Gavin Newsom Sticks It To California Ratepayers
The Ivanpah concentrated-solar project has been an environmental and economic disaster.
Launched in 2014, the $2.2 billion solar facility located 230 miles northeast of Los Angeles, was designed to produce 392 megawatts of electricity by focusing sunlight on 459-foot-high towers. At the ribbon-cutting ceremony, then-Secretary of Energy Ernie Moniz claimed the sprawling project, which covers nearly six square miles of the Mojave Desert, was a “shining example” of America’s leadership in solar energy.
But Ivanpah was a flop. It never generated more than 75% of its planned electricity output. It relies heavily on natural gas to ensure its complex generators operate properly. The juice it produces is absurdly expensive. And it has been a disaster for wildlife. Some 6,000 birds are being killed every year while flying between the mirrors and the towers. The project also required relocating endangered desert tortoises. Even the goofballs at the Sierra Club, an outfit that has never met a solar, wind, or battery project it couldn’t slobber over, have called Ivanpah a “financial boondoggle and environmental disaster.”
In January, Pacific Gas & Electric, California’s largest utility, announced it was terminating power purchase agreements it signed 15 years ago and the plant, which is operated, and partially owned by Houston-based NRG, would be shuttered and dismantled. Those contracts were expected to run through 2039. Ending the contracts, PG&E said, “will save customers money.” But last week, the California Public Utility Commission rejected the proposed shutdown and ordered the plant to stay open. Why? Shelving the project would threaten the state’s efforts to achieve its renewable energy targets. The agency also said that the transmission and distribution infrastructure that ratepayers have already paid for would be “stranded.”
What a load of crap. As one insider told me, the California Independent System Operator recently issued a forecast which showed the state will have to rely even more on imported electricity in the coming years. With the state’s goal of achieving 100% zero-carbon electricity by 2045 in jeopardy, this insider told me, the state “can’t afford to let go of any renewables no matter how uneconomic...Important to keep up appearances no matter what it costs.”
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In plumbing and electricity, shit rolls downhill. And the CPUC’s decision means California consumers will be stuck with an even bigger monthly shit sandwich thanks to Newsom’s energy policies.
Let’s do the math. Ivanpah is producing about 750,000 megawatt-hours of electricity per year. Reports show that PG&E has been paying about $180 per megawatt‑hour for the electricity from Ivanpah. For comparison, new solar PV projects can produce power for about $40 per MWh. Thus, the CPUC commissioners — all appointed by Newsom — are requiring California ratepayers to pay a premium of $140 per MWh for the juice from Ivanpah, even though they could get the same electricity from cheaper sources. Simple multiplication ($140/MWh x 750,000 MWh/yr) shows that Newsom’s minions are mandating Californians to pay $105 million per year more for electricity from Ivanpah than they should be paying.
Remember, Californians now pay the second-highest residential electricity prices in the US, some 32.6 cents per kilowatt-hour. Only Hawaiians pay more. In addition, during peak hours, consumers who rely on San Diego Gas & Electric are paying as much as 68 cents per kWh.
Furthermore, PG& E, the state’s biggest utility, has been hiking prices faster than Lance Armstrong on steroids. Last year, the CPUC approved six rate increases for the giant utility. In March, the utility asked the California Public Utility Commission for another rate increase. In October, it requested yet another increase. Even with those price hikes, it’s clear that more increases are on the way. In September, PG&E announced a $73 billion grid upgrade plan. Further, last year, the CPUC issued a report predicting that the state’s electricity rates would soar over the next few years.
Who will bear the brunt of those cost increases? It won’t be Governor Good Hair, (estimated net worth: $30 million) who has launched his presidential campaign for 2028, and he’s already emerged as the Democratic frontrunner. Now that he’s set his sights on the White House, Newsom suddenly cares about affordability. In June, he claimed that he is pushing for “affordable pathways for every Californian.” Earlier this week, during an appearance on The Ezra Klein Show, Newsom said, “the affordability issue in California is real.”
No kidding. California has the highest poverty rate in the US.
But there’s no hypocrite quite as loathsome as a climate hypocrite. On Klein’s podcast, Newsom bragged about how California “installed more green energy projects last year than at any time in history.” And yet, he neglected to mention that just last week, his appointees ordered Ivanpah to stay open, and in doing so, saddled California’s ratepayers with $100 million per year in excess electricity costs.
On Thursday, I talked to a longtime California political watcher who scoffed at Newsom’s rhetoric, saying, “Give me a break. He’s running for president as Mr. Affordability, but his climate policies are screwing California consumers big time.”
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