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Why PG&E’s blaming Climate Change for $17B wildfire damages is a crazy cradle-to-cradle conundrum

Firefighters battle the Medocino Complex fire near Lodoga, California on Aug. 7. Photographer: Justin Sullivan/Getty Images

Firefighters battle the Medocino Complex fire near Lodoga, California on Aug. 7. Photographer: Justin Sullivan/Getty Images

As brave firefighters and first responders continue to battle -- and tragically lose their lives -- history-making wildfires, one of the US’ top energy utilities just presented what may be one of the craziest twists yet in the Costs of Climate Change Blame Game.

The CEO of PG&E says that climate change, not sparks caused by PG&E’s downed power lines, is responsible for loss of life, property, trees, wildlife and health from last year's and future wildfires. Thus, the current $17 billion (USD) fire damage bill and any moving forward should be covered by insurance or government agencies, not energy utilities.

I don’t know about you but this cradle-to-cradle conundrum makes my head spin.

Before untwisting the thinking, let me preface the following by saying I don't want to see utilities go into bankruptcy as a result. Or insurance companies, FERC and our government and/or the individuals harmed by wildfires. As monopolies, energy utilities own the power lines that transport electricity. So if we are to broaden solar and wind distribution when and where the sun doesn't shine nor wind blow, then we need energy transportation (and more storage too). Utilities have the capital resources to stall or accelerate clean energy use.

I also have a number of good friends at PG&E and admire many of their professionals. As someone living in Sonoma County California, home of claimants to much of the $17B bill now up for debate, I am so very, very grateful that so many dedicated PG&E boots were and are on the ground helping fire ravaged communities.

So let’s lay out the facts.

Climate change is caused by human practices, specifically those involving releasing Greenhouse Gas (GHG) emissions into our atmosphere. Scientists have found a direct link between climate change, global warming and increased heat extremes. Soul-disturbing studies released this week estimate that we may have already tipped into “Hothouse Earth.” Wildfires and other wild weather swings will grow as a result.

Humans burning fossil fuels over the past 100+ years have accelerated GHG emissions that build up in Earth’s atmosphere. Utilities and fossil fuel companies remain the top GHG emitters.

Since it began burning gas to help power gold rush society over 150 years ago, PG&E has always burned fossil fuels to make light and electricity. Today, PG&E is a top 10 US energy utility with nearly one third of its generation portfolio still comprised of natural gas and other “non-emissions free sources.”

On the positive side, that means PG&E over the past 20 years has successfully shifted to generate more than two thirds of its power “emissions free” -- 24% nuclear, 12% hydro and 33% renewables generation.

Weirdness moment: we’ve done such a great job of deploying energy efficiency and investing in renewables that California now produces far more power than it needs. As much as 21% more. So it’s part of the Crazy Climate Change Blame Game that regulators and PG&E continue to pursue building new power plants that are simply not needed.

As a means to help battle climate change and appeasing customer demand for renewable energy, PG&E and the Northern California market it serves are now seen as solar success stories. In 2015 and 2016, as "rooftop" solar installations purchased by residential and business customers exceeded 5% of PG&E's total generation, PG&E has since:

  • Added $145 fee for every new solar rooftop added to “their” generation matrix.
  • Added a "Minimum Delivery Charge" of $10 per month for solar owners, regardless of generation or usage. The monthly fee supposedly helps cover cost of using and maintaining PG&E’s power lines.
  • Instituted Net Metering 2.0, which limits homeowner or business solar generation to 1000Kw. Most home solar installers estimate that this is roughly 60-75% of annual usage. Net Metering requires all excess solar power generated to go over PG&E lines (see Minimum Delivery Charge) and PG&E will credit generation against future bills.
  • Allowed Community Choice aggregation to enable those who can’t afford or can’t install their own solar to still use emissions-free energy.
  • Charged Community Choice customers an additional "Power Charge Indifference Adjustment or PCIA." This is a truly horrible name for a fee to cover “the adjustment that includes (generation) costs prior to the customers’ departures.” It’s dubbed an “exit tax,” paid monthly, and is based on some super secret formula I can’t find (please advise if you know how it’s calculated). For me, 70%+ of my monthly electric bill pays for PCIA and PGE’s other "electric delivery" costs. Less than 30% is actual generation.

Cradle-to-cradle conundrum recap:

  1. Utilities want to blame wildfires on climate change so somebody else pays damages.
  2. Climate change is caused by human actions, primarily GHG emissions from burning fossil fuels.
  3. Energy utilities have profited from burning fossil fuels for 100+ years. Utilities remain chart-topping GHG emitters.
  4. Energy utilities are charging customers numerous fees for choosing 100% GHT/emissions-free renewable energy, such as solar.
  5. Utilities charge solar owners fees to cover costs to maintain power lines. Excess solar benefits other rate payers and reduces need for new power plant investments. Customer-owned solar helps bump up utilities' renewable generation portfolio percentages.
  6. Downed utility-owned-&-maintained power lines emit sparks that set wildfires ablaze.
  7. Utilities want to blame wildfires on climate change...

