While PG&E is requesting the California Public Utilities Commission allow them a 6.5 percent electricity rate hike over the next six months, ostensibly to cover skyrocketing natural gas prices, they’re telling local citizens they’re expecting prices to drop.
In Marin County, our neighbors to the north have been listening to PG&E lobbyists criticize their county’s plan to provide 100 percent renewable energy to residents through Community Choice Aggregation. Their CCA plan, called Marin Clean Energy, will offer customers 25 percent renewable energy by 2009 twice what PG&E offers, and for the same rate. Customers who want to pay a little more can go 100 percent renewable right out of the gate. Ultimately, they’ll scale the 25 up to 51 percent by 2013, and 100 percent thereafter.
Marin argues that 100 percent renewable energy is a more fiscally responsible way to go – precisely because natural gas prices are volatile and will continue to rise. But PG&E says Marin’s plan is too risky and too costly. You can read PG&E’s critique of the plan, and Marin’s apt rebuttal, here.
But recent testimony from Dawn Weisz, MCE’s planner, sums it up pretty succinctly.
“Their [PG&E’s] main criticism is that we won’t be able to achieve the cost benefits,” Weisz told a May 23, 2008 meeting of San Francisco’s Local Agency Formation Commission, who had invited her to brief them on their CCA’s progress. Weisz said they had an independent third party analyze the CCA plan and PG&E’s critique.
The analyst found a key flaw in PG&E’s logic. “They’re using a gas forecast that assumes gas will be 14 percent cheaper in 12 years,” Weisz said.
At this, the entire LAFCO board broke out in laughter. Any sane person knows that isn’t going to happen. As Weisz pointed out, natural gas prices rose an average of 30 percent over the last five years, and as the San Francisco Chronicle reported today, they’re 63 percent higher than they were a year ago. Natural gas is a fossil fuel just like crude oil, and speculators are having their day with it, too.
But PG&E is using their estimate to contend their prices will be cheaper than MCE’s over the long run, so you best not switch services. And as we can see from the awkwardly placed chart to the left, PG&E”s rates have only and ever gone up.
As PG&E continues to cling to their fossil fuel infrastructure, and combats communities who attempt to prove viable, renewable alternatives are possible, we should expect to see PG&E pleading at the CPUC for more and more rate hikes.