Guest Editorial: State’s Utility Mandate Is a Solution in Search of a Problem
By Steve Worthley
Californians for Balanced Energy Solutions
As the state of California hurtles toward adopting a building decarbonization policy that mandates electricity as the sole source of power, it is increasingly important that we pay attention to this issue and make our voices heard before the state heedlessly makes a decision that will have severe unintended consequences.
I recently attended a California Public Utilities Commission workshop on building decarbonization and found the discussion eye-opening. For starters, much of the research people were citing as proof was either outdated or biased. More distressingly, many decision-makers appear to have already made up their minds.
A 2016 report from the California Air Resources Board, for example, indicated that residential properties had a continuing decline in greenhouse gas (GHG) emissions and were on target to meet the 2020 goals and beyond. Yet that data is dated, and projections are that the emission reductions have likely accelerated in light of the electrical rate increases since then and the explosion in rooftop solar installations.
Then there were those who spoke as though it was established fact that electricity was a cost saver to consumers over gas.
One local home builder spoke in favor of eliminating gas hookups and indicated they were building such homes in the Fresno/ Clovis area. While they said they had success in moving some customers to electrical appliances, they also admitted that there was general reluctance to give up gas stove tops (thus there still is the need to include gas hookups to their construction). They also said that there was an approximate $5,000 upfront cost over and above traditional gas appliances in the construction costs. Here again, the economics of gas vs. electricity rates would be significant.
A publication from Choose Energy ranking residential rates by states indicated that California’s average in January 2019 was 18.32 cents per kilowatt hour (KwH). Yet my PG&E bill has a baseline rate of $0.21775-$0.27402, 101%-400% of baseline, and $0.48009 over 400% baseline. When compared to neighboring states, our rates in California are outrageous: Oregon, $0.1061; Nevada, $0.1179; and Arizona, $0.1222.
I learned that 60% of Central Valley residents qualify for discounted rates but only about 20% of them are actually taking advantage of those rates. This has enormous implications: Many people are paying the full freight of these high rates; likely they live in older and dilapidated homes that require more energy to achieve comfort levels and because of costs are mitigating their high energy costs by going without air conditioning; and if by some chance all 60% did take advantage of the reductions, what would the economic impact be to the entire rate structure, i.e. fewer people paying the actual costs would drive up rates for the reduced number of rate payers subsidizing the others.
The 2016 CARB report still shows that natural gas is the largest means of electrical generation in California as of 2016. The other non-GHG-emitter power generators include hydro projects (which are dependent upon rainfall/snow melt) and nuclear power with the last remaining nuclear generator scheduled for decommissioning in the near future. Why take away the options of individuals to utilize gas if we are still going to be dependent upon gas to generate electricity? Also, as the state shifts away from carbon fuels, the demand for electricity will grow dramatically. How will all that electricity be generated?
Most of the Central Valley is limited to monopolies of electrical providers. Without competition, we are at the mercy of the PUC rate setters and they have proven to be not protective of us. Simply compare what we pay for power versus our neighboring states.
Bottom line, the proposed policy changes of eliminating gas hookups is a solution in search of a problem. In the end, the workshop reinforced to me why it is so important that we continue to engage on this matter and try to influence policy-makers before they rush into a hasty decision that we as a state will come to regret.
California needs an energy portfolio that draws on a variety of sources. Doing so not just lessens the economic impact on Californians but supports climate policies that reduce emissions and allow consumers to make their own energy choices.
– Steve Worthley, the former chairman of the Tulare County Board of Supervisors, is a board member of Californians for Balanced Energy Solutions.