California’s regional grid plan clears another hurdle

Source: Debra Kahn, E&E News reporter • Posted: Thursday, June 28, 2018

A bill to create a Western-wide electricity market is speeding through the California Legislature, despite some Democrats’ strong reservations about giving up control of the state’s progressive energy policies.

The state Senate Judiciary Committee yesterday approved by a 4-1 vote A.B. 813, a bill to begin the process of turning the state’s electricity grid operator into a regional transmission organization (RTO). The prospect has long tantalized Western utilities and regulators for its potential to encourage wind and solar development in California’s neighboring coal-heavy states. But a deal has so far eluded California and the other states due to those same political differences.

Committee Chairwoman Hannah-Beth Jackson (D) was the sole vote yesterday against the measure, which is one of outgoing Gov. Jerry Brown’s (D) top priorities. She raised concerns similar to those at last week’s hearing, where the Senate Energy, Utilities and Communications Committee approved the bill 6-1 despite worries that creating a regional market could open the state’s carbon policies to federal scrutiny under the Trump administration (Energywire, June 20).

“It is so critical, it seems to me, that we maintain that protection against an administration that has made a commitment to doing everything possible to undermine the values in this state and our energy policies in particular,” she said. “The concern is if we lose this one last layer of protection, that we are going to find ourselves having spent years and decades on behalf of the people of California trying to create a renewable energy future that will be eviscerated.”

The bill now heads to the Senate Appropriations Committee before its final vote on the Senate floor. It may be amended to resolve disagreements between wind interests and organized labor, which are on opposing sides of a provision that would preserve in-state requirements for renewable power purchases. Allowing electricity from outside the California Independent System Operator’s current boundaries to satisfy California’s 50 percent renewables target would send 110,000 jobs out of the state from 2020 to 2030, according to state estimates.

“It’ll be a jailbreak,” said Marc Joseph, a lawyer representing the Coalition of California Utility Employees.

The bill could also become part of a wider deal to address other current issues facing the state’s investor-owned utilities. Pacific Gas and Electric Co. has been pushing lawmakers to protect it from massive potential liabilities from last year’s wildfires by reforming the state’s legal doctrine of “inverse condemnation,” which requires not only the government but public and private utilities to pay for the taking of private property (Energywire, June 15). And at the California Public Utilities Commission, regulators are revising the monthly fixed charge that customers who depart investor-owned utilities for local electricity suppliers must pay (Energywire, June 25).

Last year, the grid regionalization discussion expanded to include language directing utilities to procure renewable energy faster than needed in order to take advantage of federal tax credits for wind and solar. While solar interests are backing A.B. 813, they would still like to see a broader agreement emerge.

“We think that we need to see leadership in Sacramento on the utility wildfire issue and taking the concerns over the utilities’ financial viability seriously, and we think there needs to be a real focus not just on addressing their having a stable utility infrastructure in the state — that’s what all ratepayers need — but also ensuring that continued procurement of renewables takes place,” said Rick Umoff, California director for the Solar Energy Industries Association.