Thursday, January 8, 2015

Energy costs are expected to climb

Pasadena Star News
By: Cynthia Kurtz
Published: 1/8/2015 

The lower price of gasoline has helped low and middle income consumers and given the economy a shot in the arm. But gasoline isn’t the only fuel that keeps our state running. Natural gas and electricity are also important. They heat our homes, cook our food, and run our factories. The costs of these energy sources have the potential for more dramatic impacts on the economy and job growth than the price of gasoline.

Trying to get a handle on the future prices for natural gas and electricity is a daunting task. For starters, California’s energy resources are regulated by a host of state agencies - California Air Resources Board, the California Independent System Operator, Caltrans, CAL FIRE, the California Public Utilities Commission and the California Energy Commissions.

Each of these agencies is tasked with a specific set of responsibilities and a specific mission. Each has rule-making authority and the ability to pass on the costs of those rules to the entities being regulated, usually gas and electric utilities. Those costs then become part of the future rates we all pay.

These regulations and rules are intended to meet goals most of us support such as increased conservation, reduced environmental impacts, or improved public health. But between setting the goals and implementing the rules there is no one responsible for considering how all these regulations work together, whether they will assure that California has adequate energy supplies, and what will be the cost.

Cost does matter. According to a report by the Public Policy Institute of California, 76 percent of California adults favored a law passed in 2011 that requires one-third of the state’s electric power to come from renewable energy sources by 2020 as long as electricity rates stayed the same. When respondents were told that the green power might come with higher rates, the support dropped to 46 percent.

Based on a 2013 California Energy Commission Staff Report the cost for electricity could be as much as 27.8 percent higher by 2020 and natural gas could be 108 percent higher. Those estimates were based on no new rules after 2013 but the Legislature is already looking at new 2050 goals for emission reductions.

Fortunately, there is a coalition asking for a comprehensive review of the impacts of state energy policies - Californians for Affordable & Reliable Energy (CARE). 

Speaking for the group, California Business Roundtable President, Robert Lapsley, recently told a SGV audience that “although it does not receive the same attention as other issues, energy policy is the most critical and potentially impactful decision-making that is happening in state government. It will have lasting impacts on the economy, income levels, poverty and the ability of the state to generate adequate revenues to fund state priorities.”

CARE does not oppose actions to protect the environment or public health but does believe that California needs a comprehensive energy plan. According to the National Association of State Energy Officials, 38 states have operational energy plans and 22 are either updating their plans or developing new ones.

California public policy is on the cutting edge in many ways but crafting a comprehensive state energy plan must become a priority.

If you are interested in learning more about CARE, visit CAREaboutEnergy.org.