An Open Letter to Senator Mike McGuire about PG&E’s Power

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Dear Senator McGuire,

Across the nation, people are gathering in 25 different locations during this “week of action” to protest utility rate hikes and policies that are slowing down the conversion to clean energy. We have entrusted utilities with exclusive control of a vast infrastructure and compensate them with billions of dollars every year. Now we need their expertise to replace carbon-intensive fossil fuels with renewable zero-carbon energy. They’re working on it, but we urgently need them to do it faster and more affordably.

One of those demonstrations is taking place in front of PG&E headquarters in Oakland. PG&E’s profits increased by 28% in the last year even though the company paid out billions of dollars in fines for causing wildfires of record-breaking deadliness. Apparently, PG&E is not hurting for money, yet it has hiked its rates even higher and instituted unpopular policies such as adding an uncapped fixed charge to all of its customers’ bills. It has also slashed its reimbursement rates for distributed solar electricity.

PG&E does an enormously difficult job. Besides supplying everyone with electricity it coordinates with multiple agencies to maintain, manage, and develop the transmission and distribution grids in its area. This job is only getting more complex as new sources of intermittent renewable energy come on line. In March of this year, the California Public Utilities Commission approved new interconnection rules that will enhance the flexibility of lower-voltage grids to receive power from differently scaled solar and battery installations. This option, called Limited Generation Profile, will make distributed solar power an unmitigated asset.

Yet just two months after this big step in the right direction, the CPUC gave in to pressure from the utilities in the state and de-incentivized community solar projects, which are optimum for the Limited Generation Profile. Many legislators were stunned because California had passed AB 2316 less than two years ago, a bill you voted for to help people, including low income people, invest in solar projects in their neighborhoods. This extremely unpopular decision was the third blow that the commission and utilities have struck against distributed solar in less than two years. The first two drastically reduced reimbursement for rooftop solar for households and then for apartment buildings, schools, and other multi-meter customers.

Such contradictory maneuvers seem to portray a corporation that is torn between its responsibility to transform the grid and a fiduciary obligation to enrich its shareholders. (Publicly owned utilities don’t have this conflict because they aren’t set up to make a profit.) The purpose of the CPUC is to prevent investor-owned utilities from abusing its monopoly powers to make an unreasonable profit. How well it succeeds is another matter.

This is where our political leaders such as yourself come in. When asked about your top priorities two years ago, you named climate change first. You’ve also been unafraid to take on PG&E in order to ensure the safety and well-being of your constituents. The legislature already plays a role along with the CPUC to align the operation of utilities to the public good. Yet bolder measures are needed—measures that change the fundamentals of how utilities make money. Hawaii recently provided an exciting example when it unlinked utility profit from the sheer amount of power sold. This reform encourages conservation, efficiency, demand response programs and lower bills. It reduces CO2 emissions.

Much of utilities’ profits are based on their capital expenditures, which incentivizes the construction of more physical infrastructure, whether or not it’s necessary for our priorities of clean energy and affordable rates. What if PG&E’s profits were tagged to clean energy and affordable rates instead? Rewarding performance instead of spending is not an entirely new idea, but there is far to go in implementing it.

Though investor-owned utilities need to make a healthy profit (but perhaps not so healthy that they pay their CEO $16+ million like PG&E did last year), they must also provide us with reasonably priced clean, renewable energy. That is the message that thousands of climate and utility justice advocates across the nation this week are sending.. We’re telling utilities, like PG&E, that they have a huge responsibility to lead us, all of us, into the clean energy future. They are capable of doing better. California’s legislature has an even larger responsibility to make sure they heed the call.

Martha Walden for 350 Humboldt