In the coming months, the California Public Utilities Commission (CPUC) will be making critical decisions that will have a big impact on how much electricity our state consumes and where that energy comes from. Your energy bill and the environment hang in the balance.
California has been a leader in developing policies to prevent and combat catastrophic climate change. However, turning vision, executive orders, and legislation into action requires effective implementation. The CPUC is the regulatory body responsible for making decisions about the way many of California’s energy policies are implemented. The decisions currently on their plate include how residential electricity rates should be structured, how power generated by local rooftop-solar installations should be paid for, and whether California utilities should contract for new fossil-fuel-based electricity generating capacity.
Because of their intense financial interest to the utilities, CPUC proceedings are well attended by utility lawyers and technical staff. Unfortunately, what’s in the best immediate financial interest of the utilities is often counter to the best interest of the public and the environment. And because the issues are technical and complex, the public is not as engaged or present as one might hope. Yet we, the ratepayers, pay the price when energy policy threatens California’s environment, degrading our air, our water, our ecosystems, and our climate.
With critical decisions pending, this year is a key time for public engagement and volunteer action. The CPUC is under intense scrutiny due to allegations of inappropriate, potentially illegal communications between the investor-owned utilities and former CPUC president Michael Peevey. Commissioner Michael Picker’s confirmation to the CPUC presidency is now pending; a confirmation hearing will be held in August. It is therefore a particularly important time to insist that the CPUC protect the public interest.
Members should be aware of the importance of the following issues, and can comment as concerned individual citizens and ratepayers.
San Diego’s chance to “go clean”
The CPUC is charged with overseeing utility plans for assuring adequate and reliable generating capacity to meet California’s needs. To meet power demands, the CPUC is required to first draw on “preferred resources”: energy efficiency, renewable resources, and programs that encourage smart, informed consumption to curb power use during peak periods (an approach known as “demand response”). The CPUC’s commitment to “preferred resources” is currently being tested as it considers how to replace the now-defunct San Onofre Nuclear Generating Station in San Diego County.
The local utility, San Diego Gas and Electric (SDG&E), has proposed purchasing partial replacement power from a $2-billion, 600-megawat (MW) gas-generating plant to be built in Carlsbad, California. The Carlsbad plant would represent a substantial cost to the ratepayers and would mean increased greenhouse-gas emissions over the 20-to-40-year life of the plant.
In March, an Administrative Law Judge issued a Proposed Decision denying SDG&E’s application to purchase power from the Carlsbad plant. In response, President Picker filed an Alternative Proposed Decision authorizing 500 MW of new gas-generating capacity. The Sierra Club has filed extensive technical comments making it clear that new gas-generating capacity is not needed, as the Request for Offers to replace the nuclear plant produced, in the words of the Administrative Law Judge, “a robust number of offers for preferred resources and energy storage.”
This is an opportunity for the CPUC to define whether they are regulating for California’s clean-energy future, or protecting fossil-fuel interests by authorizing new and unneeded dirty power. The CPUC will consider SDG&E’s application to purchase the gas-generated power at its May 21st meeting.
Rate restructuring to incentivize or punish conservation?
The CPUC is also working to implement California Assembly Bill 327, complex legislation that requires a reconsideration of California’s residential electricity rates. A proposal supported by the utilities would levy fixed charges of approximately $120 per year on ratepayers, irrespective of how much electricity they use or whether they have rooftop solar. The utility-sponsored model would also “flatten” the rate structure, effectively raising the rates for those using little electricity and lowering them for those using lots.
If the CPUC adopts this rate model, it would reduce economic incentives to conserve electricity, make energy-efficiency upgrades, or install solar panels. Economic models suggest that fixed charges and flattened rates will in fact lead to an increase in electricity usage. Fixed charges are an unfair burden on those who use little electricity, and may harm low-income ratepayers.
Later in 2015, the CPUC will consider proposals for how owners of residential rooftop-solar installations should be compensated for the power they feed back into the electrical grid. This is another contentious topic, with the utilities pushing to discontinue the current Net Energy Metering program.
As these issues come to a head in the next months, we will need your support! Go to sierraclub.org/sfbay/email and sign up for the “General” list and your local list to make sure you receive updates.
— Claire Broome