Can Clean Energy Stay Affordable as Demand Goes Up?
Source: Public Policy Institute of California | By Stephanie Barton
California has some of the highest energy costs in the nation, with a range of factors driving up utility bills at a faster pace than inflation. In a recent panel moderated by KQED climate reporter Laura Klivans, experts discussed the obstacles and solutions to achieving clean and affordable energy in California. “The primary driver of the increases in electricity bills is, frankly, climate change,” said Alice Reynolds, president of the California Public Utilities Commission, “having to adjust the system to make the infrastructure safer … as well as respond to the impacts of climate change, [which includes] repairs after wildfires, dealing with extreme heat” and providing the supply to meet higher and more volatile demand. Along with higher demand during the day, Siva Gunda, vice chair of the California Energy Commission, observed that demand has lengthened across summer and winter. To meet demand for “the median of the day [and] these long tails happening because of climate change” requires investing in additional capacity. Right now, two systems must be running to maintain reliability on the grid—the legacy oil and gas system alongside the new renewable system. “When you’re paying for two systems, the cost is going to be higher.” Gunda cited an expected rise in electricity use due to building, transportation, and data centers, which will further shift the point in the day when use goes up. That timing and usage “will drive the system you need to build,” Gunda said, and recommended stabilizing regulations as California phases out refineries.
The cost to increase electrification on the grid goes into the rate base customers pay—”that [base is] the biggest part of lack of affordability,” said Adria Tinnin, director of race, equity, and legislative policy at The Utility Reform Network (TURN). Wildfire mitigation and safety make up a large portion of the base rate, which Tinnin suggested might be lowered through more cost-effective approaches such as insulating conductors rather than burying wires underground.
