Correction: This story was corrected to reflect the day the briefing was held. It was Tuesday, April 30.