Next stop? Insurance company rebuttals. Push back from FEMA and the Trump Administration. Where will this Climate Change Blame Game go next?

Carol Schmitt's picture

Thank Carol for the Post!

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Bob Meinetz's picture
Bob Meinetz on Aug 24, 2018 8:45 pm GMT

Carol, thanks for laying out the facts. Facts are important, in our ongoing energy debate. You missed a few:

1) After fifty years and tens of $billions spent in development, solar energy generates just over 1% of U.S. electricity.

2) After almost as much time and money spent, wind generates 6.3% of U.S. electricity (2017).

3) Both, either alone or together, have yet to replace a single fossil fuel plant.

4) Though California wildfires were not started by climate change, 90% of recent damage to life and property (21 deaths, $730 million) was the result of climate change-related factors.

5) By 2025, half of PG&E's carbon-free generation will disappear with the shutdown of Diablo Canyon (nuclear) Power Plant. Currently, PG&E has plans to replace 2 of Diablo's 18 terawatthours of clean generation with renewables, or 11%. The other 89% will be replaced by burning gas, adding 7 million tons of CO2 to California's emissions.

6) The National Park Service says 90% of wildfires are caused by human error or arson - not by power lines or lightning.

7) Solar/wind advocates who complain they want "100% GHT/emissions-free renewable energy" remain connected to the grid, dependent on fossil fuel for their electricity. Why? Because "100% GHT/emissions-free renewable energy" is a fairy tale.

8) What does "GHT" stand for?

Carol Schmitt's picture
Carol Schmitt on Aug 29, 2018 6:55 pm GMT

Thanks Bob for your insights. You bring up a number of things that may need some clarification. The easiest is that "GHT" is a typo. Should be "GHG" :)

This article only focuses on lawsuits raised against utilities, who own and maintain power lines implicated for starting fires. Other sources not relevant as they aren't defendents in these particular suits.

Energy utilities that have burned fossil fuels for over 100 years continue to be seen as the top emitters of GHGs and thus, top contributors to accelerating climate change.

As to Diablo Canyon nuclear power plant, per PG&E, majority of its planned maintenance expenses have and will continue to go to pay for maintaining the plant. Thus, PG&E reported to CPUC in January the nuclear plant is too expensive to maintain. Again, per PG&E, this one plant provides 30% (not 50%) of today's GHG free emissions. I have not found the source you mention about replacing its generation with gas. Pls share source.

 As far as I can find, PG&E is looking to replace Diablo Canyon and power to 1.7 million homes with renewables, energy storage and/or full carbon capture. 

As to solar, it's expected that we'll hit this year 15% (or more) of California's total generation is solar. Yes, vast majority of solar and renewables came online only past decade, fueled by public demand, new policy and excellent new finance mechanisms (eg. green bonds). California law requires at least 50 percent of the state’s electricity to come from noncarbon-producing sources by 2030. New legislation being debated would make that target even more aggressive.

Just proof that public demand -- 80-90% of Californian's prefer clean energy -- and corresponding public policy are critical to trying to limit damage from human's influence. 

In the meantime, utilities, insurance companies, governments and energy customers all are watching who is responsible for and who pays one part of the bill: damages caused by fires ignited by downed power lines. 

Bob Meinetz's picture
Bob Meinetz on Aug 31, 2018 12:38 am GMT

Carol, my source for replacing Diablo Canyon with gas is their application filed with the CPUC, #A16-08-006, available at cpuc.ca.gov. They were asked to come up with figures for how much of DC's annual generation they could replace with renewables, and submitted a back-of-napkin estimate of 2 terawatthours - 11% of Diablo Canyon's 18 TWh/year. By process of elimination the only other source that could make up the difference would be natural gas, coal, or oil. When they were challenged to verify 2 TWh, they couldn't - so accounting for that missing energy was kicked down the road to an Integrated Resource Plan, to be filed at sometime indefinite time in the future.

The idea Diablo Canyon is "too expensive to maintain" is nonsense. The plant generates electricity at a marginal cost of 2.7¢/kWh, and it will be completely paid off in 2025, the year PG&E abandons it. Would you abandon your home the year it was paid off? I certainly wouldn't abandon mine - if I couldn't sell it, I would rent it - find a way to keep it earning money.

So what's going on with Pacific Gas & Electric Corporation, PG&E's holding company, that would make them want to tear it down?

Due to deregulation thirteen years ago, energy holding companies have been handed quite a sweet opportunity, one that has been banned since the Great Depression. It works like this: the gas subsidiary of a holding company sells gas to the electricity subsidiary to generate electricity, then the electricity subsidiary bills its ratepayers for electricity. When they request a rate increase from the California Public Utility Commission, they show their expenses (gas is one), and the CPUC permits them to raise prices enough to cover them. But...but...their own "sister" company is selling them gas! How do we know their "sister" company isn't marking up the price of gas just so her "sister" can bill more? Known as "affiliate transactions", they were banned 83 years ago when the Public Utility Holding Company Act of 1935 was signed by FDR. It was repealed in 2005, and now utilities are up to the same old tricks.

