Thomas Elias: Western regional grid perilously close to reality
August 20, 2018
Almost daily, California's entry into a western regional electricity grid grows nearer.
As the legislative bill to move the state into a deal with coal-oriented states like Utah, Idaho and Nevada moves toward passage, the state also grows nearer to a real risk of repeating the energy crunch that produced big rate increases and weeks of brownouts here in 2000 and 2001.
There's also great irony in the strong support this bill, known as AB 813, draws from Gov. Jerry Brown, the moving force behind California's steady progress toward getting most of its electricity from renewable sources including solar, wind, hydro-power and underground geothermal heat. For the bill carries a major risk of invalidating California's green energy initiatives.
That's despite steady denials from the Brown-appointed Independent System Operator, the agency which has run the state's electric grid since the energy crunch with the specific mission of preventing repeats of the market manipulation which caused that crisis.
And yet … Brown and his ISO board members are backing the regional grid, claiming it might save California consumers as much as $1.5 billion a year. That's less than $20 a year per electricity customer, not much of a benefit compared to the risks involved.
One reason the bill draws strong legislative support is that simple word "regional." Bigger is better and more efficient, goes the frequent belief, even though that does not always prove true.
Recommended Stories For You
One problem for California in this proposal is that the new western regional board of directors would be appointed largely by the electric industry. That's like letting Enron or its modern equivalent run the grid. It's giving the fox control of the henhouse.
The potential danger to California's green energy rules comes just as former state Senate President Kevin de Leon, now running for the U.S. Senate, pushes hard for a commitment to 100 percent green energy by 2050, just 32 years from now. De Leon claims there's a new urgency for clean energy, spurred by the current symptoms of climate change, like frequent record-level heat and the related wave of huge wildfires.
But the regional grid would allow any such rules to be overridden by the Federal Energy Regulatory commission, now led by appointees of President Trump and recently showing a great desire to keep polluting coal-fired power plants in business indefinitely.
Earlier this year, for example, FERC passed a requirement that regional transmission organizations (like the western grid) counteract state-level renewable energy policies. This essentially makes FERC a strong opponent of California's clean-power rules and the regional grid would allow it to countermand any such standards.
It's hard to see why legislators would essentially give over one of their significant powers to an agency currently determined to undermine California's goals. Yet, backers say "Regionalization…would mobilize more states to engage with Trump if FERC were to do something crazy." How likely to defy Trump are the solidly Trump-backing states of Utah and Idaho?
The regional grid bill also says big utilities, like Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric, would be entitled to "just and reasonable compensation" for their past investments in transmission lines if control of the state's grid changes.
Why include that provision when the costs of those facilities are paid by consumers through their monthly bills, not by the companies themselves?
If the utilities could somehow get double-paid for their power lines, that might explain why they're not opposing regionalization.
Plus, there has so far been no thorough public analysis of the full financial impact of regionalization. For sure, until such a report is made and proven reliable, this plan should go no farther.
But chances are it will. For the Legislature has a history of passing plans and attempting to deal with fiscal consequences later on. That's what happened with the disastrous electric deregulation plan passed in 1998 that led to the energy crunch. Several legislative committees did the same this year in passing single-payer health proposals with no definite sources of financing.
The bottom line: A regional energy grid is simply too risky for California, even if there's some (yet unproven) possibility it might save customers a dollar or two each month.
Email Thomas Elias at email@example.com. His book, "The Burzynski Breakthrough, The Most Promising Cancer Treatment and the Government's Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, visit http://www.californiafocus.net.