Sempra To Give Record Profits To Investors On Heels of SDG&E Customer Bill Spikes

Sempra Energy, the parent company of San Diego Gas & Electric, is paying out its highest profits ever to its investors this month.

The payout to investors on Friday comes on the heels of a massive spike in bills for many SDG&E customers, who already shoulder the highest per-unit electricity prices in the country. SDG&E executives blamed inflation and an unusual spike in the cost of natural gas for the higher utility bills. The spikes came after the utility raised its rates for the year.

The payout also comes as consumer advocates say SDG&E’s rates and profit margins, which the utility is negotiating with a state regulator, are too high.

Sempra, whose subsidiaries include SDG&E and SoCalGas, made more money in 2021 than in 2020, bringing in $2.64 billion compared to $2.34 billion, according to a February earnings report. The company’s Texas utility and its subsidiary focused on infrastructure provided most of the growth in earnings, although SDG&E makes the most money for Sempra.

SDG&E brought in earnings of $819 million in 2021, a slight decline from its earnings of $824 million in 2020.

After the report came out, the value of the Sempra stock rose sharply and reached a record high of $170.76 on April 1.

Investors will get $1.145 for each share they own, up from $1.10 in 2021. Over the year, the company projects the dividend per share to be $4.58, more than ever before and the 12th consecutive annual increase.

CEO Jeffrey Martin touted a “long-standing commitment to return value to our shareholders” during an investor call in February.

In an emailed statement, Sempra spokesperson Patricia Kakridas said that “every investment is made with our consumers best interest in mind,” citing the company’s efforts to strengthen grid security and reliability.

Kakridas did not respond to questions from inewsource regarding how Sempra would make it easier for customers feeling pressure from the high price of electricity.

The steady increase in dividends is on par with those paid out by Edison International, which owns Southern California Edison, the utility supplying much of Southern California. The company paid out $0.70 per share to investors in January.

Pacific Gas & Electric Co. will pay its first dividends in May after a four-year pause following a series of wildfires sparked by its faulty equipment.

Edward Lopez, the executive director of the Utility Consumers’ Action Network, said the record dividends showed that SDG&E is profitable for its investor, Sempra.

“Unfortunately, those profits are borne upon the backs of SDG&E customers,” Lopez said.

Lopez said he wished that the California Public Utilities Commission, which regulates investor-owned utilities, would take note of the record payouts to investors when considering the utilities’ demands for higher rates.

He said his organization had received many calls from people looking for relief from high bills.

Betty Thompson, who’s lived in Fallbrook since 1989, is currently negotiating with SDG&E over a roughly $200 spike in her bill in December and January, even though she was traveling and out of the home for most of the time. Thompson called the bill “ridiculous,” noting that customers don’t have options to get electricity elsewhere.

“We’re stuck with it,” Thompson said.

“I hope there’ll be enough protests against the company that they will not get a raise in their rates,” she added.

SDG&E will determine its rates after it outlines its upcoming costs to the utilities commission in a state-mandated proceeding no later than May 16.

Click here to read the full article at KPBS

PG&E to file for bankruptcy following devastating California wildfires

A home burns as the Camp fire tears through Paradise, California on November 8, 2018. - More than 18,000 acres have been scorched in a matter of hours burning with it a hospital, a gas station and dozens of homes. (Photo by Josh Edelson / AFP) (Photo credit should read JOSH EDELSON/AFP/Getty Images)

California’s largest power company intends to file for bankruptcy as it faces tens of billions of dollars in potential liability after massive wildfires devastated parts of the state over the past two years, according to a filing with the Securities and Exchange Commission.

Pacific Gas and Electric said Monday that declaring insolvency is “ultimately the only viable option to restore PG&E’s financial stability to fund ongoing operations and provide safe service to customers.”

The California wildfires, which have killed dozens of people and destroyed thousands of homes, have led to a surge in insurance claims. PG&E estimates that it could be held liable for more than $30 billion, according to the SEC filing, not including potential punitive damages, fines or damages tied to future claims. The company’s wildfire insurance for 2018 was $1.4 billion.

The PG&E bankruptcy promises to be more complex and political than most bankruptcies, pitting fire victims, ratepayers, bankers, insurance companies and renewable-energy providers against one another. Homeowners with property insurance will collect from their insurers, and a person familiar with the bankruptcy planning said that hedge funds are already offering to buy settlement claims from insurance companies. …

Click here to read the full article from the Washington Post

Will Regulators Break Up Scandal-Plagued PG&E?

