IBEW Local 1245 has been actively involved in California’s energy and environmental policies for many years. Our union provided critical and influential support for Senate Bill 2, which established the 33% Renewable Portfolio Standard (RPS) requirements, as well as Senate Bill 350, which increased the RPS to 50%. We were also involved in the passage of AB 32 and SB 32, which are California’s landmark greenhouse gas (GHG) emissions reductions policies that were passed in 2006 and 2016 respectively.
We strongly support the decarbonization of California’s energy system, as well as other sectors. Our members have already built hundreds of projects needed to achieve these clean energy goals. But more is needed, and we must design the next steps correctly to succeed, since these next steps mean redesigning our grid.
In 2017, Senator Kevin De Leon introduced Senate Bill 100, a complex energy proposal with many facets. Local 1245 leadership met with Senator De Leon early in the process to discuss the bill and offer suggestions to improve it. We urged De Leon to focus on protecting the electric distribution system as it is transformed by new technologies and equipment, as well as include other energy resources that reduce GHG emissions and encourage utility responsibility for implementation — and therefore, 1245 members’ work.
While SB 100 contained some solid policy ideas, the final bill fell short in terms of meeting the needs of state during this period of transition. There are several key amendments that need to be made for the bill to pass muster in our eyes.
DERs and DERMs
First, it’s important to note that California’s existing clean energy policies are working. The State will have 33% of its power from RPS qualified resources by 2019, one year early. But to move further towards the 50% RPS goal, the electric distribution system must be transformed by new technologies and equipment, known as Distributive Energy Resources (DERs).
DERs will lead to substantial changes in the utility industry. To ensure customer and worker safety, as well as grid reliability, during this transition, we are calling on our Senators to amend SB 100 to include language to extend existing state law and regulatory authority to new Distributive Energy Resources and Distributive Energy Resource Management Systems (DERMs) that are integrated into the grid. This includes requiring utilities to use this new technology, as well as ensuring these technology companies can help repair the grid if their new tech or equipment fails. The State has the right and responsibility to require that any third-party companies who are working on California’s grid, or connecting their equipment directly to the grid, are both accountable and reliable.
Accountability and Oversight
From firestorms to gale-force winds to torrential rains and massive floods, it’s clear that climate change is resulting in increasingly severe and extreme weather events, and the electric grid must be more resilient than ever before. Investor-owned utilities will need to take advantage of new technology and partner with technology companies in order to incorporate them into our existing energy structure. But we feel strongly that the utility must continue to own, operate and repair critical equipment, as they are the ones who are held accountable by the state Public Utilities Commission and other governing bodies. For this reason, we take issue with the fact that SB 100 would permit technology companies to install this technology without regulatory oversight.
And when these severe weather events devastate our communities, Californians count on the thousands of highly skilled and trained utility workers to respond and restore electric service, quickly and safely. But in its current form, SB 100 would not ensure that our members and other utility workers would be able to do their jobs when people need them the most.
Community Choice Aggregation (CCA)
The explosive growth of CCAs in California – and the fact that investor-owned utilities have already purchased the energy that they need — means that the CCAs will be doing almost all the future power procurement. Yet they do not have the credit ratings necessary to sign large Power Purchase Agreements, as the utilities do. If these CCAs are not able to purchase clean power through PPAs, it will be very difficult for California to implement increased renewable requirements and reach its clean-energy goals. SB 100 needs to provide a procurement system that can actually buy the new resources we need.
Additionally, many CCAs feel that they don’t have to play by the same rules as the utilities. They believe that are not required to comply with the state’s Integrated Resource Plan process — which is specifically designed to facilitate the integration of large quantities of renewable energy into the grid – and are taking their case up with the CPUC. To increase renewable requirements, SB 100 needs to resolve this issue. California can’t achieve a zero-carbon future if the entities that will be serving many of its customers insist on exempting themselves from the state-wide plan.
SB 100 also failed to provide the direction needed to make the best use of California’s two biggest renewable energy resources.
California has the best geothermal resources in the U.S. We will need to use this baseload power to achieve a zero-carbon energy system. California needs a system to procure geothermal resources — yet SB 100 has no language to include geothermal at all. And as California adds more and more solar resources to our system, we need large scale bulk energy storage. Yet there is no program in SB 100 to get that storage built.
The other side of the renewable equation is the continued integration of highly intermittent solar and wind generation resources. California continues to add this power to the grid, but without the immediate and continuous support of thousands of megawatts of natural gas-fired power plants, California cannot add new solar and wind power to our grid. Yet SB 100 fails to address the essential, continued operation of these gas plants, nor does it contain a plan for the orderly retirement of those plants, so that California can retire those that are unnecessary and keep operating those that must support the large amount of solar and wind power Californians use every day.
This problem of orderly and cost-effective operation and retirement of natural gas plants impacts both the investor-owned utilities (IOUs) and publicly owned utilities (POUs). In fact, the POUs have more of these plants with substantial outstanding debt, and SB 100 must contain some kind of plan to address this debt while also requiring the POUs to reduce the use of these plants over time.
Inequitable Cost Shifting
As a direct result of the California’s effort to reduce carbon emissions in the electrical system, the state has created two major and inequitable shifting of costs from one group of electricity customers to others.
The Net Energy Metering system for rooftop solar is currently costing non-participating customers hundreds of millions of dollars every year. The majority of these customers are low income, fixed income and renters. The CPUC has not fixed this problem, which only continues to get worse with every rooftop solar system installed.
The CPUC’s system for protecting the remaining bundled (IOU) customers when a new CCA forms is broken. Because the CCA customers are not being charged the full costs – which amounts to hundreds of millions of dollars — for future power that the IOUs have already purchased, these costs are being shifted every year to the remaining IOU customers.
SB 100 failed to rectify these two cost shifting issues, which means that if it were enacted in its current form, it would ensure even more of the cost burden placed on the customers who did nothing to deserve it.
Fundamentally, all changes to the electric grid must benefit all Californians, as well as meet the State’s clean energy goals. These changes should not provide a financial windfall to a few companies, nor should these changes shift costs to favor one group of electric customers over another. Finally, we need to ensure the electric grid continues to operate in a safe manner for the customers it serves and utility workers that build and maintain it. The final version of SB 100 that came to the Senate in the fall of 2017 contained none of these protections, leaving us with no choice but to oppose and ultimately prevent the bill from moving forward.
We anticipate that SB 100 will come up again in the Spring, at which point we will embrace the opportunity to work with our representatives in Sacramento on both sides of the aisle to ensure that these key issues are addressed before the bill is brought up for a full vote.
–Hunter Stern, IBEW 1245 Business Rep