The Electrical Industrial Complex

I headed the California Public Utilities Commission 20 years ago, at the dawn of California’s rooftop solar revolution. We opened the doors for families and businesses to go solar to grow the amount of clean, local-solar electricity produced in California. We knew then that community-based solar power stood as a bulwark against the Enron-type electricity-trading shenanigans that California had just barely survived.

Subsequent Governors, both Republicans and Democrats, embraced rooftop solar, and millions of Californians responded, making local solar the key to a clean, safe, reliable energy future. Community-generated solar power not only strengthened the safety and reliability of California’s electricity grid, it reduced the overall peak amount of electricity that California needed to buy on hot summer days. And it shrank the number of expensive new transmission lines California needed to build. Supporting local rooftop solar benefitted all customers through lower costs; less water used by power plants for cooling; less degradation of wild and sensitive lands used to site large-scale power plants; and fewer health problems caused by highly-polluting alternatives.

Now, that bright, sustainable trajectory may well be cut short by the California PUC’s outright attack on solar customers. The PUC stands poised to gut California’s amazingly successful local-solar program. Their plan¹ imposes unwarranted, draconian charges on every solar customer, levying monthly fees just to stay on the grid, fees that could total more than seven times what customers are paying today. Unjustifiably, the PUC plan slashes payments that solar customers receive for selling their power to the grid. These customers provide clean electricity without the need for huge transmission lines to bring electricity from out-of-state. Those transmission lines are not only extremely costly; they also cause wildfires and trample sensitive desert environments, which local solar production does not.

The PUC’s conduct fails the tests of both facts and fairness. This rogue administrative agency relies on skewed, results-driven analysis designed to kill California’s solar program. The PUC plan ignores the reams of evidence of the benefits of local solar, and its initial decision even admitted that that the PUC failed to consider all of the benefits of solar in order to reach its crimped conclusion that California’s current solar program should be changed. With its crusade against solar customers, the PUC creates winners (private utilities) and losers (California customers, our health and the environment) by disregarding inconvenient facts about the important benefits we receive from community-based solar while cooking up inflated costs attributed to local solar customers. By ignoring nearly all of the benefits of local-solar production, the PUC tips the scales against solar customers, favoring the utilities.

Why? Why kill a successful, cost-effective clean-energy source that benefits everyone? Just follow the money to understand why, because this community-based solar dispute is all about money. When big, centralized power plants produce electricity – be they gas-fired, coal or even solar – the utilities need big, expensive transmission lines to carry that power to the businesses and families that use it. That’s because those centralized power plants are now built in rural, desert, or remote areas instead of the poor urban communities that bore the burden of large-scale, polluting power production in the 20^th century. Now rural and remote areas, including desert areas throughout the southwest United States, increasingly bear the burden of industrial electricity production – both gas-fired power plants as well as large-scale, often utility-owned, solar & wind developments.

Thanks to changes made by federal and state regulators, building those enormous transmission lines now translates into new sources of profits for the utilities and transmission companies that own the lines. The Federal Energy Regulatory Commission – FERC – has worked overtime to bestow lucrative incentives for transmission infrastructure, inviting profiteering in transmission projects. FERC’s Order 679² allows unwarranted, estimated, and unproven costs; grants unjustified profit increases; and approves unsubstantiated ratemaking assumptions for transmission projects. Along with FERC’s arcane accounting procedures, Order 679 enables utilities and other transmission owners to inflate their actual costs and earn extraordinary profits, all paid for by consumers. So the causes of excessive transmission costs are not hard to identify: profiteering enabled by lax regulation and regulators’ utter disregard for costs, allowing transmission owners to earn higher profits by building new transmission lines, disconnected from the actual costs of constructing those lines.

