Pro-Con: Does a Western regional electric grid make sense?

By Mark Toney

Mark Toney is executive director of The Utility Reform Network, a California consumer advocacy group, mtoney@turn.org. He wrote this commentary for CALmatters.

The momentum that a risky and ill-timed regional energy grid proposal has gathered in the legislature is disconcerting. As consumer advocates we have not forgotten how spectacularly deregulation, the Enron-sponsored energy law approved in 1996, failed.

Nor will we forget how the Federal Energy Regulatory Commission ignored Gov. Gray Davis’ pleas for relief and let greedy energy companies gouge California. Legislators who don’t remember should read up, as they appear poised to go down the same road again.

At issue is Assembly Bill 813, a misguided bill sponsored by Assemblyman Chris Holden of Pasadena intended to set the stage for expanding California’s electricity grid and integrate it with surrounding states.

Proponents of AB 813 say it will lower the cost of power and broaden the use of renewable energy. But it also could backfire, badly, lessening California’s control over our energy choices, costing the state thousands of clean energy jobs and potentially increasing consumers’ monthly bills.

Even supporters of the regional grid acknowledge it will be an in-state job killer. The California ISO, which backs regionalization, has predicted the state will forfeit 110,000 construction jobs expected to be generated under the current system because regional expansion will end incentives that encourage the in-state development of renewable energy.

A regional system also could open consumers to higher rates because of revised rules for cost allocation. Californians could be forced, for example, to pay billions for out-of-state projects at a time when customers here are already struggling to pay the full costs of the existing grid, plus new fire safety programs. And under AB 813, the Legislature would have no authority to stop unnecessary or overpriced proposals, since the bill would eliminate state review of such rate hikes.

If AB 813 passes, the expanded regional ISO would need no approval from the California Legislature to jettison its current governing board (appointed by the governor and subject to Senate confirmation) and to proceed with changes to entice other western utilities to join. In fact, many details of regional governance have yet to be worked out and would occur only after the Legislature gives its final approval. Such changes, incidentally, must be approved by FERC, which at the moment is dominated by Trump administration appointees.

The Trump majority has already devalued renewable resources and refused to consider emissions impacts in the approval of new gas pipelines. The next rumored appointee was previously in charge of an administration proposal to use wholesale markets to bail out coal plants. A regional grid could make California vulnerable to Trump administration efforts to subsidize coal-fired generation through wholesale markets, and undermine protections for state environmental policies.

While enhanced coordination across the western states may be desirable, it can be achieved without giving away the store. The form of regional expansion anticipated in AB 813 would likely result in less new renewable energy development, greater reliance on out-of-state resources and fewer environmental and public health benefits for California. And if things so south, there’s no off-ramp.

Consumers picked up the tab for the deregulation disaster. FERC allowed Enron and other corporations to gouge consumers as utilities and the state passed on additional costs to beleaguered customers.

It’s taken us years to recover from the last big legislative blunder, and we can’t afford another one.By Len Hering

Rear Admiral Leendert “Len” Hering is a member of the Center for Climate and Security’s Advisory Board, lrhering@aol.com. He wrote this commentary for CALmatters.

They say no man is an island. And that goes for states, too, especially when it comes to energy.

In the final weeks of the legislative session, legislators have the opportunity to end the isolation that limits California’s ability to quickly and affordably deploy renewable energy. They need to pass Assembly Bill 813.

The legislation by Assemblyman Chris Holden, a Pasadena Democrat, would help create a regional grid that spans the West and shape our nation’s energy future for the next century.

In my 32 years in the U.S. Navy, I saw first-hand the value of renewable energy. It saves money and provides energy security – ultimately saving American lives.

For the past five years, I’ve dedicated myself to accelerating the transition to a world powered by clean energy as president and executive director for the Center for Sustainable Energy. We’re engaged in a race against time, which is why a regional grid is so critical.

Right now, Californians’ clean energy options are essentially limited to what we can generate by ourselves here in California. But if the wind is blowing in Texas or Wyoming before the sun rises in California, why shouldn’t we be able to access that clean power?

If it’s sunny or windy in California and our solar and wind farms are generating extra energy, why shouldn’t we sell it across the West?

An expanded grid would create opportunities to generate, sell, buy and gain access to clean energy from anywhere in the region. That would force coal and other dirty fuels to compete with the vast store of wind and solar energy.

Renewable technology costs continue to plummet. We will win that competition, to the benefit of all of us.

I have seen firsthand how generating your own energy and conserving energy can save serious money. At Naval Base San Diego, energy was one of our biggest cost centers. So we reduced consumption by 40 percent in part by introducing renewable energy.

We didn’t do this because of some tree-hugging sense that it was the right thing to do. I’m a conservative whose academic background is in business and science.

My job was to save money so the Navy could better spend that money on its core mission. Renewable energy helped us do exactly that, and it helped bolster our national security.

Oil trades on a global market controlled by countries that do not have our best interests at heart. Our enemies’ oil reserves are 70 times greater than ours. They can manipulate the oil market in ways that could cripple our economy.  Deploying alternatives, including electricity from renewable energy, makes us all more secure.

And then there’s clean energy economics. When I was a vice president at the University of San Diego, we installed the nation’s largest private university-based photovoltaic system and saved hundreds of thousands of dollars in our first year.

We can spread those same types of savings across the state by establishing a Western grid, the single most cost-effective method we have to bring more renewables online, more quickly, while making electricity in California cheaper.

The future of energy is renewable. The question is how fast will we get there? The longer it takes us to move to a 100 percent clean energy future, the more our grandchildren will suffer. A Western regional grid will accelerate that future.

Remaking the energy market in the West is a huge task. But bills that would regionalize our grid stall for no good reason. Our leaders need to embrace a diverse and affordable clean energy future that gets us off our energy island and into a regional system. Spend the time to put in place the governance necessary to ensure our goals are attained and everyone benefits.