Why are California Utility Bills so High?

Gee, that sounds like a dumb question, right?  After all, what Governor Jerry Brown did as one of his parting reminders is very clear. On September 10, 2018, he signed into law that power production by renewables be increased from the current 29.7% to 50% by 2026; 60% by 2030; and 100% by 2045.  He could not be satisfied that his bullet train to nowhere was actually going nowhere and would cost $77 billion, so he had to come up with some other more radically dumb idea.

According to a November 2016 report from the U.S. Energy Information Administration, titled "Capital Cost Estimates for Utility Scale Electricity Generating Plants," the estimated capital cost for advanced combustion turbine (natural gas fuel), onshore wind, and solar plants are in USD$ per kilowatt, 678, 1,877, and 2,671, respectively.  However, you need to apply a multiplier factor for California of 1.29, 1.12 and 1.11, respectively, for higher regional costs.  After adjustments one would expect a 500 megawatt (mW) power plant installation to cost about in millions USD$ 339, 1,051, and 1,482, respectively.  Apart from amortizing the capital cost, one has to include operations and maintenance costs and profit for an electric utility.  Then there is the cost of transmitting the power through overhead transmission lines.  As power is transmitted over power lines, there are losses of some of that power.

Solar (11.8%) and wind (6.2%) power account for approximately 63% of renewables.  The balance is from geothermal (5.7%), small hydropower (3.1%), and biomass (2.8%).  By the way, biomass capital cost ranges from $4,400 to $8,700 per kW, with a California regional multiplier factor of 1.08.  This means that a 500 mW biomass power plant capital cost would range from million USD$ 2,376 to 4,700.  Geothermal opportunities are less likely to be developed and hydropower requires intestinal fortitude in the California government to build reservoirs to store rainfall and gain the added benefit of hydropower. 

Natural gas combustion turbine power plants account for 43.4% of current power production in the state and the other major contributors are large hydro (17.9%) and nuclear (8.7%).  How many nuclear power plants do you think are on the drawing boards in California?  Therefore, assume that the increase in power generated by renewables for the aforementioned goals in 2026 (50%), 2030 (60%) and 2045 (100%) are to be generated by solar and wind at the current ratio. 

Chuck Devore of the Texas Public Policy Foundation and a former California State Assemblyman, reported recently on the case of Georgetown, Texas.  This community of about 75,000 wanted to go all renewables and went merrily down that Green New Deal Piper’s path.  Then they realized that the wind doesn’t blow and the sun doesn’t shine all day.  In order to compensate for the required buffer, they would need a $400 million lithium battery farm costing each household a mere $15,600 initial investment.  Batteries and solar cells and wind turbines don’t last forever. 

Assume for this exercise that overall power demand remains constant and compare capital cost percentage increase over combustion turbine.  As power demand increases, the “additional renewables effect” is exacerbated.  I will let you do the math for the marginal increased cost for the former governor’s action.  My guess is to increase rates by several hundred percent.

My new utility bill breakdown for potential charges are according to the following matrix:

Winter Season (November through May)

 

Summer Season (June through October)

Super off Peak 12 AM to 6 AM

    Off Peak         12 AM to 6 AM

    On Peak     12 AM to 6 AM

 

Super off Peak 12 AM to 6 AM

    Off Peak         12 AM to 6 AM

      On  Peak              12 AM to 6 AM

130% of Baseline Power Usage Threshold/kwh

 

130% of Baseline Power Usage Threshold/kwh

40 cents

41 cents

42 cents

 

33 cents

40 cents

62 cents

Baseline Power Usage/kwh

 

Baseline Power Usage/kwh

22 cents

24 cents

25 cents

 

16 cents

21 cents

43 cents

There are 512,000 electric vehicles currently operating in California.  When do you think they plug their cars in to recharge?  I know that if I had one I would have a timer to charge on Super Off-Peak hours.  Will they pay a premium for being over 130% of baseline power usage?  If the charging of their vehicles is included in the baseline, I doubt it.

s someone switches to an electric vehicle, more electric power is required per household.  Think of that induced additional capital cost when converting over to renewables thanks to Jerry Brown.  More power requires more power plants.  In California, currently 43.4% of electric power comes from fossil fuel, mostly methane.  The equivalent energy in methane that gets converted into electric power and transmitted from the power plant to a residence probably requires about two times the amount of energy that an internal combustion engine running on CNG.  So all you folks who pat yourselves on the back for driving a zero emissions vehicle, think twice about your hypocrisy of emitting less carbon dioxide into the environment.  Plants are cheering for you though.

About 97 cents of the current cost of gasoline in California per gallon goes to taxes.  California added some tax for nonspecific reasons since they know how elastic the price of a commodity like gasoline is there.  Included in the overall tax are federal taxes that are collected to fix our highways.  Do electric vehicles cause lesser damage to highways than those with internal combustion engines?  How do they pay “their fair share,” a favorite liberal term?

California announced how they will give free health care to all illegal immigrants.  Oh my, as in a past president’s words, see how well we have evolved.  As California continues down the fiscal slippery slope to bankruptcy, thank your past governor for his contributions to it.  Also, thank your neighbor with his electric vehicle for contributing to your utility bill increased rates.