California has also acted as an enabler of transmission owners’ fleecing of California ratepayers by larding on excessive transmission charges and inflating costs. The California Independent System Operator (CAISO), a private corporation that runs California’s transmission grid, imposes a “transmission access charge” which comprises a rapidly increasing component of California retail electric rates. And California consumers already pay punishingly high electric bills. The transmission component of California electric rates totals six times more than the same component of Arizona electric rates. Even the PUC identified transmission costs as one of the fastest-growing components of California’s high rates.³

But every new rooftop-solar home or business means less need to build those incredibly profitable transmission lines. So California’s utilities are engaged in a scorched-earth fight to kill rooftop solar before community-based solar kills their golden goose of transmission profiteering. Community-based solar throws a big wrench in those besotted sugar-plum dreams of bigger and bigger utility profits, all paid for by ratepayers. FERC’s Order 679 not only fosters building unneeded transmission lines to nowhere that further damage sensitive desert and wild environments – it also enables the Sons of Enron to ride roughshod again over California’s economy and safety. Local solar saves us from building unneeded and expensive interstate transmission lines, lines that Enron and its cronies used so successfully to fleece Californians twenty years ago.

FERC-authorized profiteering needs to stop. But until state as well as federal policymakers get serious about controlling costs, consumers and our economy will suffer needlessly, crowding out necessary system upgrades because the profiteers push through expensive transmission boondoggles. California’s PUC should concentrate on shrinking those exorbitant costs instead of backsliding on our climate commitments by abandoning thriving local-solar programs.

After public outcry from consumers and businesses alike, the PUC did allow additional public comments this summer. But they limited those comments⁴ only to the questions of how higher fees and grid connection charges should be implemented – explicitly disallowing any evidence of whether and how local solar production benefits the grid, the environment, and the economy or questioning how the PUC calculated costs – the issues that California law charges the PUC with addressing.⁵

To comply with the law, the California PUC must incorporate all the available data about the reality of community-based solar generation – and not just rely on solar opponents’ studies that exaggerate the costs and minimize the benefits of local-solar production. The PUC’s regulatory nibbling at the edges of its scheme to kill solar power produced locally in California won’t cut it. Modifying the PUC’s defective plan by only increasing fees four-fold, instead of seven-fold, won’t fix the fatal flaws or eliminate the myriad pollution, safety, and water problems that killing community-based solar will cause.

By contrast, Florida has rejected efforts⁶ to hobble local community solar programs and instead has stayed on track to provide easy access to local solar production by Florida’s businesses and families. California regulators’ behavior stands in stark and shameful contrast and will set California back decades in its quest to decarbonize its electricity sector. Instead of killing community-solar power production that reduces pollution and the health and climate consequences of fossil-fueled electricity, the PUC should expand solar accessibility for all Californians, to achieve a safe and clean California for everyone.

The PUC justifies its plan to kill off rooftop solar by asserting that only well-off Californians can afford to install solar panels, thus disadvantaging low-income customers. Although 150,000 low-income customers have managed to install solar panels despite the PUC’s roadblocks, the PUC has worked hard to limit solar accessibility at every turn. To get back on the right track, California should scrap the PUC’s declaration of war against local solar and the PUC should go back to the drawing board to allow greater solar access in all its programs.

The California PUC should expand solar access by:

• reforming its restrictive eligibility rules and end its hostility to expanding local-solar programs;
• changing its rules to make community-based local solar available to renters – 45% of Californians;
• allowing rooftop solar to be financed through customers’ bills – so that Californians, whatever their income, can install solar power; and
• reversing its 2021 decision preventing the CARE low-income program from offering the same solar eligibility and payments to CARE customers who install solar as the PUC now offers to other solar customers.

California simply cannot reach its clean energy and climate goals without going all in for community-based solar. And California cannot protect its economy from onerous unnecessary cost burdens if it continues to spend like a drunken sailor on big central-station solar projects and new gas-fired power plants – all bought at premium prices. Expanding locally-produced solar energy won’t waste California’s precious water, wildlands, or deserts for industrial power production the way large-scale electricity power plants do, nor will it cost as much. And expanding community-solar energy production will curb the transmission profiteering that not only drives up prices but despoils our earth.