When ex-Gov. Arnold Schwarzenegger and former Interior Secretary Ken Salazar made their way onto a hot, dry alkali flat just west of the Interstate 15 freeway between Barstow and Las Vegas in late 2010, all anyone knew for sure was that they were opening an era of giantism in solar electricity in California.
What no one could predict was that they were also putting a stamp of approval on the spread of energy poverty in many parts of this state.
The Ivanpah dry lake on which the two former officials proudly strode that day now hosts a huge solar farm easily visible as a glassy sea of deep blue to travelers just southwest of the California-Nevada state line. Ivanpah , built largely with federal loans, is the second-largest of half a dozen desert-region solar thermal developments that produce many thousands of megawatts for privately-owned utilities like Southern California Edison Co., Pacific Gas & Electric Co. and San Diego Gas & Electric Co.
Besides paying for the energy produced by those plants, including construction costs, the big utilities have erected hundreds of miles of power transmission lines to bring the sun’s energy to big cities in all parts of California. When they do that, they receive about 14 percent profit on their constructions costs each year for 20 years.
The solar farms are part of a plan first adopted by executive order by Schwarzenegger and later expanded on by current Gov. Jerry Brown. By 2020, California is to produce one-third of its electricity from renewable sources. By 2030, that’s supposed to rise to one-half. Of course, the current four-year drought has tossed a wrench into some of the calculations behind those mandates, causing enormous cuts in the power produced by hydroelectric dams for more than a century.
One result has been more dependence on solar and wind power, far more expensive components of the state’s portfolio of renewables.
Overall, the emphasis on expensive solar farms – some so high-priced that the scandal-ridden state Public Utilities Commission refuses to publish their actual costs – has raised wind and solar energy production to about 12 percent of California’s total power usage. The cost of that energy comes to about $84 per megawatt hour, compared to the average $46 per megawatt hour wholesale cost of electricity, according to a new report from the conservative-oriented Manhattan Institute, headquartered in New York.
As these developments advanced, California power prices increased by 35 percent, now 40 percent above than the national average. The cost for power from California’s privately-owned utilities ranged from 18 cents to 21 cents per kilowatt hour, compared with 12 cents nationally.
That has produced what the Manhattan Institute calls energy poverty in some of the poorest parts of California, a phenomenon that will surely increase by 2018, when the utilities commission activates its new two-tier rate structure, designed to lower rates for big users and raise them for the more power-efficient.
Energy poverty occurs when the price of power rises above 10 percent of household income. Figures developed in the Manhattan report from U.S. Census information indicate 15 percent of Tulare County households (21,052 homes) were using more than 10 percent of their total funds for electricity, followed closely by Madera County at 14.9 percent.
By contrast, wealthy coastal counties where air conditioning is not as important had far lower energy poverty rates. The lowest such poverty occurred in Santa Cruz County, where just 2.1 percent of households used more than 10 percent of their income on power, with Ventura, San Mateo, San Francisco and Santa Barbara counties all under 3 percent.
So it turns out that California’s green energy policies, as now carried out, amount to a regressive tax on the poorest Californians. For the most part, the highest energy poverty rates occur in the counties with the highest unemployment.
Far from being champions of the poor, then, Schwarzenegger, Brown and their appointees have been the very opposite.
The upshot is not to abandon green energy, but to tweak it. Rather than stressing the huge, expensive solar farms, it’s high time to stress rooftop solar in the cities, for which state subsidies are running out. That kind of development requires no new power lines and far less money for the same energy.
Without those subsidies, California’s energy policies will become even more regressive and burdensome for the poor.