VENTURA, CA - DECEMBER 5: A home is destroyed by brush fire as Santa Ana winds help propel the flames to move quickly through the landscape on December 5, 2017 in Ventura, California. (Photo by Marcus Yam / Los Angeles Times via Getty Images)

A California Public Utilities Commission report that Pacific Gas & Electric failed to fulfill its responsibilities to properly maintain natural gas lines from 2012 to 2017 even after a natural gas explosion killed eight people in San Bruno in 2010 may be the last straw for state regulators.

On Dec. 21, the CPUC released a dramatic statement saying it would consider drastic steps to address the “serious safety problems” it says the utility has long condoned. The commission said a break-up of the agency into smaller regional utilities or a state takeover would be among the possible changes it examined.

“This process will be like repairing a jetliner while it’s in flight. Crashing a plane to make it safer isn’t good for the passengers,” said CPUC President Michael Picker. “This is not a punitive exercise. The keystone question is would, compared to PG&E and PG&E Corp. as presently constituted, any of the proposals provide Northern Californians with safer natural gas and electric service at just and reasonable rates.”

CPUC looking at seven possible major changes

The CPUC statement said seven possible changes would be considered.

– Having “some or all of PG&E be reconstituted as a publicly owned utility or utilities.”

– Replacing some members of PG&E’s Board of Directors with members “with a stronger background and focus on safety.”

– The replacement of existing corporate management.

– Adoption of a new corporate management structure with regional leaders overseeing regional subsidiaries.

– Linking PG&E’s “return on equity” – the profits it shares with its investor-owners – to its safety performance.

– Breaking the utility’s natural gas operations and its electric transmission operations into separate companies.

– Ending the arrangement in which PG&E is controlled by a holding company so it becomes “exclusively a regulated utility.”

Picker’s statement was a remarkable turnaround from his comments on Nov. 15, when his upbeat remarks about the ability of PG&E to survive its fourth consecutive year of devastating wildfires in Northern California led the utility’s stock price tospike.

It reflected the anger among CPUC officials over a staff report released Dec. 14 that found the utility had systematicallyneglected natural gas infrastructure despite being fined $1.6 billion and convicted of six felonies in federal court over the 2010 disaster in San Bruno, a suburb of San Francisco.

Utility facing 500 lawsuits relating to fires it may have caused

Even if PG&E survives in something like its present form after the CPUC’s review, its future is still very cloudy.

Because of claims that PG&E was responsible for the devastating Camp Fire that killed 85 people in Butte County in November, U.S. District Judge William Alsup announced he was reviewing whether PG&E had violated terms of its federal probation in the San Bruno case.

PG&E also disclosed to the U.S. Securities and Exchange Commission that it is facing roughly 500 lawsuits with more than 3,100 plaintiffs over claims the utility was responsible for many of the dozens of wildfires in Northern California since 2016.

It is also facing wildfire-related lawsuits from the state Office of Emergency Services, Cal Fire, Calaveras County and other government agencies.

But while the CPUC is apparently ready for major changes at the utility, it’s not clear yet how state lawmakers feel.

On Nov. 19 – even as criticism of PG&E swelled as confirmed deaths grew in the Camp Fire – Assemblyman Chris Holden, D-Pasadena, was reported to be considering introducing legislation to help the utility deal with wildfire costs.

Holden helped pass a law earlier this year that allowed PG&E to spread out the costs from the liabilities it faced from 17 wildfires in 2017.

This article was originally published by CalWatchdog.com

Reduce Wildfire Damage and Lower Energy Bills by Freeing Up Markets

Power electricShortly before wildfires such as the Camp and Woolsey fires ravaged Northern and Southern California, respectively, Gov. Jerry Brown signed a contentious bill making it easier for the state’s investor-owned utilities — primarily, Pacific Gas & Electric, Southern California Edison and San Diego Gas and Electric — to recover wildfire costs from ratepayers, but don’t expect the flames to die down anytime soon.

The legislation arose out of the calamitous wildfires the state has experienced the past couple of years and utilities’ fears about their abilities to cover potentially billions of dollars in damages. PG&E faces a possible $15 billion liability for wildfires that wreaked havoc on Northern California’s wine country last year, and contends that it might be forced into bankruptcy if the California Public Utilities Commission does not allow it to cover the costs with rate increases on consumers. Senate Bill 901, authored by state Sen. Bill Dodd (D-Napa), largely sidestepped the broader reforms Gov. Brown had sought to reduce liability exposure for the utilities.

