Imagine the public outcry if a legislative committee suddenly raised future taxes on almost every Californian and then said no one would know the amount until the tax bill arrived. Fury would be a mild description of what might follow.
Yet there is no outcry at all when the state Public Utilities Commission does exactly the same thing.
For hikes in electric rates are just like taxes: You pay or severe consequences follow. Ignore your electric bill and the lights go out. Also the television, appliances, most computers and most rechargeable gadgets from iPads to cell phones. Severe consequences, indeed.
This Is a Strategy?
The latest act of secrecy by the five-member PUC (commissioners are appointed by the governor to five-year terms, but he can’t fire them) came in mid-November when it approved a contract that will see Pacific Gas & Electric Co. buy 617 gigawatt hours of electric power yearly from the yet-to-be-built Mojave Solar development in the high desert of San Bernardino County. That will be enough juice to power a medium-sized city.
The development is similar to others in the desert region that will provide power to Southern California Edison Co. and San Diego Gas & Electric Co. All are part of the state’s drive to produce about one-third of its electricity from renewable sources well before the end of this decade.
In none of the cases have utility customers been told how much they’ll pay for each solar kilowatt hour. All we know for sure is that short of installing rooftop solar panels, the greener power becomes, the more it will cost. For the most part, the big projects are backed by federal loan guarantees totaling almost $10 billion.
The Worst Example
The secrecy has seemed most egregious in the newest case, Mojave Solar, owned by the Spanish firm Abengoa Solar, which has a $1.4 billion loan guarantee. The PUC has publicly said energy from Mojave Solar will cost consumers at least double the price of power from a conventional gas-fired generating station. Will that be 2.5 times as much or 200 times as much? We don’t know.
The PUC cites a rule it adopted in 2005 as the reason for its secrecy. That rule allows price confidentiality to last between three and five years when it’s “essential to avoid a repetition of electricity market manipulation” like what caused the energy crunch of 2001-2002.
But it’s hard to see how disclosing the price of solar thermal power from massive developments covering thousands of desert acres could cause market manipulation.
“I can’t understand how that follows,” said Leonard Snaider, a retired PUC staff lawyer who also served as a deputy Los Angeles City Attorney specializing in utility rate cases. “Nope, it can’t cause market manipulation. So this has an odor.” In fact, it stinks.
The real explanation for the secrecy plainly lies in the realms of public policy and public anger. “The pricing will be so outrageous that I think it’s not politically prudent to reveal the real costs,” said Snaider.
Hinting that this assessment is correct was the statement of PUC member Mike Florio, a longtime consumer advocacy lawyer, explaining his vote against Mojave Solar: “We would be better off paying the developer back the $70 million it has already spent rather than take on the enormous costs of this project,” he said.
There were further hints in the statement of PUC President Michael Peevey, former president of Southern California Edison, explaining his vote for the project: The renewable nature of solar power and the fact solar thermal energy comes more steadily and reliably than electricity from wind turbines or solar photovoltaic panels, he said, “adds un-quantified value to the Mojave Solar project…as the cost of solar photovoltaic continues to fall and we rely more heavily on that technology, it is worthwhile to spend a little bit more on projects like Mojave….”
So the head of the PUC believes the fact that one form of renewable electric generation is getting cheaper justifies forcing consumers to spend billions on a more expensive type that’s increasingly obsolescent. This is bizarre reasoning.
The bottom line is that politicians have decided California must have huge amounts of green energy, no matter the cost. The commission charged with arranging this apparently feels that if the public knows the costs before the solar plants are built, it might rebel.
No one, of course, can know this for sure because the PUC is keeping all costs secret. Consumers don’t know how much more a solar kilowatt will cost than one from a gas-fired plant or one from the nuclear facilities at Diablo Canyon or San Onofre.
If the PUC has its way, they won’t find out until the new plants are a fait accompli and large new charges begin appearing on their monthly bills. That is simply wrong.
Mr. Elias may be contacted 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, visit www.californiafocus.net
