California Going Full Commie
California Going Full Commie: ‘Designing Electricity Rates for An Equitable Energy Transition’
Income-based utility billing is the latest assault on the productive in California
By Katy Grimes, April 16, 2023
Southern California Edison, Pacific Gas & Electric and San Diego Gas & Electric filed a proposal on Thursday that would install a fixed-rate electric bill system for those under the three largest power companies in the state, the Globe reported. Talk about burying the lede. The real plan is to create income-based utility billing.
Currently, utility bills are based on electricity and gas consumption. The utility companies are now proposing income-based utility billing so that higher-income earners pay for more than they use, subsidizing the rates for lower income customers.
“From each according to his ability, to each according to his needs,” Karl Marx wrote in his Communist Manifesto. In a nutshell, Marx said productive, hard-working and successful people must sacrifice to less productive, and unproductive people.
The State of California, the California Legislature and California Gov. Gavin Newsom are punishing productive successful people. Again. And they are saying the quiet parts out loud.
“Human beings have choice, and some people choose to work really hard and be productive,” Alex Epstein, author of The Moral Case for Fossil Fuels and Fossil Future said in a recent interview. “And the idea [of socialism] is: they get punished. They get limitless theoretical punishment to the extent that somebody else, deliberately or not, doesn’t succeed.”
The pilgrims learned this lesson fairly quickly when they arrived in America in 1620:
The settlers created a communal society where they received their clothing, food, and supplies from the colony’s “common stock” according to their needs. The profits of labor were divided equally rather than by what was earned through hard work.
This system quickly led to discontent: The healthy and able-bodied colonists who worked in the fields all day began to resent the colonists who performed zero labor.
After about two years of famine and disaffection, the Pilgrims finally had a meeting and abandoned the socialist system. The colony’s new system required each family to take care of themselves, and made the settlers personally responsible for their own means of survival. There was no “common stock” to provide for them. This led to the entire colony becoming more prosperous—those who earlier claimed to be infirm became motivated and industrious, with men, women, and youth alike working in the fields eager to reap the benefits of their labor. The only way for a society to prosper as a whole is through hard work and personal responsibility, not through promises of equal outcomes.
This idea for “equitable energy rates” isn’t exactly new, but it’s important to note that the Pilgrims figured out that Socialism doesn’t work 228 years before Karl Marx’s flawed Manifesto.
A 2021 report from the University of California at Berkeley recommends that the state link California’s highest-in-the-nation electricity bills to customer incomes – ie. your ability to pay.
Authors Severin Borenstein (an economist), Meredith Fowlie, and Jim Sallee of the UC Berkeley and the Energy Institute at Haas admit that California’s electricity rates are so high, lower-income households pay a larger share of their income on electricity.
California has the highest electricity rates in the country. “Those costs could rise even faster over the next decade, as utilities harden their grids against wildfires, grow their share of net-metered rooftop solar and add other costs that will be passed through to utility customers,” Next 10 reported over two years ago – a non-profit which supports “ambitious environmental goals” and “Electricity Rates for An Equitable Energy Transition.”
“But recovering those costs by charging customers by the kilowatt-hour pushes too much of the burden on those least able to pay,” so to combat this, rather than using all available energy sources to create energy abundance, the Berkeley report proposes “cutting back on the volumetric per-kilowatt-hour charges on customers’ bills and recovering the missing money through constructs tied to customers’ income.”
California is rich in natural resources which once powered the state: natural gas deposits in the Monterey Shale formation; geothermal energy, abundant rivers and waterways such as the San Joaquin River Delta and hydroelectric dams; the Pacific coastline; 85 million acres of wildlands with 17 million of those used as commercial timberland; and mines and mineral resources.
The Berkeley report revealed approximately eight million residents currently owe money to investor-owned utilities, according to a recent presentation by the California Public Utility Commission.
Berkeley’s recommendation: “Alternatively, infrastructure and public purpose investment costs could be recovered via income-based fixed charges paired with an efficient volumetric price that reflects the social marginal cost.”
And here is Berkeley’s Conclusion in full Socialist/Marxist speak:
- In California, volumetric electricity rates are used to raise revenues for climate mitigation, infrastructure investments, wildfire mitigation, etc.
- This amounts to a highly regressive tax with negative implications for both efficiency and equity. Other states and countries are, unfortunately, following California’s lead in this policy as well.
- Changing the way costs are recovered to reduce electricity rates can help ensure affordable and attractive electricity consumption as we look to rapidly increase usage on the path to decarbonization.
- Paying for most non-marginal costs through government budget or income-based fixed charges would improve equity by lightening the burden of cost recovery on households that can least afford to pay.
“Customers who can afford rooftop solar systems, behind-the-meter batteries or other distributed energy resources to offset those rising rates may be able to mitigate them, the CPUC noted. But that will leave customers without those resources on the other side of a ‘growing divide in the cost of service.’”
Borenstein wrote:
Last fall, the California Public Utilities Commission (CPUC) began a new regulatory process to revisit the state’s net energy metering (NEM) policies for rooftop solar and other behind-the-meter generation. Since it was adopted in the 1990s, NEM has been a big factor driving residential solar adoption. For every kilowatt-hour (kWh) that a customer injects into the grid, NEM reduces one-for-one the kWhs of electricity the customer has to pay for at retail rates. Effectively, the utility is buying power from customers at the full residential retail rate, rather than the much lower wholesale market price that other suppliers are paid.
With nearly 200,000 wealthier-than-average California customers now installing solar every year, and the state even mandating them for new homes, that reckoning has arrived. The CPUC is stuck between the inequity rock of generally-poorer ratepayers continuing to subsidize rooftop solar adopters and the political-blowback hard place of phasing out NEM, which would mean paying the solar households something much closer to the wholesale price for their exports to the grid.
Californians were forced into rooftop solar when the California Legislature passed a law mandating solar on all new construction, whether homeowners wanted it or not. One of the incentives was to offer purchase of a backup battery to store extra power, allowing the consumer to sell that extra electricity back to the utility. Now, after the homeowner paid for a very expensive rooftop solar system and backup battery, the CPUC backed out of the deal.
Borenstein called this “‘perverse incentives’ created by the huge gap between the retail price and the utility’s cost of supplying additional power to the customer.”
The bottom line, and real goal of the radical environmentalists is to make electricity so expensive, homeowners will be forced to initiate self-blackouts of electric appliances during certain times of day, and electric car owners won’t be able to afford the high costs to keep them charged.
Environmentalists have no special love for electric cars – they just want everyone out of cars. So if they can make electricity so expensive that people can’t afford to drive electric cars, well then good.
And this is done by limiting energy sources rather than using an all-of-the-above approach to energy production in California: Oil, gas, coal, nuclear, hydroelectric, solar and wind.
If all we are allowed to use is renewable energy for electricity production – a deliberate energy shortage – statewide shortages and rolling blackouts inevitably become the new California normal. We are being conditioned to accept this as normal by some very evil leaders.
Katy Grimes, the Editor of the California Globe, is a long-time Investigative Journalist covering the California State Capitol, and the co-author of California's War Against Donald Trump: Who Wins? Who Loses?
