Energy Chair Sounds Alarm Over Skyrocketing Electric Bills

9 Sep 2020

The Assembly Utilities & Energy Committee Chair warned that increases in California utility bills are becoming untenable. Chris Holden (D-Pasadena) pointed to the private utilities’ tab to reduce climate-aggravated wildfires, which gets passed on to customers.

“Rates are really getting out of control,” Holden said during a Sept. 9 Power Association of Northern California meeting, held remotely. Over the next three years, Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric customers will see $15 billion added to their rates. “There will be a disproportionate impact on ratepayers.”

Addressing another controversial topic, Holden said his Assembly energy committee will hold a hearing very soon on the underlying causes of the mid-August blackouts.

The hearing will take place as soon as the preliminary analysis jointly conducted by the California Public Utilities Commission, grid operator and California Energy Commission is released. That is expected next week or the following week.

“We should not have had blackouts Aug. 14 and 15,” he said. The three energy agencies fell short on planning, accountability, and coordination, and then one threw another under the bus. Holden was referring to California Independent System Operator head Steve Berberich, who initially blamed the CPUC for the grid being short of generation. Berberich said the Commission failed to set a sufficiently high resource adequacy requirement.

Holden said he is often asked how he can sleep at night given the trying energy matters. He replied that he slept like a baby. “I wake every two hours crying,” he quipped.

That is in no small part because of the use of public safety power shutoffs. He called PSPS “a dreaded household term.” The committee chair expects them to be used for the foreseeable future, albeit less each season.

Preemptive shutoffs are now initiated under threatening fire conditions in order to avoid utility equipment sparking fires. Monday night PG&E shut off power to almost 170,000 customers after high, dry winds were forecast. It began restoring power Wednesday morning. The latest safety shutoff was not nearly as extensive as last October’s that left 2 million without power for many days. The other two utilities also warned thousands of their customers of possible shutoffs the first half of this week.

Fire reduction plans jack up utility bills

Every $1 billion of PG&E’s fire mitigation cost will increase bills 7-8% a year or add an average $90 a year. Spending $5 billion, for example, will add an average $450 a year. SCE ratepayers’ annual increase is an average $70 for each additional $1 billion. SDG&E customers will see an additional $24. San Diego’s fire reduction tab is currently much lower because of its investments in reducing the fire risks of its equipment after devastating fires in its territory in 2007. The CPUC warned months ago that SDG&E bill increases exceeded the annual inflation rate. And it was only going to get worse.

In addition, the pandemic has caused a 10-20% shortfall in utility revenue with the drop in commercial demand. Here too the cost will be shifted to ratepayers. Holden said that new legislation, AB 913, will mitigate that somewhat, because it allows the utilities to spread out the cost over time via borrowing, backed by ratepayer income, i.e. securitization, to reduce the hit to utility customers.

Elizabeth McCarthy

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