Posted on 06/26/2021 8:50:18 PM PDT by blam
Two inexorable energy trends are underway in California: soaring electricity prices and ever-worsening reliability – and both trends bode ill for the state’s low- and middle-income consumers.
Last week, the state’s grid operator, the California Independent System Operator, issued a “flex alert” that asked the state’s consumers to reduce their power use “to reduce stress on the grid and avoid power outages.”
CAISO’s warning of impending electricity shortages heralds another blackout-riddled summer at the same time California’s electricity prices are skyrocketing.
In 2020, California’s electricity prices jumped by 7.5%, making it the biggest price increase of any state in the country last year and nearly seven times the increase that was seen in the United States as a whole. According to data from the Energy Information Administration, the all-sector price of electricity in California last year jumped to 18.15 cents per kilowatt-hour, which means that Californians are now paying about 70% more for their electricity than the U.S. average all-sector rate of 10.66 cents per kWh. Even more worrisome: California’s electricity rates are expected to soar over the next decade. (More on that in a moment.)
The surging cost of electricity will increase the energy burden being borne by low- and middle-income Californians. High energy costs have a particularly regressive effect in California, which has the highest poverty rate – and some of the highest electricity prices – in the country. In 2020, California’s all-sector electricity prices were the third-highest in the continental U.S., behind only Rhode Island (18.55 cents per kWh) and Connecticut (19.19 cents per kWh.)
Before going further, let me state the obvious: California policymakers are providing a case study in how not to manage an electric grid. Furthermore, that case study shows what could happen if policymakers at the state and federal levels decide to follow California’s radical decarbonization mandates, which include a requirement for 100% zero-carbon electricity by 2045 and an economy-wide goal of carbon neutrality by 2045.
Even though the state’s tattered electric grid can barely meet existing demand – and more rolling blackouts are almost certain this summer – California continues to pile bad policy on top of bad policy. The state has banned the future sale of cars powered by internal combustion engines which will result in dramatic increases in electricity demand and will require, according to a recent report by the California Energy Commission, the installation of 1.2 million new EV charging stations by 2030. Bans on natural gas will further increase electricity demand. Cheered on by the Sierra Club, which is getting tens of millions of dollars from billionaire Michael Bloomberg, about 46 California communities have banned the use of natural gas in homes and businesses. Making the whole thing even more absurd, is that California is pledging to achieve these goals while closing the state’s last remaining nuclear power plant, the Diablo Canyon Power Plant, which by itself produces nearly 10% of all the juice consumed in California.
The state’s surging energy costs demonstrate the regressive nature of decarbonization policies and how renewable-energy mandates drive up the price of power. California’s electricity prices are “absolutely exploding,” says Mark Nelson, an energy analyst and the managing director of the Radiant Energy Fund, who used that phrase on a recent episode of the Power Hungry Podcast. He added that the electricity price hikes are happening before the state’s utilities have incurred all of the costs of the deadly wildfires that swept the state, trimming millions of trees to prevent future wildfires, and adding all the mandated renewable-energy capacity, transmission lines, and new battery storage that the state will need to meet its climate goals. Further, the costs do not include all of the costs that will be incurred after the proposed shuttering of Diablo Canyon in 2025.
Last week’s power conservation requests are likely the first of many to come. On May 27, CAISO CEO Elliot Mainzer warned that if the state is hit with another hot summer like the one that required rolling blackouts that left more than 800,000 homes and businesses without power over two days last August, “our numbers tell us the grid will be stressed again.” That warning followed a May 12 CAISO press release which warned that “reliability risks remain” and the state will likely need “voluntary” electricity conservation this summer to avoid a repeat of last year’s blackouts.
The specter of more blackouts is yet more bad news for California’s beleaguered consumers. Between 2010 and 2020, the state’s electricity prices jumped by 39.5%, which was, the biggest increase of any state in the U.S. Even more worrisome: California’s electricity rates will soar over the next decade.
In a report issued in February, the California Public Utility Commission warned that the state’s energy costs are growing far faster than the rate of inflation, and that “energy bills will become less affordable over time.”
What’s driving up prices? The report says that “electrification goals and wildlife mitigation plans are among the near-term needs…that place upward pressure on rates and bills.” The report projected that residents living in hotter regions (that is, those who can’t afford to live close to the coast) who get their electricity from San Diego Gas & Electric could see their monthly power bills increase by 47% between now and 2030. When future gasoline-price increases are included, overall energy costs for that same consumer are projected to increase by 60%. Furthermore, the CPUC expects residential ratepayers in SDG&E’s service territory will be paying close to 45 cents per kilowatt-hour by 2030. For reference, that is more than three times the current average price of residential electricity.
