California may give up a lot of freedom to join western power grid

California may give up a lot of freedom to join western power grid

With just 10 days left until the end of the California legislative session, one bill caught our eye. It has to do with your electric bill and a possible return to the days of the California energy crisis 25 years ago.

SACRAMENTO, Calif. - With just 10 days left until the end of the California legislative session, one bill caught our eye. It has to do with your electric bill and a possible return to the days of the California energy crisis 25 years ago.

California is the undisputed leader among states in clean and renewable energy of all kinds, but it may soon turn to coal as well.  A full court press is on because if the bill in question is not printed by Thursday, it cannot become law this session.   

Governor Gavin Newsom wants California to join a power grid covering the western states. The governor says, "Over $1 billion in economic benefits to our state is on the line and failure to get this done will mean higher electric bills, more pollution and a less reliable power grid."          

Supporters include some environmental groups and clean energy developers. But so do investor-owned utilities, utility unions, energy producers including coal, energy traders and energy-hungry high-tech firms such as Google, Microsoft and Amazon.

Now a bill is being considered called SB 540. But, under the original bill, there were guard rails, built-in protections to forbid price gouging as well as market manipulation by traders.  

"The backers of this bill say, with the guard rails, then it's no good. So that bill is actually dead. It would not move because the backers wanted the guard rails taken out. "The only way this bill moves is without those guardrails," said Jamie Court of Consumer Watchdog.

Without guardrails, critics say California would also give up many of its environmental controls, power choices, the requirement that power supplies make maximum supplies and minimized prices, including coal plants of which the western states have many.  

Once in the grid, the state could not get out. "It puts it in a market that is beyond the reach of the state's sovereignty and that is set by traders; traders who have an incentive to make as much money off the cost of electricity as possible," said Court.

Power would be bought at auctions. "You have this situation where there is an auction, and the highest bidder sets the price for the entire market," said Court.

Much of this harkens back to the year 2000, when the legislature unanimously signed a bill deregulating electricity which bankrupted PG&E, drained the state's coffers, cost Governor Gray Davis his job, and damaged the California economy in many ways.

"And, the fact is, no one has presented a convincing argument that this is gonna save ratepayers a dime," said Mark Toney of the Utility Reform Network. 

We'll be watching closely.