California law is unusual in that utilities may be held liable for fire damage caused by their equipment even if they were not negligent in maintaining it and followed all safety rules (such as wind blowing a tree down onto power lines and sparking a blaze). SB 901 did, however, direct the CPUC to consider PG&E’s financial status in deciding its liability for the 2017 fires, and may allow the company to pass along costs it cannot financially bear (however that is determined) in the form of bonds to be paid by ratepayers over time.

The legislation also requires utilities to beef up protections of their equipment, and provides some much-needed relaxing of logging restrictions on private land. A greater focus on wildfire prevention efforts such as removing excess fuel through vegetation clearing and controlled burns is also long overdue, and will be funded to the tune of $200 million a year for five years from the state’s cap-and-trade fund. Environmental policies preventing thinning to keep forests in a “natural” state, as well as drought conditions and a bark beetle infestation that have killed millions of trees, have created tinderbox conditions and significantly exacerbated wildfire damage. The money would go a lot farther, though, if the forest-thinning services were competitively bid instead of just doled out to Cal Fire.

In fact, privatization of wildfire services in general would likely substantially reduce costs. Approximately 40 percent of all wildfire services are already provided by the private sector, according to the National Wildfire Suppression Association, which represents more than 250 companies in 27 states employing about 10,000 private firefighters and support personnel.

The state should also stop interfering in insurance markets. An August study prepared for the California Natural Resources Agency by the RAND Corporation and Greenware Tech noted that insurers complain that the California Department of Insurance prevents them from using probabilistic wildfire models to project future losses and has not allowed them to raise homeowners insurance rates high enough to cover the full risk-based cost of policies in high-risk areas, which would discourage building in the most fire-prone locations.

Despite the significant risk to which it exposes investor-owned utilities in the state, strict liability is probably appropriate under the existing regulatory system. It is the same compensatory standard to which governmental agencies are held, and, as the state courts have noted, the eminent domain powers granted to electric utility companies under the Public Utilities Code and the government-protected monopolies under which they operate make them more akin to public agencies than unfettered private companies. Under such a system, where utilities face no competition and property owners cannot opt out if they are targeted for eminent domain action, it makes sense to spread the costs of wildfires among the utilities and their customers, who all share the benefits of the utilities’ electricity generation and transmission infrastructure.

That said, the existing regulatory system is at fault for creating “too big to fail” regional utility monopolies in the first place. A central planning commission that grants monopoly rights and dictates prices and “acceptable” profit levels sounds more characteristic of a socialist or totalitarian state like North Korea or the Soviet Union, but that is the state of energy markets in California.

A better solution would be to open up competition by eliminating regional government-granted energy monopolies with eminent domain powers and treating the provision of electricity like other goods and services. Fully privatizing the energy and insurance markets and eliminating government monopoly protections would do much more to reduce energy costs, increase innovation and reduce losses from wildfire damage than any measures currently being discussed in Sacramento.

esearch fellow at the Oakland based Independent Institute.

This article was originally published by Fox and Hounds Daily

PG&E May Need Bailout to Survive Latest Wildfire

Camp FireHow much of wildfire costs not covered by insurance should be paid by California’s giant investor-owner utilities has been a significant issue since at least 2007. That’s when wildfires ravaged northern and eastern San Diego County, killing two people and destroying more than 1,300 homes.

San Diego Gas & Electric argued that it should be allowed to pass on $379 million in related costs. But the California Public Utilities Commission and state courts – noting the evidence that poorly maintained equipment had been blamed for much of the damage in two state investigations – have rebuffed SDG&E. The utility’s most recent setback came just last week when the state 4th District Court of Appeal in San Diego rejected a call to overturn previous rulings.

But during SDG&E’s long fight for a utility-favorable interpretation of liability laws, the debate has become far more high-profile. With six of California’s all-time 10 worst wildfires occurring since September 2015 in areas served by Pacific Gas & Electric and Southern California Edison, the question of what to do to keep the state’s two largest investor-owned utilities in business has emerged as one of the thorniest, most contentious issues in Sacramento.

Now, with Northern California reeling from its deadliest fire ever in Butte County, and with a large area of Ventura County and northwest Los Angeles County ravaged in the past two weeks, PG&E and Edison are confronted with a perverse twist on their successful efforts to get the Legislature to give them relief from huge wildfire costs.

