As we have experienced in recent years, energy is increasingly more expensive here in California. In the Los Angeles region, energy prices are 45 percent higher than the nationwide average. Under new legislation passed this summer, this trend is only going to get worse.
Why? Earlier this year, the governor laid out unrealistic environmental goals for our state, including a mandate that utilities increase the amount of energy they get from renewable sources from 33 percent to 50 percent. Democratic leaders were all too eager to jump on this agenda, pushing through legislation to increase energy costs on everything from heating to electricity. This adds onto the estimated 47 percent increase in average electricity rates already expected by 2030, according to a study conducted by Energy and Environmental Economics, Inc.
In and of itself, there is nothing wrong with renewable energy. Where we run into problems is with arbitrarily mandating how much of our power grid should originate from sources deemed “renewable” by the state. If there is one thing I have learned from my time in Sacramento is that when the bureaucrats make something mandatory, it means we will all be paying more.
But some renewables are considered more equal than others. For example, rooftop solar panels on individual homes do not count toward the renewable energy percentages required by law.
It is the same with hydroelectric power. Even in an extreme drought, California got roughly five percent of its power from clean water sources last year. During wet years, that can increase to as much as 15 percent. Yet when the drought ends, expanding hydro power in California is not likely to happen. Most hydroelectric power sources are not considered “renewable” by Sacramento’s energy bureaucrats because it is not popular with extreme environmentalists. Innovations in natural gas production also present low-cost possibilities for our energy supply. Despite this technological progress, California law now mandates we reduce our use of natural gas energy.
These guidelines are clearly intended to favor one group over another. The carve-outs expose the reality that the special interests involved in renewable energy, such as the large solar lobby, are just as powerful as the big businesses that the majority party often decries.
With all of these exceptions, chief among the state’s concerns should be the cost to consumers. However, no state agency has conducted an economic analysis to determine exactly how much these mandates will affect utility bills and jobs. Why rush into this venture without at least knowing the true impact?
One of my proposed solutions was Senate Bill 728, which would require the Public Utilities Commission to conduct a study and public forums on the economic impact of higher standards before raising the renewable mandate already on the books. Unfortunately, the majority party killed the idea, clearly concerned about what it could reveal.
Even without an official analysis, the evidence shows how much these mandates have harmed our state’s economy. Consider manufacturing. Manufacturers take energy prices into account when deciding where to locate or expand their operations. Because of the current energy mandate, California’s manufacturing sector has fallen well behind the rest of the nation. Over the last decade, our state has lost more than 260,000 good-paying manufacturing jobs. When manufacturing shuts down, it also impacts jobs in industries like trucking and construction.
Renewable energy mandates have also hit families across the economic spectrum. The term “energy poverty” is used to describe the situation when 10 percent or more of a household’s income is spent on basic energy needs. In California, more than a million families already meet this description, especially in the inland parts of our state, and this figure will likely continue to rise. After reading this, many of you may now look at your own utility bills to see how it is impacting your personal budget. Instead of requiring a narrow range of expensive and unreliable renewables in order to satisfy intangible and ill-defined climate change goals, California should be focused on promoting the use of clean energy, regardless of source. In his time, Winston Churchill articulated a healthy skepticism of the power of the state and its tendency to want to manage and control industry. He warned of the damage such influence could inflict on a free society. Under these growing mandates, administered by the bureaucracy, we are slowly moving in that direction.
And years down the road, because of the state’s arbitrary demands, the question will remain, how much will it cost our families and businesses?
State Sen. Mike Morrell, R-Rancho Cucamonga, represents the 23rd District. He is a member of the Senate Committee on Energy, Utilities, and Communications.
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