CALIFORNIA FOCUS
FOR RELEASE: TUESDAY, MARCH 22, 2022, OR THEREAFTER
BY THOMAS D. ELIAS
“UTILITY PROFITS: UNSPOKEN FACTOR
IN ROOFTOP SOLAR FIGHT”
A new
judgment day arrives soon for rooftop solar development in California, with the
state’s Public Utilities Commission due to issue a rewrite of its abortive
attempt to dun current and future residential solar owners unprecedented sums,
thus discouraging development of home-based solar energy.
Never
mind that more than 1 million homes in this state have solar panels, making
California a world leader in localized use of energy from the sun.
Never
mind also that cutting back expansion of rooftop solar would compel utilities
like Pacific Gas & Electric, Southern California Edison and San Diego Gas
& Electric to buy ever more energy from solar thermal plants in remote
parts of the state’s vast and sun-drenched deserts.
There’s
nothing these privately-owned, profit-driven utilities want more than that. For
them, buying power from distant solar farms means vast profits. That’s because
getting the desert’s solar power to cities requires hundreds of miles of new
transmission lines, which cost many billions of dollars.
Since the
private utilities get a guaranteed rate of return (e.g. profit) on capital
investment that usually varies between 10 percent and 14 percent per year for
20 years, the more desert-based solar thermal, the more money they collect from
customers.
So it was
no wonder the utilities all lined up behind the PUC’s clumsy first attempt at
cutting back rooftop solar. They even financed the largest “citizen” group
pushing for that change.
The attempt, killed just
before it could be adopted in late January, would have assessed new monthly
fees for owning rooftop solar, also reducing payments to owners when they send
excess energy to the state’s overall electric grid.
Opponents
call the present system a “subsidy” of the rich by the poor and others,
including renters who don’t control their rooftops. And it is, to a degree. But
those folks would pay far more in rate increases from new solar thermal
transmission lines than they now pay in unofficial subsidies to rooftop solar
owners.
Not a
single official analysis of the PUC’s now-dormant proposal even mentioned this
key fact. The precise amount of new rate increases to assure utilities profit
from new power lines remains unknown, because no one can yet predict how much
more solar thermal power they will buy.
Because
the PUC’s plan did not mention this reality, it was incomplete and deceptive.
Similarly, when PG&E happily applies for rate increases to pay for
undergrounding many of its fire-prone lines, it also won’t mention its
guaranteed new profits.
Gov.
Gavin Newsom also didn’t mention this when he demanded the PUC change its
proposed new solar pricing system. He responded only to complaints from rooftop
owners who disliked the planned new structure and to complaints it would cost
thousands of “green” solar-installation jobs.
But there
is no doubt the PUC knew it was ignoring a vital factor in the pricing of solar
power.
Said a
February 2021 PUC study on electric rates of the last 10 years and the next
decade, “The growth in rates can be largely attributed to increases in capital
additions…in transmission and distribution.”
The study
went on to forecast a 10-year average annual price increase for power from
PG&E at 3.7 percent. The figures were 3.5 percent for Edison and 4.7
percent for SDG&E.
That
would give each company guaranteed rate increases just about the same as those
they’ve gotten over the last nine years, when PG&E prices rose by 37
percent and SDG&E rates by 48 percent, according to the report.
It is
plain dishonest for the PUC and critics of the present rooftop solar program to
ignore this reality and claim the pulled-back proposal would have meant savings
for renters and lower-income electric customers.
But
dishonesty rarely stops the often scandal-plagued PUC. It has played ball with
the utility companies, in matters as varied as wildfire expenses, by reportedly
not collecting fines it claims to assess and by forcing customers to pay for
the Edison-caused shutdown of the San Onofre Nuclear Power Station (SONGS).
The discredited
rooftop solar plan was part of that old song, and the new plan will be, too,
unless it strongly factors in utility profit increases and rate hikes that
would follow decreased rooftop solar installations.
-30-
Email Thomas Elias at tdelias@aol.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, go to www.californiafocus.net
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