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Editorial: Warning on cost of energy goals

If you thought your monthly utility bills were high now, just wait.

At least that’s what a new report coming from a government watchdog group is saying about California’s drive to reduce the state’s dependence on fossil fuels.

But according to the nonpartisan Little Hoover Commission’s report, “Rewiring California,” ratepayers face soaring electrical bills because of the move toward adding more solar and wind energy to the power grid.

While many ratepayers would say they’ve already seen a spike in their electric bills, the report says that a “balkanized” and “dysfunctional” grab bag of state agencies are on the way to creating a “profoundly expensive policy failure.”

That is, unless someone or some agency in state government steps in to develop a “comprehensive energy strategy” to ensure policies, goals and regulations don’t pile up, overlap and send costs along to ratepayers.

California currently has 11 programs on the books for developing renewable energy sources – all with their own goals and timelines. A maze of regulations and regulatory agencies seems certain to follow, all of which could further drive up costs.

While the state Public Utilities Commission has quickly responded by saying that electricity rates are expected to increase by only 2-3 percent a year over the next five years, tracking inflation, the report suggests the current situation could lead to a crisis
much like what happened a decade ago under former Gov. Gray Davis, when a statewide energy crisis sent electricity rates into the stratosphere.

The biggest unknown arcing across California is the impact of the state’s 2010 declaration that by 2020, a third of all power derived by state utility companies will come from wind, solar and other renewable sources.

But to incorporate these renewable sources, the state approved 20-year power agreements that lock in “unnecessarily high prices,” according to the commission, that will lead to considerable pain for ratepayers and could spark significant protests. This would happen while the rest of the nation hopes to see lower prices because of the boom in domestic natural gas production.

The report also finds the energy initiatives will have an environmental cost, noting the rush to use desert areas for building large-scale solar power plants.

One possible solution, according to the report, is to create a single state energy agency that would coordinate the web of policies and initiatives in the state.

It’s also somewhat heartening that Gov. Jerry Brown has agreed to review the report, rather than burying it in the dust bin where most reformist efforts go to die.

We hope the governor reads the part of the report that urges him to assess the real cost of California’s various energy initiatives and then determine whether these also truly reduce the state’s reliance on fossil fuels. In the interim, the governor should heed the commission’s recommendation he declare a moratorium on further renewable energy policies.