CPUC released a white paper week before last on rising electricity rates showing that utilities charged California ratepayers $7.5 billion in transmission costs from 2016-2019 (page 39). In 2021, transmission expenses are up 38% statewide, and 66% in PG&E territory alone. Incredibly, 60% of these costs were “self-approved,” a term that seems to be new even to the regulators.

Ever heard of the Averch-Johnson effect (see page 24) It comes from the fact that utilities are incentivized to make large infrastructure investments (e.g. transmission) to drive an increase in their rate base and therefore, their profits. Some centralized infrastructure investments are important, and some are especially urgent given the recent wildfires. However, without proper government oversight, an unchecked Averich-Johnson effect turns ratepayers into cash machines and utilities into engorged profit centers. From 2006-2017, PG&E made $13.6 billion in profits and paid $8.6 billion in dividends to their shareholders, and yet the grid has never been more unreliable or unsafe.

What does this have to do with Net Metering (the policy that allows consumers to spin the meter backwards for a bill credit that makes solar cost effective)? Net Metering breaks this cycle of utilities taking advantage of ratepayers.  When consumers, be they homeowners, businesses, churches, or schools invest in rooftop solar, hey reduce the need to build transmission lines. These “non-wire alternatives” are good for all ratepayers (and good for resiliency), but they cut into utility profits. Utilities don’t like that, so they fight against Net Metering. 

Yet, no policy is more important to making solar affordable and accessible to all Californians. Over half of California’s rooftop solar market is in middle and working class neighborhoods. Taking net metering away would put the sun out of reach for most consumers.

But utilities have so much money, they hire economists and consultants to churn out report after report framing the rooftop solar NEM debate around a flawed “cost-shift” argument. At their core, these reports assume ballooning transmission and infrastructure costs are a given and, therefore, they argue, we must turn our attention to who’s paying for those costs and who isn’t. They never stop to ask how we can reduce infrastructure costs to save everyone money. Instead, they point fingers at solar consumers, claiming that they are not properly hooked up to the utility cash machine. Equity, as they define it, is everyone paying into the utility cash machine without any way to unplug it. Ergo, the logic continues, California should stop consumers from building their own solar roofs and, instead, focus exclusively on large-scale power plants that require more transmission lines.

What’s most troubling is that safety and reliability, the main purpose of those infrastructure investments, is no longer in focus. If it were, consumer solar and storage would be doubly valuable: reducing expensive infrastructure costs and helping keep the lights on for everyone. 

How do we get off this negative cycle of rising costs and lack of reliability? Leadership.

Governor Newsom cares about keeping the lights on in California. He cares about those who can least afford to live in this state and pay for things like high energy bills. And he understands that distributed generation is the ticket to safety, reliability and affordability. But we need him to step in and defend consumer solar. So, let’s urge him to stand up to the powerful utilities, put a check on their cash machine, and help everyday consumers keep the lights on through local solar and storage. Sign the Save California Solar petition today!