Meanwhile, the state’s renewable plans are being thwarted by rural Californians who don’t want wind and solar projects in their neighborhoods. California has added essentially no new wind capacity since 2013. The latest rejection of Big Wind happened on Tuesday when the Shasta County Planning Commission unanimously rejected a permit for Fountain Wind, a project that proposed to put 216 megawatts of wind capacity (and about 71 turbines) in a mountainous area west of the town of Burney. The project met fierce resistance. According to David Benda, a reporter for the Redding Record Searchlight, “The 5-0 vote capped a marathon meeting that went nearly 10 hours and ended just before 11 p.m. The unanimous vote was met with cheers.”
As I have previously reported, the backlash against Big Wind goes far beyond California. It can be seen throughout Europe and from Maine to Hawaii. Since 2015, more than 300 communities in the U.S, have rejected or restricted wind projects.
In addition to the raging land-use conflicts, California policymakers are facing a growing backlash from California’s Latino population, which is the largest in the country. As I reported last year, the state’s Latino leaders have sued the state over its housing, energy, and climate regulations. Jennifer Hernandez, the lead lawyer for The Two Hundred, a coalition of Latino leaders, told me those regulations are “incredibly regressive” and are bringing “Appalachia economics” to California’s “non-coastal elites.”
Robert Apodaca, the founder of United Latinos Vote, a non-profit group, told me recently that the ongoing electricity price hikes in the state “will be crippling for low- and middle- income Californians, particularly for those who live in the Central Valley and the Inland Empire. They are going to really feel the heat, in more ways than one.”
The punchline here is clear: the blackouts and high electricity prices that are plaguing California provide a neon-lit warning sign about the electric reliability and energy affordability crises that loom if policymakers attempt to decarbonize our economy too quickly.
“issued a “flex alert” that asked the state’s consumers to reduce their power use “to reduce stress on the grid and avoid power outages.”
Sure I’ll reduce just as soon as you reduce criminal foreign invaders from entering the state
Sequoyah Nuclear Plant and Raccoon Mountain Pumped Storage
making the problem even worse all the producers are leaving the state just as fast as they can.
Amen. Preach it sister. In season and out of season.
Better get an electric car!!
What percent of California homes have solar power, what percent of CA energy is produced by solar or wind power? How much electricity is required for buildings or electric vehicles now? How much would be required, say in 10 years, if lots of Californians buy electric vehicles? At least part of this could be resolved by sensibly phased increases in solar/wind supply and vehicle needs. Nuclear increase could help, but have we resolved the nuclear waste disposal issue? I am not aware of any improvements in that issue.
I saw a one hour special on this reactor that Gates/Buffet developed. I was impressed...it actually uses waste from all the stockpiles around the country as its fuel. And, it can never melt down, ect. It looks like the way to go, IMO.
Bill Gates, Warren Buffett Building Nuclear Reactor In Coal-Rich Wyoming
Thanks for the link. I will look forward to reading and discussing it when my energy efficiency concerned partner returns home later this week.
Wetbacks
“I think 20% of the LA area’s energy needs is supplied by the Palo Verde reactor in AZ. We should cut that off.”
Considering that California owns 27% of PVNGS that might be hard to do.
“I was impressed...it actually uses waste from all the stockpiles around the country as its fuel.”
No. It uses HALEU. More enriched than the new fuel for most present reactors.
“And, it can never melt down,”
Where did you see that?
Soon, very soon, smart meters will control your electricity, gas and water use…they will control where your thermostat, you will have strict gas and water budgets…try to go over, and you won’t be able to. You won’t be able to set your a/c below 80, your heat above 68. Need to wash clothes one more load…too bad, you have used too much water and electricity this month. It’s coming, rather soon, sort of like the old Twilight Zone lead in.
With all that hot air the liberal exhaust out of their mouths you’d think those windmills in Kali would be nearly blowing over producing electricity.
So. if less than $950 just don’t pay your bill. Theft of electricity is non prosecutable. Stealing $300 worth of electricity is the same as stealing a TV from Walmart
lol. True. Why not do that? Just don’t pay the bill.
Well I work with a former PG&E employee.
He laughed when I bought a ton of their dirt cheap stock a year ago on the bet that it’ll double maybe in 5 years.
Sounds like that might be a pipe dream.
CA is a haven for instability, negligence, and apathy based on what I have been reading lately. Wow!
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