California utility Pacific Gas and Electric can save billions of dollars for its ratepayers while supporting the environment with a distributed solar strategy, said Environmental Working Group.
Environmental Working Group (EWG) is calling for major California utility Pacific Gas and Electric (PG&E) to change course, and begin supporting distributed rooftop solar and energy efficiency programs in pursuit of a safer, more resilient, more environmentally conscious, and cheaper electric grid.
EWG said that for nearly a decade, PG&E has funded lobbying group Edison Electric to quash energy efficiency and rooftop solar programs, instead preserving the utility’s ability to control the market and charge high rates for vast amounts of centralized power. Most recently, the utility, through its lobbyists, has supported the battle against net metering, a key structure that supports the value of customer-sited solar panels.
EWG suggested a few high-level changes that could help rein in PG&E’s practices, bringing the utility closer to its mandated goal of providing reasonably priced, reliable energy for years to come. The group calls for a more robust regulatory scheme over infrastructure investment, making least-cost, decentralized grid planning a priority, and providing working-class customers access to clean energy. It also calls for eliminating rate structures that sustain the centralized utility business model, which it said hinders clean energy development. EWG also said PG&E should be barred from shifting liability onto ratepayers related to negligent behavior, like the neglect of high-powered transmission lines that led to widespread wildfires in the state.
In contrast with PG&E’s claim that customer-owned rooftop solar is increasing electric bills, the argument conspicuously ignores the massive buildout of its transmission system that has cost $9 billion over the past decade, 70% of which had no regulatory approval. EWG said the nearly $3 billion electric utility transmission investment in 2020 will equate to $10 billion in ratepayer costs over the lifetime of the investment.
California electric utilities have among the highest profit margins in the country. The loosely regulated buildout of centralized transmission is a boon to monopoly utilities, which need to create capital expenditures to justify rate increases in the ratemaking process.
Despite numerous analyses showing massive cost savings by switching to a decentralized model, efforts to sustain the old grid remain. In 2018, the California Independent System Operator (CAISO), which oversees the state’s transmission system, estimated customer solar and energy efficiency investments avoided $2.6 billion in transmission and distribution system upgrades.
In addition, Vibrant Clean Energy released a study showing that, by 2050, a decentralized grid, with solar plus storage, energy efficiency and other measures to balance supply and demand, would save $120 billion, compared to a centralized, renewables-dominated electric grid.
EWG released a four-part investigative series into the history of PG&E and its failure to adequately serve Californians reliable, clean, and reasonably priced electricity. Part one focuses on the history of flawed energy investments, part two on PG&E’s profit-boosting efforts at the expense of ratepayers, part three on the billions in bailouts for misguided power planning, and part four on an equitable clean energy plan for overhauling PG&E.
EWG president and co-founder Ken Cook said, “PG&E is crushing Californians in their wallets, it’s killing Californians in devastating wildfires that are the direct result of its misguided energy planning, and it’s harming the planet by adding to the climate crisis with a rigid addiction to fossil fuels. We hope this investigation will finally spur the state to rein in the out-of-control utility and force real reform within the company. Long-suffering Californians, desperate for relief from ever-increasing energy bills, thanks to PG&E, deserve no less.”
