Don’t allow PG&E woes to threaten state climate goals
Gavin Newsom’s demand that PG&E put safety before profits must not undermine California’s green energy goals.
The financial impacts of the utility’s bankruptcy threatens the state’s ambitious climate policy. No matter what becomes of PG&E, it’s imperative that the governor treat progress on safety and green energy efforts as co-equals.
Unfortunately, to make it all work, he will probably need to tap the state budget to supplement inevitable utility rate hikes.
Newsom took a big step last week on the safety front when he warned that PG&E would not get state wildfire bailout money without strengthening its protections against conflagrations.
PG&E is desperate to access the $21 billion fund created by the Legislature to alleviate wildfire costs. The beauty of the law, AB 1054, is that it requires PG&E to meet four separate safety standards to be eligible for the funds.
The governor said last week that PG&E’s $13.5 billion settlement agreement with victims of California’s deadly 2017 and 2018 wildfires doesn’t meet AB 1054’s requirements. Newsom said the utility’s plan relies so heavily on new debt that it won’t allow it to invest in wildfire safety goals. He’s right.
The governor further used the leverage of AB 1054 to demand that PG&E appoint a new state-approved board of directors focused on safety before profits, and give him the right to seize control of the utility if it doesn’t follow through on its safety promises.
But the governor does not have the same type of leverage to force PG&E to continue its clean energy efforts. And every ratepayer dollar that PG&E spends on dealing with the risk of wildfires is a dollar less to spend on reducing greenhouse gas emissions.
The reality is that the current ratepayer-funded approach is no longer adequate.
Whether PG&E continues to exist or whether it is transformed into a customer-owned co-op, as San Jose Mayor Sam Liccardo suggests, it’s time for the governor to ask the Legislature to start using state funds to help pay for California’s clean energy policies. Utility rate hikes won’t be enough.
Substantial rate increases are already in ratepayers’ future. PG&E received tentative approval Friday to increase electricity customers’ bills $4.90 a month, up 4% from the current monthly average of $121.12. And that’s just for starters.
We can’t boundlessly raise rates. The average electricity price in California is already 16.7 cents per kilowatt hour, one of the highest in the nation. The reality is that if California raises its rates to 20 or 30 cents per kilowatt hour, it would be devastating for the state’s clean energy program. The benefits of many clean-energy alternatives would be undermined by the costs. Even the effort to shift to electric vehicles wouldn’t pencil out.
Californians are united in their support of clean energy programs. Polls show that 80% of residents support the state’s effort to draw more energy from renewable sources and reduce greenhouse gas emissions.
The governor should incorporate the idea of providing subsidies for clean energy programs in the state budget, preventing California from having to choose between reducing use of fossil fuels and wildfire safety.