In summary

The Legislature should reject Assembly Bill 1720, which would force the procurement of expensive energy resources on the backs of ratepayers.

By Michael Webster, Special to CalMatters

Michael Webster is executive director of Southern California Public Power Authority, mwebster@scppa.org.

California’s utilities have made tremendous progress in meeting aggressive clean energy goals in an affordable manner – and on an international stage. Publicly-owned utilities, which serve about 27% of the state’s electricity needs, are currently procuring more than a third of their electricity from eligible renewable resources and are on track to meet the state’s 2030 and 2045 mandates. 

Foundational to this success story is the ability of local leaders to decide what is the right combination of energy resources for their communities. With the ongoing COVID-19 crisis poised to exacerbate an already extreme affordability crisis, it is incumbent upon the California Legislature to protect communities from new, unnecessary procurement mandates. 

This includes relentless efforts by Florida-based NextEra to force California’s ratepayers to buy into their multibillion-dollar Eagle Mountain pumped hydropower storage project in Southern California’s desert. 

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They should reject Assembly Bill 1720, which would create an unprecedented state-run procurement process for energy storage, effectively usurping local decision-making that has worked so well for ratepayers. 

The publicly-owned utilities are well-positioned to meet California’s clean energy goals.  Our diverse and balanced portfolios already account for storage needs, in part because of our commitment to adopt long-duration energy storage technologies in a manner that appropriately meets the needs of our communities – not those of out-of-state special interests.

The member utilities of the Southern California Public Power Authority already have more than 2,050 megawatts of energy storage on their systems, with another 315 megawatts set to come online by the end of 2023. We are also currently considering more than 500 megawatts of additional storage – both short- and long-duration – to be online by 2025.  Beyond that, Southern California Public Power Authority members have aggressive plans for an additional 900 megawatts of energy storage in the next 10-15 years. 

Despite the proven success of the publicly-owned utilities’ planning and procurement model, the Legislature is once again considering legislation that will remove local decision-making control from publicly-owned utilities, granting unprecedented energy storage procurement authority to state agencies, seemingly for the sole purpose of ensuring the construction of new projects already deemed to be too expensive on the open market. 

Among the long-duration storage options, pumped hydropower storage has received significant attention within the Legislature in recent years. Although not without merit, this technology is very expensive, with most of the proposed projects carrying price tags in the billions of dollars.

Under the guise of promoting long-duration bulk storage, AB 1720 is the latest in a series of efforts to force the procurement of an extremely expensive energy resource on the backs of ratepayers statewide at a time when we can least afford it. 

The Legislature has been wise to reject each and every previous NextEra-backed bill seeking to force this procurement mandate, including Assembly Bill 2787 in 2018, Senate Bill 722 in 2019, and Assembly Bill 2255 this year. 

I made a series of criticisms regarding SB 772 in “We should not be forced to pay for electricity we don’t need.”  Those same criticisms are relevant to AB 1720.  Despite a new bill number and new author – the same problems remain with the price tag and unnecessary override of local decision-making.

Appropriate and cost-effective planning for California’s energy future is more vital now than it ever has been. This must be done in steady pursuit of our critical climate change goals, while ensuring that our state’s utilities can be responsible stewards of ratepayers’ limited resources.

California has been the setting for several challenging lessons on managing our energy grid.  We know the energy market is complicated, and we know that utilities must prioritize the right investments that protect ratepayers. The Legislature must carefully heed those hard-learned lessons. 

Just as previous NextEra efforts were unable to demonstrate, AB 1720 fails to sufficiently protect against higher ratepayer costs or mitigate for affordability impacts. The Legislature must recognize that California’s ratepayers must come first and should therefore reject AB 1720 immediately.  

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