Law protecting utilities doesn’t take effect until Jan. 1

Senate Bill 901 – the main measure passed in late summer to insulate utilities from the extreme costs of fires – doesn’t take effect until Jan. 1. That means its provisions to limit utilities’ liabilities if it could be shown they properly maintained their equipment in fire-prone wilderness areas won’t help PG&E or Edison with this fall’s blazes.

Instead, the old standard that led to negative rulings against SDG&E will be used in assessing damages. Given that utilities’ equipment is blamed for helping start the latest round of wildfires, that could be apocalyptic for the finances of PG&E. As of Monday afternoon, the Camp Fire had killed 77, with nearly 1,000 people unaccounted for, and torched 151,000 acres and nearly 13,000 structures.

In the Woolsey fire northeast of Los Angeles, three people have died, while more than 96,000 acres and 1,400-plus structures have burned.

In coming days, the focus is likely to be on how many of the missing in the Camp Fire are dead. It could end up as one of the five deadliest natural disasters in the United States in this century – nearly as lethal as Hurricane Katrina.

But eventually the focus will return to whether PG&E can survive the latest conflagrations even as it deals with potential losses in the billions from previous fires – and how much more state lawmakers and Gov.-elect Gavin Newsom should do to help the utility survive in its present condition.

Its company valuation plunged by more than one-third after the severity of the Camp fire became evident, only to jumpsomewhat late last week after the president of the state Public Utilities Commission offered supportive comments.

“It’s not good policy to have utilities unable to finance the services and infrastructure the state of California needs,” Michael Picker told Bloomberg News. “They have to have stability and economic support to get the dollars they need right now.”

PG&E has filed for Chapter 11 bankruptcy before, in April 2001, when the utility was squeezed by sky-high energy costs after the blackouts of winter 2000-2001. It emerged from bankruptcy three years later.

Lawmakers have little goodwill for ‘criminal’ PG&E

But a huge scandal since then has left Northern California lawmakers with less goodwill toward the 113-year-old utility, whatever Picker’s views and whatever their willingness to pass SB901.

In 2010, a PG&E transmission line exploded in the San Francisco suburb of San Bruno, leaving eight dead and destroying 38 homes. In 2017, a federal judge found the utility guilty of five felonies for its failings to safely maintain the gas line, and a sixth felony for obstructing the National Transportation Safety Board’s investigation into the disaster.

Sen. Jerry Hill, D-San Mateo, routinely refers to PG&E as a “criminal” institution. Last week, he renewed his call to break up the utility, saying it could no longer be trusted to act in the interest of public safety.

PG&E shares closed at $23.26 in Monday trading. That was down 58 percent from its 52-week high of $55.66.

This article was originally published by CalWatchdog.com

Power company under pressure to explain actions before California wildfire

Power electricSome victims of California’s worst-ever wildfire are asking why the state’s largest utility didn’t shut off power in areas that were at high risk. The death toll from the Camp Fire is up to 77, and that number is likely to rise.

Nearly 1,000 other people are unaccounted for. In 11 days, the fire has destroyed more than 10,000 homes north of Sacramento, the state’s capital.

Pacific Gas & Electric said two of its power lines failed in areas where the fire broke out a short time before the first flames were reported. It highlighted one failure the day the fire began but then waited more than a week to report the second until more information was available.

PG&E said the fire forecast did not meet the criteria for a “public safety power shutoff.” The cause of the fire is still under investigation. …

Click here to read the full article from CBS News

Protecting taxpayer interests in the fire liability fight

Thomas FireOne of the most contentious political battles currently being waged in Sacramento during the final two weeks of the legislative session is over the extent to which investor-owned utilities, such as Pacific Gas & Electric, should be held liable and have to compensate property owners for the damage inflicted by the horrendous wildfires that are still burning across the state. Average California taxpayers and homeowners probably sense this is a big deal because of extensive media coverage, but may not know what to think about it.

Here’s what’s going on.

First, there is little dispute that the number of wildfires and their intensity has increased dramatically in recent years. Investor-owned utilities, including PG&E as well as San Diego Gas & Electric, have been forced into big legal settlements because many fires were allegedly caused by electrical wires or other equipment. The utilities, however, have attempted to shift some of the blame to natural causes such as climate change, which they argue produces the conditions for more catastrophic fires. (More recently, blame has also been placed at California’s mismanagement of public lands, which is undoubtedly a contributing cause).

