Elias: Beware yet another customer-paid utility bailout by state Legislature
The utilities’ planned new pricing is designed first of all to help them. Any good it might accomplish for anyone else would be incidental.
Anytime California’s three biggest privately-owned electric companies tell you they want to change their pricing structure just for your good, hold onto your wallet.
These companies — Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric – did exponentially more physical damage to this state and its people over the last decade than any other industry and never paid much for their misdeeds.
One – PG&E – has been convicted of involuntary manslaughter and criminal negligence for its role in both wildfires and a huge natural gas pipeline explosion, without a single employee ever serving so much as a day in prison for causing the loss of well over 200 lives and many hundreds of homes and other businesses.
Instead of penalizing these companies heavily, the utilities’ friends in the state Legislature and other offices from the governor on down keep bailing them out.
When bankruptcy threatened PG&E after its admitted roles in the massive 2018 Camp Fire that destroyed the town of Paradise in Butte County, Gov. Gavin Newsom and legislators created the ongoing state Wildfire Fund guaranteeing aid to the companies after future fires they might cause. Customers of all three big utilities still pay monthly to fund this $13 billion insurance policy.
When PG&E worried about possible losses in shutting down the Diablo Canyon nuclear power plant as scheduled in 2025, Newsom and the Legislature set up a state-funded extension of at least five years. The rationale for this took the form of “blackout blackmail,” threats of power outages if Diablo went off line. But plenty of “peaker” power plants exist around the state, firing up in times of very high electric demand and making blackout threats questionable.
Now the utilities are at it again, using a law passed quietly last year that supposedly requires them to restructure power rates so the rich pay more than the poor for electricity, regardless of how much juice they use.
Under this plan, households with income under $28,000 would pay a fixed $15 per month to fund power infrastructure like transmission lines, with usage charges added to it. The fixed charge for households earning $28,000 to $69,000 would be $20 to $34, those making $69,000 to $180,000 would pay $51 and households with more than $180,000 income would pay $92 per month, plus usage fees.
One problem with this: average net bills for everyone would most likely rise, starting in mid-2025. The first phase of public comments on this system are due for submission to the state Public Utilities Commission (PUC) by Friday.
This masquerades as help for low income families, but it is really just another long-term insurance policy for the utilities.
Community Choice Aggregations (CCAs) are taking hold all over California today, from Sonoma to San Diego, Placer County to Pico Rivera. These agencies buy power wherever they can get it, offering options including all-renewable energy to those who want to pay a bit more than if they bought the same mix offered by the utilities. They use the utilities’ power lines to bring that energy to customers.
But what if large-scale CCAs like Northern California’s MCE Community Choice Energy and Southern California’s Clean Power Alliance decide to build transmission facilities of their own?
The utilities could be looking at multi-billion dollar transmission line white elephants they built with consumer money acquired through monthly bills. To eliminate that risk, the big companies need guaranteed funds to maintain and expand their lines, thus discouraging the CCAs from undermining them by getting their own facilities.
That’s what the new pricing system seems to be all about, although no utility company would ever admit it, and the PUC can be counted on to cooperate, as it almost always accommodates the utilities it regulates. If the new system also discourages rooftop solar installations by forcing solar owners to pay monthly electric bills, that’s fine with the utilities.
That’s why their lobbyists worked to get the Legislature and Newsom to “require” them to make the currently planned change.
So as usual with the utilities, it is caveat emptor, let the buyer beware. The utilities’ planned new pricing is designed first of all to help them. Any good it might accomplish for anyone else would be incidental.
Thomas Elias can be reached at tdelias@aol.com. To read more of his columns, visit californiafocus.net online.