Dan Walters

Dan Walters: Electrical power tripping

Another round of big changes that will affect Californians’ utility budgets is underway.
Another round of big changes that will affect Californians’ utility budgets is underway. Los Angeles Times file

When California’s electric power system went into a virtual meltdown 15 years ago, one might think it would have cured politicians’ urges to fiddle with its operations.

After all, it was caused by a know-it-all overhaul of the system four years earlier by then-Gov. Pete Wilson and the Legislature, and successor Gray Davis’ mishandling of the crisis contributed mightily to his recall three years later.

Nevertheless, Davis’ successor, Arnold Schwarzenegger, and legislators began fiddling with the system again in 2006, dictating that it begin shifting to “renewable” power sources – regardless of the effect on ratepayers – in the name of curbing greenhouse gas emissions.

Since then, politicians and the power grid’s major stakeholders have tinkered constantly with its extremely complex technical and financial details, each seeking some advantage.

Meanwhile, the Public Utilities Commission, the Energy Commission, the Air Resources Board and the Independent System Operator joust for pieces of the regulatory pie.

Whatever emerges is ultimately folded into the $35 billion in power bills consumers pay each year, based on rates that are among the nation’s highest.

According to the federal Energy Information Administration, Californians are paying an average of 13.5 cents per kilowatt-hour, 37 percent higher than the national average and eighth highest of any state.

Another round of big changes that will affect Californians’ utility budgets is underway.

Two years ago, in the dying moments of the 2013 legislative session, lawmakers passed Assembly Bill 327, a basket of new utility decrees.

Earlier this year, in response to one, the Public Utilities Commission flattened the multiple tiers of electric power rates, giving a break to larger residential users and raising power costs for smaller users.

That was what the bill’s author, Fresno Assemblyman Henry Perea, intended. He said residents of inland areas, such as his constituents, were being unfairly penalized for using large amounts of power for air conditioning.

Another section of AB 327 will hit soon.

A proposal pending before the PUC would make rooftop solar power less financially attractive by cutting in half what utilities must pay solar panels’ owners for pumping excess juice into the power grid and also making them pay maintenance fees.

Solar power companies say it’s a move by utilities to choke off competition; the utilities say it levels the playing field.

Conceptually, it’s similar to proposals in the Legislature to make drivers of electric and hybrid vehicles, who pay little or no gas taxes, contribute something for highway upkeep.

As the policies of AB 327 take effect, another bill sitting on Gov. Jerry Brown’s desk would require utilities to expand their use of “renewables” such as wind, solar and geothermal to 50 percent by 2030.

The effect on consumers is unknown, but likely will mean even higher power bills. The utilities endorsed the measure, but they are guaranteed to recover their higher costs from their customers.

Senate Bill 350 has another interesting, if obscure, provision that certainly will raise costs. It decrees that new transmission-line construction will be considered public works, meaning contractors would have to pay “prevailing wages” to workers – a big wet kiss for construction unions.