September 15, 2018
In April, civil-rights groups sued to stop some of California’s policies designed to address climate change. Then on Monday, California governor Jerry Brown signed into law SB 100, which requires the state’s utilities to obtain all their electricity from carbon-free sources by 2045. Before signing the bill, Brown said the legislation was “sending a message to California and to the world that we’re going to meet the Paris agreement.” In fact, it will only increase the hardships that California’s climate policy imposes on the poor, as detailed in the lawsuit.
High electricity prices should be a concern for California policymakers, since electric rates in the state are already 60 percent higher than those in the rest of the country. According to a recent study by the Berkeley-based think tank Environmental Progress, between 2011 and 2017 California’s electricity rates rose more than five times as fast as those in the rest of the U.S. SB 100 will mean even higher electricity prices for Californians.
SB 100 requires the state to get 60 percent of its electricity from renewables by 2045, and the other 40 percent from “zero-carbon” sources. Proponents of the measure say those sources could include nuclear, or perhaps power plants that have carbon capture and sequestration systems. Neither approach seems very promising, given that California closed the San Onofre nuclear plant in 2013 and will close the Diablo Canyon plant by 2025. Carbon capture and sequestration has been tried at a handful of locations but has yet to be proven affordable on a large scale.
Furthermore, it’s clear that the more California relies on renewables, the more it will have to deploy large amounts of electricity storage. Those storage systems will have to be large enough to handle massive seasonal fluctuations in wind and solar output. (Wind-energy and solar-energy production in California is roughly three times as great during the summer months as it is in the winter.) The Clean Air Task Force, a Boston-based energy-policy think tank, was one of several environmental groups that supported the passage of SB 100 and the 60 percent–renewable mandate. If California attempts to push past the 60 percent threshold, the storage challenge becomes more daunting. For instance, Clean Air Task Force analysts have calculated that if California attempts to get 80 percent of its electricity from renewables, the state will require about 9.6 terawatt-hours of storage. This would require about 500 million Tesla Powerwalls, or roughly 15 Powerwalls for every resident. A full 100 percent–renewable electricity mandate would require some 36.3 terawatt-hours of storage, or about 60 Powerwalls for every resident of California.
Increasing reliance on renewable energy also means increasing land-use conflicts. Since 2015, more than 200 government entities from Maine to California have voted to reject or restrict the encroachment of wind-energy projects. In 2015 the Los Angeles County Board of Supervisors voted unanimously in favor of an ordinance banning large wind turbines in the county’s unincorporated areas. Three other California counties — San Diego, Solano, and Inyo — have also passed restrictions on Big Wind. Last year, the head of the California Wind Energy Association lamented that “we’re facing restrictions like that all around the state,” adding that “it’s pretty bleak in terms of the potential for new development.” The result of the anti-wind restrictions can be seen in the numbers. Last year, California had about 5,600 megawatts of installed wind capacity. That’s roughly 150 megawatts less than what the state had back in 2013.
The land-use problem facing Big Wind in California is the same throughout the rest of the U.S. and Europe: People in cities like the idea of wind turbines. People in rural areas increasingly don’t want anything to do with them. Those rural landowners don’t want to see the red blinking lights atop those massive turbines, all night, every night, for the rest of their lives. Nor do they want to be subjected to the harmful noise — both audible and inaudible — that they produce.
Even before SB 100 passed, though, California’s leaders were already facing a legal backlash from minority leaders over the high cost of the state’s climate policies. On April 27, The Two Hundred, a coalition of civil-rights leaders, filed a lawsuit in state court against the California Air Resources Board, seeking an injunction against some of the state’s carbon dioxide–reduction rules. The 102-page lawsuit declares that California’s “reputation as a global climate leader is built on the state’s dual claims of substantially reducing greenhouse gas emissions while simultaneously enjoying a thriving economy. Neither claim is true.”
