Will Getting the Grid Ready for 100 Percent Renewables Spike Electricity Bills?

By Leanna Sweha

PG&E has been making improvements to its grid to meet the state’s mandate to provide 50 percent of electricity from renewable sources by 2030. This is one driver of recent rate increases.

Now, a bill (SB 100) that moves up the 50 percent renewable mandate to 2026 and sets a 100 percent renewable goal by 2045 may pass the state legislature.

Steve Malnight, Senior Vice President of Strategy and Policy at PG&E, discussed how the move to 100 percent renewable energy will impact the electricity grid in terms of reliability and costs to consumers.

Malnight was part of a panel called ‘100% Clean Grid: Is It Possible?’ at an Advanced Energy Economy conference in Sacramento on June 21.

Malnight opened by saying he didn’t know if a 100 percent renewable-ready grid is possible, describing it as a move into “uncharted territory.”

“The grid of the future will look a lot different from today’s grid and will require new technology, particularly storage,” Malnight said. Distributed generation, electric vehicles and other storage systems will play an essential role.

Malnight spoke in favor of an integrated western regional power market, so that utilities and other power buyers in California can purchase power from generators in other western states to help balance electricity demand and supply. This will help with both reliability and prices. He said the state would be missing an opportunity if it chooses to pursue the 100 percent renewable goal as an “island economy.”

Malnight noted that utilities today are basically grid providers that resell electricity from third-party generators at zero profit. He explained that while grid charges are currently wrapped into the kWh rate, future pricing needs to separate out grid charges from electricity charges.

“Grid reliability is a service that must be priced accurately,” he said. He emphasized that pricing must support grid investments, but did not say much PG&E may have to spend to upgrade its grid or how rates would be impacted.

This is probably because the calculation is next to impossible at present. Experts say a lot will depend on the costs of storage technology and the relative costs of renewable versus natural gas. One state study estimated the cost to meet the current 50 percent mandate would be in the billions of dollars. It’s hard to believe this would not increase electricity rates.

The Valley Clean Energy Alliance (VCEA), our area’s new community choice aggregator will benefit from a grid that can handle more renewables but will also have to compensate PG&E for grid improvements.

Yolo County and the City of Davis are the current members of VCEA with the City of Woodland joining in the near future.

When VCEA roles out in 2018, PG&E customers will be automatically enrolled in VCEA but will have the choice to opt out and return to PG&E.

PG&E remains the owner and operator of the grid and will charge for its use. Grid usage charges will be the same, whether a customer is with VCEA or PG&E. So, these costs will not cause any price difference between VCEA and PG&E rates.

But, there is another charge, called the ‘Power Charge Indifference Adjustment’ (PCIA), that will cause price differences between PG&E and VCEA. This is because only VCEA customers will pay the PCIA.  The PCIA is not related to grid costs, but rather to PG&E legacy power procurement costs.  We will cover the PCIA in a future article.

Bottom line – grid improvements will increase rates, but it’s too early to know by how much. We also can expect to see separate electricity and grid usage charges on our bills in the future, which should make rates more transparent. But this will take time, because PG&E must get its rates approved periodically by the state Public Utilities Commission, and the current rates combine electricity charges with grid charges.

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  1. Alan Miller

    This utopian ideal of “clean” energy comes with consequences — it already has.

    I am part of an alliance of environmental groups that fights clean energy.  Yes you heard me right.

    Desert Survivors and some chapters of the Sierra Club and many other desert protections groups are in a battle to the death over desert scraping for mass solar operations.  Deserts, unlike forests, do not heal themselves over decades or centuries.  The rate of change is slow.  Scars on the desert can last 10’s of 1000’s of years.

    Beyond that, many of these solar operations do not use solar panels, but actually use solar heat to run turbines, requiring steam, and thus precious desert groundwater.  Drawing down groundwater often causes springs to dry up, the only sources of water for animals and birds for miles.

    One of the worst is the huge installation near Primm, NV.  Desert tortoises often die when relocated.  This isn’t a “token” endangered species for lawsuit purposes.  These are real animals that die at times near 50% when relocated.  Bulldozers are used to scrape the native vegetation and little is left in the way of life.

    Another area of destruction is the beautiful, pristine, remote Pinoche Valley.  A corporate solar installation is about to destroy the valley floor.  This is all a result of Obama and Brown administration policies, such as the mass fraud subsidized Milpitas corporation of Solera.  Yes, the top Dems are some of the biggest environmental destuctors.

    A slogan for the groups is “Solar cells on rooftops, not on the backs of tortoises.”  These groups are not against solar energy.  Solar works best in small installations in the areas of use.  Running it in from the desert there is an average of 70% loss.  Solar should be expanded in urban areas.  The corporate solar is a massive, destructive fraud and sham, to subsidize big solar, friends of the cronies.  Big environmental destruction.  Unless you believe deserts are wastelands.  Remember the 1940’s-50’s proposals to ship all are garbage into the playas of Nevada and dump it in the open?  This is little better.

    Do not be fooled and triggered by words like “solar” and “green”.   Not only will rates go up, this march towards “renewable” energy means the loss of mass swaths of remote, largely desert, environments.  Be like Toto, look behind the curtain.



    1. Ron

      Alan:  You are absolutely correct, regarding this issue.  (I wasn’t aware of some of the details you’ve provided.)  Environmental groups have been raising these concerns for some time, now.

      As you noted, these concerns “pre-date” Trump’s administration.

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