For Immediate Release
Utility Tax Proposal Will Increase Risk of Blackouts and Hurt Working Families Most
Monopoly Utilities and their Allies admit to CPUC That They Never Considered Increased Risk of Blackouts from their Proposal
Stockton, CA– When proposing their fixed-rate utility tax, California’s IOUs and their allies failed to consider an increased risk of blackouts across the state’s electricity grid, new documents filed at the California Public Utilities Commission (CPUC) have revealed. If the CPUC adopts proposals put forward by PG&E, SDG&E, and SCE, California’s grid will become less reliable as energy hogs will take advantage of lower volumetric rates, which will increase the risk of blackouts.
Investor Owned Utilities (IOUs) and their allies, the Natural Resources Defense Council (NRDC), and the Utility Reform Network (TURN), admitted in discovery, meaning they were forced to tell the truth, that they had not considered how lower volumetric rates will “increase the summer net peak demands that California has struggled to meet in recent years,” according to rebuttal testimony prepared by Tom Beach on behalf of the Solar Energy Industries Association (page 5).
Specifically, NRDC, TURN, and the IOUs pointed to a price elasticity analysis from the Energy Information Agency, which found reducing volumetric rates will increase residential summer peak demand by 3.4% immediately and 13-26% over time. This 3.4% is equivalent to 575-1000 megawatts increase overnight, which is less than the margin of supply that California saw on September 6, 2022. That means if this policy had been in effect last year, Californians would have experienced rolling blackouts.
“My community has already suffered too many blackouts. Why are they making us pay even more for electricity simply to make the system less reliable? It makes no sense,” said Esperanza Vielma, Executive Director of the Environmental Justice Coalition for Water. “Blackouts are devastating to working communities. The old and the young suffer most. In the Central Valley temperatures often exceed 100 degrees in the summer. To not take this basic sustainability into account when suggesting a fixed-rate tax is not just irresponsible, but immoral.”
“California’s utilities and their allies don’t seem to understand the climate challenges of working communities,” said Pastor Ambrose Carrol, Executive Director of Green the Church. “People in our most vulnerable communities have already suffered most from wildfires and blackouts. Now the IOUs want to make the problem worse in the name of the almighty dollar. That is wrong on so many levels.”
These unjust and deceptive fixed fee proposals were inserted to a larger climate bill (AB 205) in the last 72 hours of the 2002 legislative session and signed into law by Governor Gavin Newsom with no public awareness, no hearings and no public debate. Many legislators were unaware the provision was in the bill.
The latest criticism of the Utility Tax comes on the heels of an analysis by the Clean Coalition, which found that the Utility Tax proposals made by the IOUs, NRDC/TURN and the Public Advocate would increase electricity bills for millions of working and middle class households. The Clean Coalition outlined how bills would rise by $300 or more per year for those living in apartments, condos and homes using lower than average energy, while subsidizing lower bills for the largest energy users—who also tend to be the wealthiest.
The CPUC is expected to make a final decision in this proceeding in June 2024.
About CEEE
The Coalition for Environmental Equity and Economics (CEEE) is a coalition of three powerful environmental justice groups in California. Together, Green the Church, Environmental Justice Coalition for Water, and Federation of Clubs and Associations of Michoacanos in North America believe in and advocate for community power-building, environmental and economic justice, social equity, and energy democracy. When wall street utilities weaponize economic and social equity issues to manipulate public sentiment, we fight back. Learn more at ceeetruth.org.
Media Contact, Leo Briones • Info@ceeetruth.org • (323) 574-2524