Pacific Gas & Electric Co. is filing for bankruptcy. Again.
When PG&E filed in 2001, it was the third largest bankruptcy filing in U.S. history. Once more, the costs of failure will be passed onto California taxpayers in the form of higher utility bills. This time, CalFire determined that PG&E was responsible for 17 wildfires in Northern California in 2017. Entire towns have been reduced to ashes as a result of faulty equipment and negligence.
On top of financial concerns, PG&E has dragged its feet on committing to California’s 100 percent renewable energy portfolio goal whinging in a public statement that it is “not affordable, …. customers must be protected from unreasonable rate and bill impacts.”
It is easy to imagine how the company could plead hardship in complying with Senate Bill 100, which set forth the 100 percent renewable electricity goal by 2045, even after a generous forgiveness of debt.
Californians are facing higher utility costs and incalculable loss of human lives and landscapes from devastating wildfires while a major utility resists state mandates for renewable energy targets. Why would the public want to re-invest in a company that has failed twice over?
It does not have to be this way.
Many countries have reduced their greenhouse emissions while growing economically. Sweden, for example, has reduced per capita greenhouse gas emissions by 60 percent since the 1970s.
In part, such climate success is possible because Sweden has smaller scale energy and heat supply utilities. Municipal power companies were able to outcompete the national power company in cost while reducing emissions.
California communities could do the same. Many already do. The Sacramento Municipal Utility District, which serves much of the Sacramento region, has rates that are 30 percent lower than PG&E and offers a similar percentage of renewables to PG&E. The Sacramento utility district’s platform for brokering solar production and use is sophisticated, enabling smaller-scale renewable production and grid balance.
Other local energy control options exist.
Community choice energy agreements, programs in some communities that bring local control, freedom of choice and competition into the electricity marketplace, have helped set the stage for renewable energy transition.
Now, 19 community choice aggregation programs in California serve more than 8 million customers. Unlike PG&E, they say they are ready to meet the renewable target.
The California Public Utilities Commission estimates that up to 85 percent of the state’s retail load could be served by community choice aggregation programs, as well as by direct access providers, by 2025. Yet PG&E continues to undermine community energy efforts. California policymakers should double down to protect and support such local energy production efforts.
Indeed, the decision to site new energy infrastructure occurs at the local level, requiring community support for permitting and construction. As communities consider the move to more renewable energy production, they should weigh benefits against concerns.
My own review of 45 studies that investigate the price effects on housing for various energy infrastructure notes that wind and residential-scale solar are some of the few energy production techniques that do not cause nearby property value depreciation.
The impact of energy extraction, production, and transmission have long-term effects on the landscape, housing values and community health.
Why leave such decisions up to PG&E? Instead, PG&E could sell off its infrastructure and land easements to cities and counties. Municipalities, cooperatives or more local energy brokerage companies would be able to set up shop.
Investing in California’s renewable future could improve safety, save utility costs, and give local jurisdictions control over where to site new renewable energy facilities. Cities and counties, with state support, should make PG&E an offer and buy back the power.
Catherine Brinkley is an assistant professor of human ecology at University of California, Davis, who has written extensively on community energy infrastructures, [email protected]. She wrote this commentary for CALmatters.