Tags: Health Topics | pge | newsom | bankruptcy

Less Electricity Will Cost Californians More

california fires power outages and evacuations

A helicopter arrives at Sutter Santa Rosa Regional Hospital to evacuate patients in Santa Rosa, Calif., on Saturday, Oct. 26, 2019. A Northern California blaze forced evacuation orders and warnings. Officials started cutting electricity for millions of people in an effort to prevent more fires. (Ethan Swope/AP)

By Tuesday, 26 November 2019 03:36 PM Current | Bio | Archive

The costs of global warming continue to mount up.

Californians pay nearly the highest electricity prices in the continental United States, about twice as much per kilowatt-hour (kwh) as in nearby Oregon and Washington.

Nevertheless, California's prices are probably not high enough.

Some of the fires plaguing the drought-stricken state were caused by electrical lines downed by falling trees and by malfunctioning transformers. These fires have caused billions of dollars of damage to homes and other property.

The resulting lawsuits have bankrupted Pacific Gas and Electric (PGE).

As protection from additional lawsuits, PGE has been turning off electricity to millions of Californians, sometimes for several days. But shutoffs produce damages which probably cannot be reimbursed by the bankrupt company.

Stores and restaurants unable to refrigerate food have lost thousands and perhaps millions of dollars in spoiled food and lost business. Private families have lost refrigeration. The health of diabetics has been threatened since insulin must be refrigerated.

The whole mess illustrates how dependent we are on reliable electricity.

Some critical facilities have emergency generators. But generators are too expensive for many businesses and families, and might themselves cause fires if incorrectly sited or operated.

Even homes with solar panels may still be in trouble during shutoffs. For technical reasons, most grid-connected systems won't deliver any power if the utility to which they are connected goes down.

Some, though, may benefit from an option permitting homeowners to draw up to two kilowatts — enough to run refrigerators, freezers, and a few lights — from their solar panels during PGE shutdowns.

Californians with electric cars may have another backup: a small converter can power selected home appliances from their EV's large batteries.

California Gov. Gavin Newsom threatens to take over PGE or turn it into a cooperative owned by its customers. But these measures wouldn't address the real problem: how to guarantee reliable electrical service without substantially increasing the already high price of electricity. State operation or becoming a cooperative would not change the economics of the situation.

Californians are being treated to an epidemic of finger pointing and efforts to find "someone else" to pay for the fire damage and for fixing power lines so they won't cause future fires. There are only a few candidates for this honor: PGE stockholders, California taxpayers, the people who use electricity, or some combination of these.

Even if PGE stock price goes to zero and shareholders lose all their equity in the company, this won't cover the damage already done. Nor will it pay for additional maintenance — replacing things like antiquated power lines and transformers. The California legislature probably won't support tax increases enabling the state government to pay.

PGE can borrow the needed money, but it will have to increase its electricity prices in order to pay interest and redeem the bonds.

Ultimately, California's electricity consumers will have to pay for what it costs to generate and transmit power safely and will do so in their electric bills. Since the current price of electricity in California, high as it already is, is insufficient to pay all of these costs, the price per kilowatt-hour will have to go up, probably a lot.

The price in California may soon equal or surpass the current rates in Hawaii ( 34 cents per kwh ) or in Germany (27 cents per kwh).

As the price of electricity goes up, it will motivate people to use less of it.

It will also encourage more people to install solar panels on their houses and businesses. These actions will reduce how much electricity PGE will need to pump through its lines, making it easier to operate them safely.

The coming price increases in California will not be pleasant.

Unreliable electricity would be worse.

Paul F. deLespinasse is Professor Emeritus of Political Science and Computer Science at Adrian College. He received his Ph.D. from Johns Hopkins University in 1966, and has been a National Merit Scholar, an NDEA Fellow, a Woodrow Wilson Fellow, and a Fellow in Law and Political Science at the Harvard Law School. His college textbook, "Thinking About Politics: American Government in Associational Perspective," was published in 1981 and his most recent book is "Beyond Capitalism: A Classless Society With (Mostly) Free Markets." His columns have appeared in newspapers in Michigan, Oregon, and a number of other states. To read more of his reports — Click Here Now.

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California's electricity consumers will have to pay for what it costs to generate and transmit power safely. Since the current price of electricity in California, high as it already is, is insufficient to pay all of these costs, the price per kilowatt-hour will have to go up.
pge, newsom, bankruptcy
Tuesday, 26 November 2019 03:36 PM
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