Gee, that sounds like a dumb question, right?  After all, what Governor Jerry Brown did as one of his parting reminders is very clear. On September 10, 2018, he signed into law that power production by renewables be increased from the current 29.7% to 50% by 2026; 60% by 2030; and 100% by 2045.  He could not be satisfied that his bullet train to nowhere was actually going nowhere and would cost $77 billion, so he had to come up with some other more radically dumb idea.

According to a November 2016 report from the U.S. Energy Information Administration, titled "Capital Cost Estimates for Utility Scale Electricity Generating Plants," the estimated capital cost for advanced combustion turbine (natural gas fuel), onshore wind, and solar plants are in USD$ per kilowatt, 678, 1,877, and 2,671, respectively.  However, you need to apply a multiplier factor for California of 1.29, 1.12 and 1.11, respectively, for higher regional costs.  After adjustments one would expect a 500 megawatt (mW) power plant installation to cost about in millions USD$ 339, 1,051, and 1,482, respectively.  Apart from amortizing the capital cost, one has to include operations and maintenance costs and profit for an electric utility.  Then there is the cost of transmitting the power through overhead transmission lines.  As power is transmitted over power lines, there are losses of some of that power.

Solar (11.8%) and wind (6.2%) power account for approximately 63% of renewables.  The balance is from geothermal (5.7%), small hydropower (3.1%), and biomass (2.8%).  By the way, biomass capital cost ranges from $4,400 to $8,700 per kW, with a California regional multiplier factor of 1.08.  This means that a 500 mW biomass power plant capital cost would range from million USD$ 2,376 to 4,700.  Geothermal opportunities are less likely to be developed and hydropower requires intestinal fortitude in the California government to build reservoirs to store rainfall and gain the added benefit of hydropower. 

Natural gas combustion turbine power plants account for 43.4% of current power production in the state and the other major contributors are large hydro (17.9%) and nuclear (8.7%).  How many nuclear power plants do you think are on the drawing boards in California?  Therefore, assume that the increase in power generated by renewables for the aforementioned goals in 2026 (50%), 2030 (60%) and 2045 (100%) are to be generated by solar and wind at the current ratio. 

Chuck Devore of the Texas Public Policy Foundation and a former California State Assemblyman, reported recently on the case of Georgetown, Texas.  This community of about 75,000 wanted to go all renewables and went merrily down that Green New Deal Piper’s path.  Then they realized that the wind doesn’t blow and the sun doesn’t shine all day.  In order to compensate for the required buffer, they would need a $400 million lithium battery farm costing each household a mere $15,600 initial investment.  Batteries and solar cells and wind turbines don’t last forever. 

Assume for this exercise that overall power demand remains constant and compare capital cost percentage increase over combustion turbine.  As power demand increases, the “additional renewables effect” is exacerbated.  I will let you do the math for the marginal increased cost for the former governor’s action.  My guess is to increase rates by several hundred percent.

My new utility bill breakdown for potential charges are according to the following matrix:

Winter Season (November through May)

 

Summer Season (June through October)

Super off Peak 12 AM to 6 AM

    Off Peak         12 AM to 6 AM

    On Peak     12 AM to 6 AM

 

Super off Peak 12 AM to 6 AM

    Off Peak         12 AM to 6 AM

      On  Peak              12 AM to 6 AM

130% of Baseline Power Usage Threshold/kwh

 

130% of Baseline Power Usage Threshold/kwh

40 cents

41 cents

42 cents

 

33 cents

40 cents

62 cents

Baseline Power Usage/kwh

 

Baseline Power Usage/kwh

22 cents

24 cents

25 cents

 

16 cents

21 cents

43 cents

There are 512,000 electric vehicles currently operating in California.  When do you think they plug their cars in to recharge?  I know that if I had one I would have a timer to charge on Super Off-Peak hours.  Will they pay a premium for being over 130% of baseline power usage?  If the charging of their vehicles is included in the baseline, I doubt it.

s someone switches to an electric vehicle, more electric power is required per household.  Think of that induced additional capital cost when converting over to renewables thanks to Jerry Brown.  More power requires more power plants.  In California, currently 43.4% of electric power comes from fossil fuel, mostly methane.  The equivalent energy in methane that gets converted into electric power and transmitted from the power plant to a residence probably requires about two times the amount of energy that an internal combustion engine running on CNG.  So all you folks who pat yourselves on the back for driving a zero emissions vehicle, think twice about your hypocrisy of emitting less carbon dioxide into the environment.  Plants are cheering for you though.

About 97 cents of the current cost of gasoline in California per gallon goes to taxes.  California added some tax for nonspecific reasons since they know how elastic the price of a commodity like gasoline is there.  Included in the overall tax are federal taxes that are collected to fix our highways.  Do electric vehicles cause lesser damage to highways than those with internal combustion engines?  How do they pay “their fair share,” a favorite liberal term?

California announced how they will give free health care to all illegal immigrants.  Oh my, as in a past president’s words, see how well we have evolved.  As California continues down the fiscal slippery slope to bankruptcy, thank your past governor for his contributions to it.  Also, thank your neighbor with his electric vehicle for contributing to your utility bill increased rates.