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.
“WHO OR WHAT SCREWED CALIFORNIA???”
Californians.
Next question.
L
Stealing elections was perfected in California before they went national.
Meanwhile, the state’s renewable plans are being thwarted by rural Californians who don’t want wind and solar projects in their neighborhoods... 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.”
Yes, that's what they are designed to do.
Great point!
.
Blue Locusts,
LOL!
“Back in the Olden Days,,,”
.
Thanks lurker.
I was born in California. I’m glad my family moved away when I was one year old. Now how can we can get Jim Robinson (and the FR server) out of there?
California's economy has reached the peak of the cycle, and is now heading down. At the bottom of the cycle, old money will buy up all the prime land then kick the socialists out, followed by incredible profits, starting the cycle over. Old money loves long term cycles, not economic stability.
Californians have been screwed for years by graduates of a quasi-Marxist university system. It is the educated sophisticates who look down on the working class that have caused so many of California’s proglems. And many have migrated to Oregon, Washington, Nevada, and now Texas.
I disagree. Born and raised in SF. Used to be a Republican city. In the 1960's a bunch of liberals flooded in from eastern states. Most of the liberals I've met are from out of state. Nancy Pelosi, from Baltimore. Willie Brown, from Texas. Etc. They came from elsewhere, and drove out conservatives, as well as the military. SF Bay Area was a military hive of activity, full of military bases, now closed down and converted to liberal causes. All because of outsiders who flooded in over the last 50 years. I wish they would leave.
We were honored to give you Willie Brown. Will you take that Beto cretin and Sheila Jackson Lee now?
The problem in California is that there's no political will or benefit to making rational policies. They've shut down all their coal and nuclear plants and they haven't added any hydroelectric capacity in 40 years.
Sadly, blackouts, sky high prices and mealy mouthed bromides about "clean energy" is the most acceptable alternative in California.
Republicans need to move out of California... it’s just gonna get worse.
It’s all part of ‘The Plan ©️’! Just like True-dope killing all the pipelines in Canada, all part of the ‘The Great Reset ©️’, courtesy of the World Economic Forum! ‘You will own nothing, and be happy’, they tell us. (Meanwhile, THEY will own EVERYTHING, and cut off EVERYTHING from those who grouse at them.)
I’d rather die on my feet than exist on my knees!
Mexifornia. Its a colony of Mexico now.
Try move to Utah
Cost of LLC is $30 and $20 a year....CA $800 and $800 a year
Lower cost of electricity
Lower tax rate...no taxes on Social Security before the legislature...passed lower house already
Income tax 5%
Property taxes lower than in CA
Much better medical system
Salt Lake City University Hospital as over a thousand doctors.
Heck no! Even though I disliked Willie Brown, I did have some respect for him. Absolutely disgusted about Sheila Jackson Lee, yuck! As an IT manager, I did have some interaction in Mayor Willie Brown's office in City Hall, and in other departments. Really strong imposing personality, and he got things done. Not that I agreed with what he did. He could stare me down in elevators with a cold gaze. He did clean up parts of City Hall, although he handed out plum jobs to his buddies who didn't know what they were doing. One was making more money than me, but could only get me coffee and answer my phone, without a clue about work - he went to prison for fraud. Anyway, most of the liberals came from outside (except Feinstein, she is one of the few from here).
The politicians here in CA are absolutely insane. It’s a one-party control state so they can do anything then want. They are now bent on essentially getting rid of residential zoning and having all zoning decisions done in Sacramento. They are on the verge of passing a bill to allow single-family houses to be demolished and two single family homes to replace the demolished house on the lot PLUS two Auxiliary Dwelling Units. That would be FOUR homes on a quarter-acre lot. All because nice, single family homes in pleasant neighborhoods are racist.
The energy policies are beyond stupid as we discussed.
Shaddap and buy a Tesla.
the coming variable rates will kill people...
it’d be better to shut off power to some ares than jack the price in peak hours
people might die, and it might be inconvenient, but think of thousands getting power bills in the $thousands every month, that you will never be able to pay and will lose your power for nonpayment
RE: In the 1960’s a bunch of liberals flooded in from eastern states. Most of the liberals I’ve met are from out of state.
AHHH...I remember an iconic song in the 1960’s with these words:
IF YOU’RE GOING TO SAN FRANCISCO, BE SURE TO PUT SOME FLOWERS 💐💐 IN YOUR HAIR.
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