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Drowning the middle class and poor in sea of red via California’s green policies
Dennis Wyatt RGB
Dennis Wyatt

Texans are not the only Americans that need protection from their public utility commission and state legislators.

While Californians aren’t getting slammed with power bills increasing 10-fold and beyond overnight, they are still getting financially bled to death – granted slowly – by energy policies.

We might be thankful for not being at the mercy of unregulated wholesale and retail power markets but we are at the mercy of regulations gone wild in the name of being green.

This is not to damn green energy but rather to damn the manipulations made to the market that have made it increasingly tough on the shrinking California middle class and the expanding segment of the state classified as low income and/or the working poor.

Most media and certainly almost all politicians in California conveniently ignored a recently released report from the Energy Institute at the University of California Berkeley Haas School of Business and the non-profit Next 10 think tank.

Next 10 is a non-profit, non-partisan organization that explores economic, quality of life and environmental issues. There are based in San Francisco across the bay from Cal Berkeley. Neither the think tank nor university researchers can ever be accused of being hacks for those right leaning entities that skewer green initiatives or dismiss climate change.

That is important to remember given their latest research essentially shows California energy policies are essentially doing to many Californians – in a relatively slow manner – what Texas virtually did overnight to a number of their residents which is to make large swaths of the population poorer at the expense of what are seen as noble ideas.

In Texas it was the result of fervent blind faith in the premise that unregulated markets will deliver everyone to the promised land of lower power costs. As for California it is the crusade style frenzy advancing green energy initiatives regardless of the cost.

The Next 10 and Berkeley study offers a solid argument that green-righteousness blinders have created myopic vision for policy makers. That has prevented them from seeing the damage they are inflicting on ratepayers. It is why they are ignoring other solutions that would help ease California down the green path without inflicting oversized financial pain on those that can afford it the least.

Thanks to green polices instituted by Sacramento, electricity sold by San Diego Electric & Power is almost 100 percent double the national average, PG&E 80 percent higher and Southern California Consolidated Edison 45 percent higher.

The impact of such burdensome costs are underscored in a recent California Public Utilities Commission report that shows roughly 8 million people are struggling to pay their power bills.

Much of this is the result of regressive price burdens the state’s highly subsidized home solar initiative has created. Besides tax credits, the state has forced utilities to buy excess solar power that is generated when the utilities don’t need it.

This has led California power operators at times to pay Arizona to absorb this state’s excess power production.

Those who get solar tend to have higher incomes.

And large solar users – think expansive tract homes and bigger – are now buying roughly the same amount of power that middle class and low-income customers are.

This is a key concern given set costs such as distribution, subsidizing low-income assistant programs, energy conservation incentives, transmission, wildfire related expenses, and even solar subsidizes are all collapsed into the kilowatt hour paid for electricity.

Solar has reduced the power consumption of wealthier households that consume more power down to roughly the same level of middle class and low-income households. It means the middle class and poor are paying a disproportionate share of stranded or bundled costs. It happens because of solar generation that was subsidized to put in place between tax credits and the forced purchasing by utilities of excess power they generate at guaranteed rates higher than those utilities pay to generate electricity. As such it frees the wealthier from what was their proportionate share of bundled costs because they are creating much of their own electricity made possible by solar subsidies.

It is complicated even more from long-term power contracts PG&E et al entered into to fulfill CPUC mandates that a percentage of their energy portfolio be renewables. What PG&E and others are paying for the renewable energy they had to lock up to satisfy the CPUC demands is now significantly higher than what it can be purchased for on the open market. Also keep in mind the Legislature mandated companies such as PG&E to pay significantly higher rates for solar power from residential installations than the for-profit utility could secure from the open market at a much lower cost    

It is against this backdrop two other major green initiatives are bearing down on the middle and lower income class.

The move to ban new sales of vehicles fueled by fossil fuels starting in 2035 means instead of having roughly 400,000 EVs needing electricity to charge as is the case today within 20 to 25 years California could have 30 million. And in PG&E territory they’d all be charging at a cost 80 percent higher than the national average.

That will add to the burden of the 8 million Californians that are now struggling to pay their power bills.

And now there is a green movement to ban the use of natural gas in all new construction. Keep in mind that now you can heat a house in PG&E territory with natural gas for roughly a third to half a price less than with electricity.

Eventually that means the middle class and ultimately the lower class in California will be forced to power their cars and heat their homes with the nation’s most expensive electricity courtesy of the take-no-prisoners green movement culture.

The Next 10-Cal Berkeley report has several suggestions on how to wean off the regressive pricing system that the green initiatives have created without abandoning green goals.

The most palatable is imposing an income-based fixed charge to cover the bundled costs of power systems that include distribution, transmission, subsidies, and such.

As long as the self-righteous greenies ignore the plight they are creating, the more difficult it will be for rank-and-file Californians to escape being sacrificed on the green movement pyre.

This column is the opinion of Dennis Wyatt, and does not necessarily represent the opinion of The Ceres Courier or 209 Multimedia Corporation.