The gist of the lawsuit is this: California’s high housing, transportation, and energy costs are discriminatory because they are a regressive tax on the poor. The suit claims that the state’s climate laws violate the Fair Employment and Housing Act because CARB’s new greenhouse-gas-emissions rules on housing units in the state “have a disparate negative impact on minority communities and are discriminatory against minority communities and their members.” The suit also claims the state’s climate laws are illegal under the Federal Housing Act, again because their effect is felt predominantly by minority communities. It also makes a constitutional claim that minorities are being denied equal protection under the law because California’s climate regulations are making affordable housing unavailable to them.
The lawsuit, which Michael Shellenberger of Environmental Progress spotlighted in his recent Forbes column, points outpoints out that since 2007, “California has had the highest poverty rate in the country, over 8 million people living below the US Census Bureau poverty line when housing costs are taken into account.” The lawsuit claims that CARB has “ignored” the state’s “modest scale of greenhouse gas reductions, as well as the highly regressive costs imposed on current state residents by CARB’s climate programs.”
On Thursday I spoke to John Gamboa, a member of The Two Hundred. He said SB 100 is merely the latest example of California politicians’ ignoring the poor and the middle class when making energy policy. “Every time they pass new regulations, the burden falls on the people who can least afford it,” he told me. “That’s the history of the environmental movement: They care more about spotted owls than brown babies.”
The lawsuit focuses largely on the state’s housing and transportation policies, but it also says that California’s climate change policies increase “the cost of transportation fuels” and “further increase electricity costs.” Those high costs, it claims, “have caused and will cause unconstitutional and unlawful disparate impacts to California’s minority populations, which now comprise a plurality of the state’s population.”
There’s simply no doubt that SB 100 will mean even higher electricity prices for Californians. A parallel can be seen in Germany, which has pledged to cut its carbon-dioxide emissions by 80 percent by 2050 and, like California, is closing its nuclear plants and pushing hard for more renewable energy. According to Agora Energiewende, a think tank that focuses on Germany’s transition toward renewables, between 2007 and 2018, residential electricity prices in Germany jumped by 50 percent. German residential customers now have some of the highest-priced electricity in Europe, about $0.37 per kilowatt-hour.
Ontario, Canada has had a similar experience. Over the past decade, Ontario closed its coal plants and implemented lucrative subsidies for renewables. The result: Between 2008 and 2016, residential electricity rates in Ontario rose 71 percent, which was more than double the average increase in the rest of Canada during that time. And rates in Ontario could rise another 40 percent by 2035. A report released by the Fraser Institute in April concluded that “soaring electricity costs in Ontario have placed a significant financial burden on the manufacturing sector and hampered its competitiveness.”
Or consider Australia, where consumers are paying some of the world’s highest electricity prices after the government imposed renewable-energy mandates and emissions caps on the electric sector. Electricity costs became such a hot issue that they played a decisive role in last month’s sacking of the country’s prime minister, Malcolm Turnbull. Among the hardest-hit regions of Australia is South Australia, where electricity rates shot up after the closure of two large coal-fired power plants. The state now gets about 40 percent of its electricity from solar and wind and power costs are roughly three times that seen by the average American.
The high cost of renewable-energy mandates was noted by a handful of California’s Democratic legislators during the debate over SB 100. “This is yet another in a laundry list of bills that are discriminatory to the people I represent,” said Adam Gray of Merced. According to the Los Angeles Times, Gray went on to say that the supporters of SB 100 were more motivated “to impress national progressives rather than poor residents in rural communities who would face higher electric bills.”
SB 100’s sponsor, state senator Kevin de León, is running for U.S. Senate in this fall’s election. When I asked Gamboa about de León, and more specifically why a Latino leader would be so supportive of a measure that could hurt low-income Latinos, he paused and let out a sigh. “I know Kevin. He has a good heart,” Gamboa said. “He got excited about getting votes from the environmental community and this was a good way to do it.”
Last month, after SB 100 passed the state assembly, de León claimed that California has “taken another great stride toward a 100 percent clean energy future.” That may be true. But California’s ratepayers, especially the poor and working class, will be the ones paying the cost of that stride.
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