Reform California Chairman Carl DeMaio today testified before the California Public Utilities Commission on the recent rate spikes for electric and gas utilities. Here is a transcript of his prepared remarks:
As you all know as CPUC Commissioners, California’s utility rates are not set by private utilities – they are set by you as appointees of state politicians.
If you or Governor Gavin Newsom want to find the real cause of our high utility costs, then all you have to do is simply look in the mirror.
You and the Governor are the ones forcing California ratepayers to pay the costs of your extreme fixation on climate change.
This Friday the Transparency Foundation will release a study of the utility rate cases approved by the CPUC.
That study shows you have imposed rates on Californians that are 67.1% more for electricity and 30.1% more for natural gas than national average in 2022 – and that’s before additional recent price spikes.
You have also imposed “hidden state taxes” through unnecessary charges like Public Purpose Programs and various climate change regulations – resulting in a total “hidden state tax” rate of 26-30% for electricity and 17-28% for gas.
You and I both know that your fixation on climate change policies are driving the biggest rate increases we are seeing. In fact, in PG&E’s 2023 rate case submitted to this very Commission last month, they admit the rate increases they seek are directly driven by “the impact of the State’s decarbonization strategy.”
California’s climate change mandates were also cited as the driver of a June 2021 decision by Pacific Gas & Electric to dramatically reduce its investment in natural gas storage in California. On March 28, 2022 Standard and Poor’s reported:
“Because of a declining outlook for gas demand in California, it made sense for PG&E to exit commercial storage activity rather than upgrade its storage facilities at a cost of nearly $5 billion over a 20-year period. Instead, PG&E only maintains enough storage to balance its own system, supplemented by injection and withdrawal capacity from independent storage providers. The additional 51 Bcf of working gas capacity was necessary decades ago, but as winter-to-summer spreads continue to shrink and overall gas demand in California trends downward, (gas) storage has become less valuable.”
Without investment in storage, we expose California ratepayers to more risk of price fluctuations due to market supply disruptions.
In closing, you and all energy industry experts have expected these high rates from the very beginning of your forced transition of California from a market-based energy market to a virtue-signaling circus where energy prices are higher than they should be and energy supplies are far less reliable.
From the beginning, the California GREEN NEW DEAL was expected to cost hundreds of billions of dollars – and now you are forcing unsuspecting ratepayers to foot the bill for your mistakes.
It is time to return to a utility rate model that allows utilities to purchase the cheapest and most reliable energy for our residents. To do anything less than that is downright theft from California ratepayers.