If you received your utility bills recently, you may need smelling salts to bring you back to consciousness. Out of curiosity, I posed the question on Twitter. I asked how much of an increase people saw in their gas and electricity bills. The responses were shocking.
Many said their bills doubled or tripled, and that was without any changes in their usage, and even included those who have solar.
So what is going on?
Natural gas is the energy source most used to heat the water for your shower, washing machine and for cooking your meals. It is also used to generate electricity so you can have light when viewing your most recent utility bill.
Despite the fact that most Californians rely on it every day, including 70% of us who use it for cooking, California doesn’t actually produce very much of its own. Most of our natural gas in California, 90% of it, comes from out of state.
Then consider that Californians pay 67.1% more for electricity and 30.1% more for natural gas than the national average.
Why might this be?
This is largely due to a variety of state imposed taxes and climate change mandates that drive up costs and constrain supply.
There has been much talk from politicians in Sacramento of late bemoaning the “greedy utility companies” and their high prices. Gov. Gavin Newsom has cried foul and written a letter to the Federal Energy Regulatory Commission (FERC) demanding they investigate “whether market manipulation, anticompetitive behavior, or other anomalous activities are driving these ongoing elevated prices in western gas markets.” He went further to demand “that FERC bring its full enforcement powers and resources to bear to protect customers.”
It is hard to imagine a more disingenuous statement considering politicians are the ones who set the utility rates. The state Legislature approves the governor’s appointments to the California Public Utilities Commission (CPUC), the very body that approves increases in customer rates.
It is true that the supply of natural gas has been acutely constrained in recent months given the cold weather across the country. And it is true there are always issues of costly aging pipeline maintenance.
However, we cannot ignore the fact that California has been its own worst enemy when it comes to providing affordable and reliable energy to its citizens.
Aliso Canyon is the largest natural gas storage facility California, owned and operated by the Southern California Gas Company SoCalGas. In 2015 it saw the country’s largest ever methane leak, causing the CPUC to reduce its storage capacity of 86 billion cubic feet (Bcf) to 34 Bcf.
In 2017, the CPUC determined the facility was safe to operate, and while there have been a few increases to its storage since 2015, it still operates at roughly half capacity. Reduced in-state production makes California even more dependent on out-of-state sources.
Our ability to provide affordable electricity is even more troubling.
California households pay the second-highest price for electricity in the country, next to only Hawaii. Under state mandates, more of our energy will have to come from costly renewable sources like solar and wind in the future given the passage of Senate Bill 100 in 2018, which requires that “zero-carbon resources supply 100% of retail sales of electricity.” California would have to build miles of wind and solar farms to accommodate the energy needs of the most populous state in the country. Who do you think will ultimately be paying for that? You, of course.
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Roughly 10% of our electricity has been supplied by nuclear power, specifically the Diablo Canyon Nuclear Plant and the Palo Verde plant across the border in Arizona. In a rush to harness all things “green energy,” politicians, including then-Lt. Gov. Newsom, led the charge to close Diablo Canyon. Fast forward to 2022 and rolling blackouts, Newsom did an about face and requested that FERC allow the plant to continue operating. But on Jan. 24 of this year, the U.S. Nuclear Regulatory Commission said it will not resume its review of the Diablo Canyon license renewal application.
Californians need reliable and affordable energy sources. Alternative energy should be part of the portfolio, but not the sole source given its high cost to implement and the fact that we don’t have an economical way to store alternative energy. The Legislature must reconsider some of its mandates like shutting down natural gas power plants and requiring utilities to supply 60% of retail electricity from renewables by 2030 and 100% by 2045, as well as the ban on the sale of gas-powered cars.
Lack of reliable and affordable energy costs Californians billions in higher electricity costs and lost business due to rolling blackouts. Simply put, we can no longer afford the high cost of the Legislature’s unattainable environmental goals.
Melissa Melendez is a former California state senator. She is now president of the Golden State Policy Council.