California is a First World province that depends on a Third World electric grid.
Blackouts are so common that thousands of Californians have bought small generators to assure reliable power. Electricity prices, which are already among the highest in the country, are soaring. Despite the decrepitude of California’s electric grid, on December 1, San Jose became the largest city in America to ban the use of gas. Some 40 communities in California have now passed bans or restrictions on the use of natural gas, which will, of course, force residents to buy even more of the state’s high-priced juice.
Add in the looming closure of the 2,256-megawatt Diablo Canyon nuclear plant, the state’s goal to “achieve carbon neutrality” no later than 2045, bans on internal combustion engines, and the enormous amount of electricity that will be needed to fuel several million new EVs, and it’s clear that California’s energy crisis – in both reliability and affordability, a crisis that has been recurring since the days of Enron – will continue for years to come.
Indeed, a battle over energy policy is raging in California and it portends an even broader fight if other states, or the federal government, attempt to implement similar bans on natural gas. The bans have ignited a backlash from some of California’s most prominent Black and Latino leaders, who are saying that the prohibitions on the use of the fuel are a form of regressive tax on low- and middle-income residents. Assemblyman Jim Cooper, a Democrat from Elk Grove, has become one of the harshest critics of California’s climate policies and the environmental groups that are pushing them.
On today’s episode of the Power Hungry Podcast, Cooper, who was recently sworn in for his fourth term in the California Assembly, told me that the environmental groups that are pushing the bans on natural gas are showing “deliberate indifference” to the needs of California’s low- and middle-income consumers. “It’s outrageous,” he said.
Cooper and other Black and Latino leaders are also objecting to a recent move by the California Public Advocates Office to join forces with the Sierra Club. The agency, known as CalPA, is charged with looking out for the state’s beleaguered energy consumers. Last year, CalPA signed — but did not publicly disclose — a “common interest agreement” with the Sierra Club to investigate “tactics by Southern California Gas Company to perpetuate reliance on gas in buildings” and whether the utility tried to undermine new efficiency codes. CalPA now wants state regulators to levy a $255 million fine against SoCalGas, the largest residential supplier of natural gas in the United States.
What did SoCalGas do to deserve such a fine? In a phone interview, Mike Campbell, a program manager at CalPA told me that SoCalGas was engaged “in various lobbying campaigns and they charged those lobbying costs to ratepayers” rather than to shareholders.
Timothy Alan Simon, the chairman of the California Black Chamber of Commerce, and a former member of the California Public Utility Commission, told me by phone that CalPA’s “mission is very clear: keep costs low.“ Gas, he said, is a cheaper energy source than electricity. Despite that fact, he said, “CalPA has joined an environmental group that doesn’t give a rat’s ass about the consumer.”
In a December 3 letter to the California Public Utility Commission, Simon said the deal between CalPA and the Sierra Club “is not only irresponsible but violates the very notion of the utility regulatory framework.” He also said “The Sierra Club does not bear the CPUC’s burden of safe and cost-efficient energy on demand, better known as default obligation of delivery. Yet, they partner with the independent government entity entrusted to protect ratepayers with no historical concern of energy cost.”
Last year, Berkeley became the first city in the United States to pass a ban on natural gas hookups in new buildings. On December 2, the city of Oakland banned the installation of gas stoves and heaters in new buildings. (On December 3, Seattle Mayor Jenny Durkan announced a new city code that will ban the use of “fossil fuels in new commercial and large multi-family construction for space and most water heating.”)
The bans on natural gas are occurring at the same time that California’s electricity prices are skyrocketing. On December 3, the California Public Utility Commission approved an 8.1% electricity rate increase for Pacific Gas & Electric
It must be noted that San Jose and Oakland are both served by PG&E.
About 86 percent of all the homes in California use natural gas. Banning the direct use of the fuel for cooking, home heating, water heaters, and clothes dryers, will force consumers to instead use more electricity which, on an energy-equivalent basis, costs four times as much as natural gas. That’s an unconscionable energy tax in California, which has the highest poverty rate of any state in America.
When accounting for the cost of living, 18.1% of the state’s residents are living in poverty. For perspective, that means that roughly 7 million Californians — a population about the size of Arizona’s — are living in poverty. Californians also pay some of America’s highest energy prices. Last year, the average cost of residential electricity in California was 19.2 cents per kilowatt-hour, which is 47% higher than the national average of about 13 cents per kilowatt-hour.
On November 30, Cooper and Assemblywoman Blanca Rubio, a Democrat from the Los Angeles area, sent a letter to the Public Utility Commission which said “the growing ‘ban natural gas’ chorus from organizations such as the Sierra Club, the Environmental Defense Fund (EDF) and Union of Concerned Scientists to name a few, has become more aggressive, and there has never been a mention by them about what the cost impacts would be on customers who are struggling with utility costs, and household expenses.” They continued, “More importantly, it appears their belief is cost increases should not be a determining factor with regard to approval of new energy policies because the need to address climate change trumps all concerns that might arise.”
In response to the criticism from Cooper and Rubio, the Sierra Club issued a letter which said that “the concerns expressed in your letter regarding the cost of utility bills are exactly those furthered by Sierra Club’s advocacy to assure SoCalGas does not improperly impose expenses on ratepayers.” But on its website, the Sierra Club says it wants a “gas-free future for our homes and buildings.”
Achieving a gas-free future requires ignoring the cost impacts on the poor and middle class. Last month, a report by researchers at the UCLA Institute of the Environment and Sustainability found that “whole house electrification programs are likely to exacerbate daily peak electricity loads and increase total household expenditures on energy.” (Emphasis added.) It continued, saying “Moreover, the state’s continued reliance on natural gas peaker-plants means that these efforts will likely only produce modest GHG emissions abatement benefits.”
The report also concluded that “Low-income residents of disadvantaged communities, who have the least flexible work schedules, the least access to high-efficiency appliances and energy management systems, and inhabit the most poorly insulated housing stock, will be most adversely affected by these changes.”
Last week, during a phone interview, Jennifer Hernandez, an attorney for The Two Hundred, a coalition of Latino civil-rights leaders who have sued the state of California over its energy and housing policies, told me the bans on natural gas make no sense. “We don’t have enough electricity on the grid now. And they want to ban natural gas?” She continued, saying that the only way California can reach its climate goals “is to quit consuming energy.”
It’s too early to tell how the natural gas bans in California will play out. The California Restaurant Association has filed a lawsuit to stop the bans. SoCalGas has also sued. But if President-elect Joe Biden wants to implement his aggressive climate plan, he need look no further than the Golden State to see how the politics of climate change are colliding with the reality of energy affordability and the growing concerns of Black and Latino leaders about the cost impacts of climate measures on their communities.