AB 813 Reduces Electricity Bills in Clean Energy Future

California's Solar may be increasingly wasted without AB 813

NRDC file

With SB 100 now on its way to Governor Brown’s desk, California is on the verge of an historic 100-percent clean electricity future. Keeping California electricity bills low is an important part of moving to renewables. A fully integrated western electricity grid will help reduce costs. Not only will it help cut pollution, it will lower Californians’ utility bills by as much as $1.5 billion annually by 2030, with annual savings continuing to grow thereafter.

The California Legislature yesterday passed SB 100 to completely eliminate carbon pollution from California’s electricity generation before the middle of the century—a groundbreaking target for  one of the world’s largest economies. To meet that groundbreaking target, and California’s other climate and clean energy goals, we need to get as much renewable energy into the transmission system as possible. Currently, our balkanized electric grid stymies that. The legislature should pass Assembly Bill 813 to help solve that problem.

Right now, management of the western grid that powers our homes and businesses is severely fragmented, with 38 separate authorities managing electricity generation and flows over 14 states, two Canadian provinces, and northern Mexico. This makes it harder and more expensive to add renewable energy generation here and elsewhere in the region, because each time the electrons flow through one of the authorities, a new charge is added.

At the same time, there are periods when California is literally throwing away increasing amounts of clean energy, enough during some months to power more than 100,000 households with pollution-free electricity.

Lack of timely access to out-of-state electricity markets is forcing California to waste growing amounts of our wind- and solar-generated electricity by switching off the generators, which is called “curtailment.” Regionalization would allow us to sell that cheap electricity to our neighbors, displacing fossil-fuel generated resources. And it would allow California to import clean, renewable electricity when we need and want more of it within our borders.

AB 813 would enable the California Independent System Operator (CAISO), by far the largest and most effective of the 38 authorities, to evolve as quickly as possible into the manager of the entire western grid. And that will enable us to get more pollution-free electricity into the system – and lower our bills as we work to meet our climate and clean energy targets.

We need the tools

I recently noted that meeting the climate challenge would take everything we have.

That is where the efficiencies inherent in a regional electricity system come in. A regional grid, as contemplated in AB 813, can shave large sums off the bill we must pay to get a handle on climate change. This is especially important as both the challenge and cost of meeting our goals gets steeper the closer we get to 100 percent clean energy.

As economist Arne Olsen, a partner in the national energy consultancy E3 explained to the California Senate Energy Committee in June:

“(A) regional grid enables easier integration of large amounts of wind and solar. California has done very well to integrate 25% renewables, but going to 50% and higher will be much, much harder. The SB 350 study found that California can achieve 60% renewables under a regional grid for the same cost as achieving 50% renewables under a California-only grid. This means lower emissions and more jobs for California workers.

California can achieve 60% renewables under a regional grid for the same cost as achieving 50% renewables under a California-only grid.

—Arne Olson, E3

Regionalization’s cost efficiencies are well known, and as studies by E3, Brattle, Berkeley Economic Advisors and Research (BEAR), and Aspen Environmental all show, we get a lot more for our money with regionalization. For example:

  • Less transmission will be needed because we plan and use the existing system better.
  • California will better use its renewable fleet, running it more, shutting it down less due to oversupply, and replacing more polluting resources elsewhere in the West.
  • Fewer power plant reserves will be needed for reliability, avoiding duplicative construction.
  • Transmission charges for remote renewables will be slashed as levies from 38 balancing authorities for access to their lines are reduced and eliminated, giving California customers a better deal on clean power.
  • Lower-cost renewable power becomes available when we need it, allowing us to more reliably reduce fossil fuel use for balancing California renewable energy and meeting a growing evening ramp. This reduces emissions from peaking power plants in impacted communities—a double bonus.

The good news is we can meet our clean energy and climate goals, and we can do it efficiently. But we must equip ourselves with the most efficient tools available to us to meet this challenge. We cannot afford to waste resources. Most importantly, we cannot afford to fail. That’s why we need AB 813.

About the Authors

Carl Zichella

Director, Western Transmission

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