Good morning, California. 

I just don’t think it’s a viable alternative at this time.”—Sen. Bill Dodd, a Napa Democrat, on the possibility of letting PG&E pay off its 2018 fire liability over the next few decades, as a Dodd bill last year let it to do with its liability from 2017. 

California’s brave new world of power delivery

PG&E's problems are just one wrinkle in the new energy landscape.

A profound change is underway regarding power in California: how it’s generated, distributed and, increasingly, who’s in charge.

In the first of a three-part series, “Frayed Wires,” CALmatters’ Julie Cart details what few of us ever think about—the electrical grid. It’s especially relevant as Pacific Gas & Electric Co., the state’s largest utility, continues its slide into bankruptcy.

Cart writes: “California is casting off fossil fuels to become something that doesn’t yet exist: a fully electrified state of 40 million people.”

Policies are in place requiring a rush of energy from renewable sources such as the sun and wind and calling for millions of electric cars that will need charging—changes that will tax a system already fragile, unstable and increasingly vulnerable to outside forces.

  • Complicating the state’s task, PG&E has announced it may go into bankruptcy by Jan. 29, as it faces crippling liabilities from wildfires. But reshaping of California’s energy future goes far beyond the woes of a single company.

Mark Rothleder of the California Independent System Operator, which oversees the grid and is responsible for making sure lights stay on, puts it this way:

We’re in the middle of change, and because of that … you run the risk of missing something. We don’t have the luxury of just being able to miss it. Because if we miss it, the lights go off. That’s why we look ahead, study what this change is going to do and how do we maintain reliability.”

About PG&E’s nuke

As PG&E mulls bankruptcy, what happens to Diablo Canyon?

The decommissioning of California’s last operating nuclear power plant, Diablo Canyon in outside San Luis Obispo, could be complicated by Pacific Gas & Electric Co.’s plan to head into bankruptcy, The San Luis Obispo Tribune reported.

  • PG&E announced plans in 2016 to shutter the nuke by 2025. It sits on 900 acres above the Pacific Ocean, atop an earthquake fault. It also provides enough electricity to power 1.7 million homes, roughly 20 percent of its electricity.

The utility promises to replace the electricity with clean renewable energy. It won’t come cheap.

  • The utility last month petitioned the California Public Utilities Commission for $1.6 million from ratepayers to fund the shutdown.

In 2018, Sen. Bill Monning, a Democrat who represents the area, carried legislation that aims to pass to all PG&E ratepayers costs associated with covering the loss of property tax revenue by schools and local governments, and job retraining.

  • Ratepayers would pay an extra 8-17 cents on the bills to fund the legislation.

Bankruptcy should have no effect on that legislation, he told me. On the chance it does, “I am going to fight like hell to protect that the safe decommissioning of Diablo Canyon.”

Mrs. Guzman's 6-hour commute

As Newsom signs housing order, the struggle is real.

Gov. Gavin Newsom traveled to California’s housing crisis central: the Silicon Valley. There, he and San Jose Mayor Sam Liccardo heard Nuemi Guzman, a 42-year-old mother of three, describe her commute to her job as a legal assistant in San Jose from her home in Los Banos.

The Mercury News: “On Fridays, the return commute can sometimes take up to six hours, Guzman said, eliciting shocked expressions from Newsom and Liccardo. ‘Oh wow,’ Liccardo muttered. 

Newsom signed an executive order opening the way for the state to inventory surplus property and lease it for housing, particularly in and near urban cores—and to make progress this year.

  • The order makes clear what Newsom views as a major impediment to greater development: California environmental law and local zoning.

The order: “[R]estrictive zoning ordinances and land use policies at the local level are a major cause of the shortfall between California’s housing needs and the available supply of housing. … [L]ocal zoning ordinances do not govern the use of state property.”  

In other words, people who have state property in their backyards may soon have neighbors.

About Newsom’s surplus-plus

Newsom has a $21.6 billion-plus surplus.

Eight years ago, Jerry Brown confronted a $27 billion deficit, a hole so deep that it consumed much of his first years in office.

  • So imagine Gavin Newsom’s good fortune: a $21.6 billion-plus surplus. Unlike Brown, who turned to legislators and later voters to raise taxes, Newsom and the current Legislature face a quandary about how to spend the expected windfall.

Newsom proposes to spend some to satiate liberal desires. But he’s using the bulk on one-time expenses.

  • CALmatters’ Judy Lin digs deep into how the new governor intends to divvy up the surplus. To get the details, click here.

A new leader for state Senate GOP.

New Senate Republican Leader Shannon Grove.

State Senate Republicans elevated as their new leader Sen. Shannon Grove, a Bakersfield lawmaker who in 2012 proposed making the Legislature part-time.

  • Grove, 53, served three terms in the Assembly ending in 2016, took two years off, and won a Senate seat in November. Her initiative would have had legislators sit three months a year and be paid $18,000. As minority leader, she’ll earn $127,026 a year.
  • She is also an ally of U.S. House Minority Leader Kevin McCarthy. Her ascent further focuses the GOP’s power in the Bakersfield area.

Grove takes over in March from the current leader, Sen. Pat Bates of Orange County. Senate Republicans lost several seats in November, and hold only 11 of 40 Senate seats.

Commentary at CALmatters

Gutting CEQA won't fix housing, Ashley Werner says.

Ashley Werner, Leadership Counsel for Justice and Accountability: As legislators resume discussions regarding policy solutions, we must be clear: California’s environmental regulations did not cause the housing crisis and eviscerating the California Environmental Quality Act would harm disadvantaged communities.

Dan Walters, CALmatters: While Gov. Gavin Newsom, unlike Jerry Brown, says he will try to make tax reform happen, he also may need a net increase in revenues to finance the promises he’s made on health care, early childhood education and other expensive entitlements.

Erratum: Yesterday’s What Matters prematurely linked to today’s Dan Walters column on taxes. Try today’s link.

Please email or call with tips, suggestions and insights, [email protected]org, 916.201.6281. Shawn Hubler, [email protected]edits WhatMatters. Thanks for reading, please tell a friend and sign up here.

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