By Tim Hunt
Sticker shock in the Bay AreaUploaded: Mar 23, 2021
We welcomed new tenants into our in-law apartment over the weekend and talked about California sticker shock.
They relocated from Louisville, KY and were stunned to see what Californians pay for gasoline. We pay almost $1.50 more than the national average thanks to the state’s unique gasoline formula and gas taxes of almost $1 per gallon, nearly twice the national average. And, despite those high taxes, our roads are in terrible condition (carefully check out the onramp to southbound 680 from I-580. It’s been patched and the patches are falling apart.)
And then consider electricity. Gov. Gavin Newsom has decreed that he will end the sale of gasoline powered vehicles in favor of an all-electric fleet by 2035. The rapid shift to heavily subsidized green power (solar and wind) has shifted the dynamic of unreliable power from afternoon to 4-9 p.m. Remember last summer’s rolling blackouts that demonstrated how unreliable the grid has become with the embrace of green power and no back-up from natural gas-powered plants.
Throw in lack of maintenance on PG&E lines—for which the Public Utilities Commission needs to own as well as the utility—and we are rolling the dice with California’s economic future. Stable and reasonably priced power is critical to both residential and industrial users. California also has some of the most anti-business policies in the country.
A recent report from the energy institute at UC Berkeley’s Haas School of Business and the nonprofit think tank Next 10 warns pricing for electricity threatens the shift to all electric (state law bans natural gas in new residential construction).
A San Francisco Chronicle report about the study noted that PG&E’s rates are 80% higher than the national average. Severin Borenstein, a Cal energy economist, said part of the problem is the state lays costs unrelated to the production and distribution of electricity on the utilities and thus the ratepayers. He cited programs to reduce wildfire risk as well as subsidies for other programs.
The economist suggests that some of these costs could be paid from the state general fund or the utilities could add a fees to bills that would vary according to income level. The higher prices hit low-income families much harder than wealthier people.
The Chronicle quoted Borenstein saying, “At the same time, we’re going to have rates that are going to be so high that it will be a huge discouragement to using electricity for things that we need people to adopt if we’re going to decarbonize the economy.”
Consider also the broader issues and check out this piece by Marvin L. Covault, a retired Army lieutenant colonel. He raises many excellent questions that have not been answered. Consider that the arms of those huge windmills in the Altamont Pass and elsewhere in the country have an estimated 20-year lifespan and there are not considered recyclable. They’re destined for land fills.
It’s a long, thoughtful read. Here’s the link: questions" />