Our Future Just Took a Turn for the Worse

The Wintu Audubon Chapter recently sponsored an excellent presentation highlighting the newly released report titled “California Birds in a Changing Climate”. Like most climate science these days, the takeaways were alarming. The findings: Two-thirds of North American birds studied- 389 out of 604 species- face unlivable climate conditions across most of their current range by 2080 if global temperatures remain on track to rise by 3 degrees Celsius. Here in California, 170 species of birds will see their habitat reduced by more than 50% by 2080, with 83 species losing that same amount of habitat by 2050!

One of the Audubon’s calls to action is for citizens to vote for people and policies that foster sustainability. Look no farther than a recent Redding City Council decision on renewable energy net metering policy to see how local elected officials responded to a clear opportunity to support adaptation and change.

At issue was nothing short of the future of solar power in Redding. Specifically, the rate paid to new solar energy producers for excess power production was decided. On a 3 to 2 vote, Council decided to support a rate less than half of current rate paid for excess generation. According to the solar industry, this rate will make new solar power installations economically impractical.

Here’s how the vote went down: Councilwoman Winter moved to support a reduced rate, with Councilwoman Schreder seconding that motion. Councilman Daquisito forwarded an alternative motion in support of a higher tariff, which was seconded by Mayor McElvain. Daquisto’s motion was defeated on a 3 to 2 vote, with Councilwoman Resner siding with Winter and Schreder. Winter’s motion then passed 3 to 2. Bottom line, Winter, Schreder and Resner voted in favor of the reduced rate, Daquisto and McElvain against.

There you have it. Informed voters should long remember this vote.

Fast forward 5 years: Will Redding be a hub for electric cars, with distributed solar assets propelling our community forward in a carbon neutral world? Not likely, because solar power export rates, while defensible, are not feasible. With the drop of a gavel, the door for electric vehicle market penetration slammed shut. It won’t be economically rational to produce solar power by day and charge your electric car at night.

It’s amazing that REU, a utility company with $150 million in sales and $300 million in assets, has so little civilian oversight. This fact was noted by several members of the recently disbanded solar tariff committee. It was noted that discussion on solar tariffs were narrowly bounded by existing policies, and that discussion of policy review or change was not allowed during tariff deliberation. It was noted that, unlike Parks and Recreation or Public Works, Redding Electric Utility has no citizen’s advisory commission. The Redding Electric Utility citizen oversight commission was disbanded in 2015.

Here’s why citizen oversight of this major community asset is so critical to change: The policy choices offered to Council are based on Redding Electric Utility’s (REU) definition of sustainability. REU’s written policies promote sustainability as a core value, but define sustainability strictly in economic terms. The options presented to Council have everything to do with sustaining cash flow, and nothing to do with sustaining environmental vitality.

Redding’s new ‘smart’ meter investment provides an excellent example. For investor owned utilities, the Net Energy Metering successor tariff (NEM2) will see a mandatory switch to smart meters that support time of use (TOU) pricing for new solar installations. TOU metering results in lower peak demand for utilities, and lower costs for consumers. TOU meters are an essential ingredient for economic viability of new solar plus battery installations. TOU meters are critical for making electric cars economically rational. TOU technology replaces the economic advantages lost to declining subsidy (solar tax credits) with unsubsidized market responses.

The concept is that equitable pricing of energy is best accomplished where consumers pay for energy used based on cost of energy when used. Energy costs are substantially higher during peak times, and lowest in the evening and winter. Smart meters capture and reward consumers for taking advantage of this timing differential.

Research shows that consumers positively react to time of use price signals, decreasing peak energy use in favor of less costly energy periods. Research shows that all classes of customers see a drop in overall utility costs where TOU meters are deployed. Even low income customers saw a decrease in utility bills under TOU metering. If true, why is this metering option not on the table?

From REU’s point of view, any decrease in demand will result in lower cash flow. The majority of REU’s cash flow is dedicated to fixed costs, and TOU metering will result in fewer dollars to support fixed costs. REU’s core value is sustainable cash flow, and TOU will negatively affect cash flow. TOU metering goes against Redding’s core policy of sustainable cash flow.

REU is reportedly investing millions in new meters. Unfortunately, Redding’s meters reportedly do not support time of use pricing. Why not? Two possible reasons: 1) Current policy supports maximizing cash flow, and 2) there is scant citizen oversight of our utility.

Moving forward, will Redding will be hobbled with technology that does not support environmentally sustainable best practice technologies? Will Redding become a solar hub? Will Redding see electric cars rapidly replacing fossil fuel vehicles? Likely not, because Redding’s energy policy supports cash flow over the environment. Charging your new EV at night will not be economically attractive. It won’t be economically rational to invest in that new EV. These unfortunate realities stem from Tuesday’s vote. This fact should be every bit as alarming as the impending loss of habitat for our feathered friends.

Two takeaways: First: Return citizen inputs into the energy policy arena. Reinstate the Redding Electric Utility Citizen Oversight Committee. Second: Vote for candidates who support positive change.

Jeff Morrow

Jeff Morrow is the operating partner of Affordable Housing Associates, and a proponent of entrepreneurial communities. Affordable Housing Associates produces accessory dwelling unit home kits, which in January will be required to be ZNE, even if located in the shade.

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