California Republicans Propose Suspending Renewable Energy Mandate to Fund PG&E Infrastructure Upgrades

Dollars spent on forestry management have been found to do more to reduce carbon than other measures.

Two California lawmakers announced they will introduce legislation to help prevent future wildfires and Public Safety Power Shutoffs by PG&E, but Democrats are already giving a thumbs-down to the plan.

Senator Jim Nielsen (R-Tehama) and Assemblyman James Gallagher (R-Yuba City), who represent the town of Paradise and Camp Fire survivors, are authoring legislation to direct additional funding into utility infrastructure upgrades and forest fuel reduction projects by temporarily discontinuing the state’s renewable energy mandates until infrastructure and vegetation management conditions are improved.

In a California Globe interview, Assemblyman Gallagher said it’s clear that more money must be put into the energy company’s infrastructure. “Number one, we’ve already reached the first renewable mandate of 33%, due by 2020,” Gallagher said, referencing the 2011 Renewables Portfolio Standard which required 33% renewable energy in all electricity provided in California. “PG&E is at 39% renewables. If we just look at non-carbon energy, PG&E is producing 85% of its power from renewable and carbon-free sources.”

“We’ve already done a lot,” Gallagher said. “But we’re getting killed by the wildfires – literally.” He said 85 people died last year in the Camp Fire in Paradise, and many more lost their properties. “… the result of outdated infrastructure.”

Gallagher said last year 45 million metric tons of carbon was emitted by the wildfires. The year before it was 39 million metric tons. “That’s more than nine times California’s combined reductions achieved in 2016 and 2017,” Gallagher said. “We are literally losing when it comes to element policy. Why don’t we readjust this, because the power outages are the result.”

Gallagher said that every dollar spent on the additional cost of renewable energy is one dollar that is not available to be spent on vegetation management, line insulation, “undergrounding” lines, and other grid-hardening measures.  “Dollars spent on forestry management have been found to do more to reduce carbon than other measures. Science shows that redirecting funding to forestry management gets us a better bang for our buck in carbon reduction,” said Gallagher.

Gallagher said PG&E acknowledges that its infrastructure is so old, it can’t hold up to regular winds, much less high winds. They say it will take 10 years to complete all of the equipment and infrastructure upgrades. “That is totally unacceptable for the people and businesses of this state, to face 10 more years of power outages,” Gallagher said. “So, money needs to go into fast-tracking these upgrades.”

Gallagher said PG&E is currently spending $2.4 billion annually on a legislative mandate to buy renewable power. At the same time, the company spent only $1.5 billion to update its century old infrastructure in 2017. “That’s a lot of money to put into infrastructure if we suspend the renewables mandates,” Gallagher said.

He also said during this time there would be no salary increases or bonuses at PG&E, and any savings goes into infrastructure upgrades. “We will only use existing ratepayer money – no new spending.”

Gallagher said that if Democrats say no and force PG&E to spend more on infrastructure, then PG&E will have to go to the California Public Utilities Commission for approval to make ratepayers cover the infrastructure upgrade expenses.

“We are keeping the plan ratepayer neutral,” Gallagher said. “We are already meeting the goals on the sourcing side.”

Gallagher also said revenues from the cap-and-trade auctions all go into the state’s Greenhouse Gas Reduction Fund (GGRF). “They only just started putting some of this money into forest management — about $200 million a year for the next five years.”

Gallagher said that’s all good, but it is still only a fraction of the Greenhouse Gas Reduction Fund. “The Legislative Analyst’s Office says the most cost effective way to reduce carbon and deal with other fundamental causes of wildfires is the “fuel.”

The LAO report identifies the huge backlog of forest lands requiring actions to restore forest health and decrease wildfire risks including 20 million acres on state regulated lands and 9 million acres of federally regulated lands.

The LAO report recommended:

✓ Improve and Increase Funding and Coordination.

✓ Revise Certain State Policies and Practices to Facilitate Forest Health Activities.

✓ Improve Landowner Assistance Programs to Increase Effectiveness.

✓ Expand Options for Utilizing and Disposing of Woody Biomass.

The LAO also recommended allowing the sale of timber without a timber management plan in specific cases when the primary purpose of the project is forest health in order to help offset the costs of beneficial forest thinning projects.

Gallagher said he hopes for a non-partisan agreement as this plan would benefit everyone in the state.

But with the Renewables Portfolio Standard being the Holy Grail for the left, former Senate leader Kevin de León claimed the Republican proposal would increase PG&E’s operating costs. Kevin de León disingenuously claims renewable energy sources are cheaper than natural gas or coal alternatives. If renewable energy sources were really cheaper, why does state government have to dictate energy companies use them, and then provide massive subsidies?

Renewables provided only about 5% of the end use sectors total energy needs in 2018 with that small 5% renewable use percentage forecast to continue through year 2050, according to Larry Hamlin. “The greater the mandated use of renewables the higher the costs incurred by consumers to pay for trillions of dollars in government required subsidies needed to build these resources.”

Lastly, Nielsen and Gallagher will also be introducing a joint Resolution to urge the federal bankruptcy court to rescind PG&E’s current high-cost renewable energy contracts. Reports show that some of PG&E’s pre-2012 long-term solar contracts now cost the company an added $2.2 billion per year due to outdated above-market prices.  These contracts could be voided in the bankruptcy to allow PG&E to buy the same renewable power at a lower price. Savings from renegotiating these bloated contracts could be used to invest in projects that reduce fire danger and future blackout events.

Another option is for the federal bankruptcy court to allow the PG&E renewables division to be separated and sold off.

Democrats Already Signaling ‘No Deal’

Rather than discussing and debating the merits of such a temporary plan, Senate President pro Tempore Toni G. Atkins (D-San Diego) immediately issued a statement Tuesday refuting Nielsen’s and Gallagher’s plan. “The Republican proposal to reverse the state’s progress on clean energy won’t solve the problem and actually makes things worse,” Atkins said. “Replacing clean energy sources with more energy generated from fossil fuels exacerbates the climate change that is causing the extreme weather and wildfires we are facing, and it would mean higher bills for ratepayers by reducing power available from less expensive wind and solar sources. The Legislature has allocated billions of dollars for fire prevention and response and further has directed utilities in the state to spend billions more to harden their systems to reduce the incidence of fires started by power lines and transformers.”

Again, Atkins ignores that renewable energy is not cheaper, and that the real problem facing California’s clean air goals is the wildfires, which last year emitted 45 million metric tons of carbon.

It’s Deja Vu All Over Again

In 2010, Assemblyman Dan Logue (R-Marysville) proposed suspending AB32, California’s Global Warming Solutions Act, which authorized cap and trade, until unemployment in the state fell below 5.5 percent from 12.4 percent. Logue warned that California businesses were being priced right out of competition because of AB 32’s mandates. “We just can’t compete in California,” said Logue. “Texas and Nevada will be getting more of California’s businesses if AB32 continues.” Logue said that California energy costs are already 35 percent higher that the rest of the nation, and he produced a list of energy businesses that “can’t wait to get out of California, because they cannot afford to stay here.”

Assemblyman Logue described AB 32 as having the potential for causing the “greatest loss of freedom in this country.”

Logue’s bill and subsequent ballot initiative were killed by Democrats. He was right, and his predictions came true.