And here's the rub - it's perfectly legal. Natural gas ends up being many times more profitable than nuclear - while nuclear, because it hardly uses any fuel, is literally too economical. PG&E can't bill ratepayers enough.

So PG&E will build some solar farms (and bill ratepayers for them), and erect some wind turbines (and bill ratepayers for them), but won't make a dime on them. They'll be making a haul selling natural gas as fast as it can be pulled from the ground, while kicking the can on "100% renewables" down the road until the end of time (or gas, whichever comes first).

Carol, I've been following this a long, long time. I've testified personally before the CPUC. I've submitted filings in rate cases for San Onofre, for Diablo Canyon and my local utility. I've met oil company attorneys who make $800/hour to push natural gas down the throats of Californians and tell them "100% renewable electricity is just around the corner". It's been just around the corner for 40 years.

Bob Meinetz's picture
Bob Meinetz on Aug 31, 2018 1:03 am GMT

Carol, grid-scale storage can't power anything. It's not like batteries you buy at the drugstore - it has to be charged, then charged again, etc.

Currently, every grid-scale storage facility in the state is being charged by a gas plant sitting next to it. In the process, it wastes 17% of the energy that goes into it due to internal resistance losses - making its electricity 17% dirtier than if it was generated while used.

Storage, the way it's used now, makes electricity dirtier - not cleaner.

Rick Engebretson's picture
Rick Engebretson on Aug 25, 2018 11:23 am GMT

How do Californians ignore the pollution of the Pacific Ocean?? How can they not understand plastics and other dumped garbage are altering Pacific Ocean moisture weather patterns??

Wayne Lusvardi's picture
Wayne Lusvardi on Aug 30, 2018 10:07 pm GMT

Well, a climate consultant/activist concludes that climate caused recent California fires. Consider the occupational ideology before giving this too much credence. 

Look, I once worked at California largest urban water agency that built and operates the Colorado River Aqueduct.  Large, regional, wholesale water agencies were formed to fight "climate change" way back in the 1930's. Only then it was called cyclical "droughts".  By conveying water hundreds of miles arid areas became urbanized. The hot spells and wild fires didn't stop or increase because of global warming.  

Here is a Progression of Development Map in California prepared by the California Fire Assessment Program indicating historical direction of development in California - 

LINK http://frap.fire.ca.gov/projects/development_vegetation/dp_figs/Hisdev5k.bmp

What you see on the Development Progression Map shaded in green dots is that recent development has progressed into hotter inland areas instead of the older, cooler coastal areas.  

Also, below is a link to a map of the recent fires in California during 2018:

http://www.fire.ca.gov/general/firemaps

It isn't coincidental that the perceived increase in destructive fires is occurring in the path of development. 

So, yes, there is man made global warming or climate change or whatever you to call it.  But it is mainly because population is growing in rural, hotter areas that have always been prone to wild fires. Which leads us to ask: "did the Mountain move to Muhammed, or did Muhammed move to the mountain"?  Population has moved into hot spots in Northern and Inland California seeking affordable housing or upscale, bucolic natural settings to escape cities. So people have caused "global warming" and fires, but only because they have moved into harms way. If you moved from  California to anywhere near the Equator you would think it got hotter too. 

FYI, there is newere transmission line cable technology where copper cable is wrapped in ceramic material that stops the drooping of power lines in hot fires and hot desert areas. But it isn't PG&E or SDG&E that is resisting the installation of such technology. It is the Public Utilities Commission that regulates these companies. And, look, the utility companies pick up the tab for thousands of fire fighter jobs instead of the Utility Commission having to raise power rates to pay the cost of these fires. So the PUC isn't going to want to change that.  

 

 

Bob Meinetz's picture
Bob Meinetz on Aug 31, 2018 4:43 am GMT

Wayne, usually authorities, property owners, and utilities determine who "caused" wildfires like this: whatever way doesn't leave them on the hook for damages, but preferably whoever has deep enough pockets to cover them.

Say high winds pull a dried out limb from a tree dried out by summer, made drier by climate change, and throw it against a utility line yards away from the tree. The lines short, sparks fall into the brush below, and start a fire. Who's at fault?

1) The utility, for not trimming trees around their lines enough. They should have doubled everyone's rates years ago to cover the cost of trimming the trees way, way back.

2) People who bought homes in the area, who weren't smart enough to see it coming. They should have known better.

3) Forest / Park / Municipal landscapers, for not trimming their trees far enough back. They shouldn't have been so lazy.

4) Municipal planners, for not warning residents of potential dangers. Is that too much to ask?

5) Brown people in other countries, for having too many kids and causing climate change. They should care more about the problems of rich Americans.

...

1149) Taxpayers, for living in a state/country where authorities haven't figured out how to guarantee living there can be nirvana for everyone. Is that too much to ask?

Take your pick, then hire a good attorney.

Carol Schmitt's picture
Carol Schmitt on Sep 4, 2018 6:55 pm GMT

As an update, California bill is sitting on Governor Brown's desk that would stop utilities from charging rate payers for fire loss damages attributed to the utilities' actions (or inactions)...http://bit.ly/2CjrrBl

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