Sacramento Bee: Curious death of power bill in state legislative session

Dan Walters: Power measure among casualties of California legislative session

By Dan Walters

The Sacramento Bee

Published: Sunday, Oct. 2, 2011 - 12:00 am | Page 3A

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Assembly Bill 724 was one of the odder casualties as the Legislature wound up its 2011 session on Sept. 10.
The measure would have continued a surcharge on most Californians' electricity bills, somewhere between $1 and $2 per month, totaling $400 million a year.

The "public goods" surcharge, which has been collected since 1997, finances programs to improve energy efficiency, encourage non-fossil energy sources and finance energy research.

One would think that in a Legislature dominated by liberal Democrats who frequently espouse all of those causes, AB 724 – which had broad institutional support – would have been an easy winner.

However, it attracted just 19 votes on the Senate floor, not even a majority, much less the 27-vote supermajority it required. Gov. Jerry Brown now wants the Public Utilities Commission to renew the charge itself.

What happened?

Redistricting and pre-election year jitters partially explain the outcome. Some of the six Democratic senators who backed off face potentially tough campaigns next year, including a couple who hope to move up to Congress. They clearly didn't want to be accused of raising consumers' electric bills in the midst of a severe recession.

Some infighting over how the money would be spent also contributed to the defeat of AB 724, as did the spectacular, perhaps scandalous, bankruptcy of Solyndra, a solar power company that has received federal and state subsidies. But the rejection also reflected an awakening of consciousness that not only is California suffering economically, but that its cost structure hurts competitiveness.

A buck or two a month may not be much, but Californians are already paying some of the nation's highest electric power rates.

According to the U.S. Energy Information Administration, California's average retail electric rate of 13.24 cents per kilowatt-hour is the ninth highest in the nation.

It's roughly 50 percent more than average, more than twice as high as those with the lowest rates, such as 6.08 cents in Wyoming, and markedly higher than those of competing states, such as the 9.86 cents in Texas.
Economically, this is no small matter. California's residential, commercial and industrial power users are shelling out about $35 billion for electric power each year.

More importantly, it's evident that our power bills will continue to rise as the state, under legislation adopted earlier in the year, shifts to generating 33 percent of its power from "renewable" sources by 2020.

That decree may make California a leader in curbing greenhouse gases, but it will – despite blithe assurances from politicians – not be painless.

Carbon-free power will cost more and will be another negative factor in attracting the job-creating investment we so desperately need.