Job Killer Increasing California Energy Costs in Committee Today

The Senate Rules Committee today will consider the newest job killer bill identified by the California Chamber of Commerce. AB 893 (E. Garcia; D-Coachella) will substantially increase rates for California ratepayers by requiring procurement of 4,250 megawatts (MW) of additional and unneeded geothermal, solar, and wind power.

CalChamber has identified AB 893 as a job killer because it would discourage energy-dependent businesses from growing in California and would add new overhead costs for all California employers. AB 893 also creates incentives for utilities to purchase out-of-state power to satisfy the mandate, threatening even more California jobs.

Unrealistic Procurement Numbers

California’s investor-owned utilities (IOU) and publicly owned utilities (POU) already use a diverse mix of renewable resources and are on track to meet and exceed California’s aggressive Renewable Portfolio Standard (RPS) goals.

According to CalChamber’s analysis, AB 893’s procurement mandate significantly increases costs by removing the utilities’ ability to meet RPS goals in a cost-effective manner. AB 893 will inevitably increase energy costs for California ratepayers and requires all of this procurement on an expedited timeline—some utilities must submit a plan a mere nine or 10 months from now, giving the Public Utilities Commission a deadline of just 30 days to evaluate those plans.

Significant Cost Increases

Per kilowatt hour electricity rates in California are already among the highest in the nation. As of April 2017, some ratepayers pay a premium of 68% for electricity and 73% for natural gas over the national average, which has an impact on businesses’ ability to be competitive if they continue to be located in California.

The RPS standard uses the “least-cost, best-fit” competitive bidding process to meet California’s ambitious goals in a cost-effective manner. According to CalChamber’s letter, AB 893 thwarts that process by forcing utilities to purchase more expensive power and pass along increased rates to California ratepayers.

Action Needed

The CalChamber is encouraging members to contact their senators to urge them to oppose AB 893. The Legislature has until August 31 to send bills to the Governor’s desk.