Determining liability for wildfires is such a hot issue — no pun intended — because of the amount of money involved. San Diego Gas & Electric was facing more than 2,500 lawsuits and thus paid $2.4 billion in settlements for its role in three 2007 fires that burned over 1,500 homes, took human lives and burned 368,316 acres in San Diego County. Fires still burning as this column is being written have inflicted even greater damage and loss of life.

These damages have rocked PG&E and SDG&E.  According to a January blog post from the Energy Institute at Hass, California utilities lost $20 billion in market capitalization after last year’s fires.

In an effort to lessen their liability, the utilities say a constitutional doctrine called inverse condemnation has compelled them to settle lawsuits from property owners, firefighting agencies and local governments. They believe the doctrine entitles them to recoup some of the expenses by raising rates, but California’s Public Utility Commission has balked.

Although the utilities’ efforts to offload some of their liability for fire damage is understandable, taxpayer advocates are opposing the shift as it diminishes their own property rights.  The Howard Jarvis Taxpayers Association views limited taxation on property as a natural extension of property rights generally.  For example, following the infamous Kelo v. New London decision by the United States Supreme Court allowing the use of eminent domain for private-to-private transfers of property, HJTA fought for both a state constitutional, as well as statutory, prohibition of those takings.  Other property-rights issues of major concern to taxpayer advocates include the attempt to expand rent control in California and ensuring that just compensation is paid to property owners for traditional exercises of eminent domain, especially for boondoggle projects like California’s High Speed Rail project. …

Click here to read the full article from the Pasadena Star News

PG&E Seeks Protection From Costs of Wildfires They Cause

A wildfire rages in Buck Meadows, in the Yosemite National ParkCalifornia’s three large investor-owned utilities are renewing efforts to allow them to make ratepayers cover the costs of wildfires that authorities blame on utilities’ mistakes or poor maintenance.

Pacific Gas & Electric officials made this clear last week when they announced they expected to have at least $2.5 billion in liabilities from the wildfires that scarred the wine country of Northern California last October. That sum is only for 12 relatively small blazes that the state blames on PG&E’s failure to maintain equipment and clear brush near power lines. Authorities are still looking at what caused the biggest blaze – the Tubbs fire – which torched more than 3,000 homes in Sonoma County and is blamed in the deaths of 22 people.

PG&E CEO-President Geisha Williams used a conference call with analysts to make the case for state legislation to protect electricity utilities from bankruptcy in an era in which huge wildfires – blamed on hotter, drier weather – are more common than ever. PG&E only has an estimated $840 million in insurance coverage to deal with the 200 and counting lawsuits from the wine country conflagrations.

Williams said “flawed” state laws made utilities responsible for fire risks that were beyond their control. But in a decision-making process that began last summer – before the wine country blazes – and ended after they were finally put out, the California Public Utilities Commission rejected a similar argument put forward by San Diego Gas & Electric. In August, CPUC staff recommended that commissioners reject an SDG&E request to pass along to ratepayers $379 million in unrecovered costs from 2007 wildfires that ravaged San Diego County. After three months of wavering, the CPUC board voted unanimously in late November to deny the request.

Williams said negative media coverage of the October fires complicated utilities’ efforts to get help from the California Legislature. But some utility watchdogs are still wary of state lawmakers, whom they see as sending out mixed signals on wildfire liabilities.

On the one hand, the state Senate voted 39-0 in May and an Assembly committee voted 15-0 last week for Senate Bill 819. It would ban the CPUC from allowing utilities to pass along to ratepayers the costs of fines or penalties as well as the cost of damages that were “caused” by a utility’s infrastructure. Only costs the CPUC deems “just and reasonable” can be shifted from shareholders to ratepayers under the legislation. PG&E and Southern California Edison expressed “concerns” about the bill without formally opposing it, according to a legislative analysis.

Benign bill pushing responsibility – or stealth bailout?

But another bill that had similarly lopsided support in the Senate is drawing a very mixed response. Senate Bill 1088 passed the Senate 34-2 in late May and survived an Assembly committee vote last week with eight lawmakers in support, two in opposition and five declining to vote.

It would require utilities “to submit a safety, reliability and resiliency plan to the California Public Utilities Commission every two years.” It would also require the state Office of Emergency Services “to adopt standards for reducing risks from a major event and requires the office to update the standards at least once every two years.”

Supporters – including PG&E, SDG&E, labor unions and some counties hit hard by last year’s blazes – depict the measure as a benign attempt to make sure utilities are prepared to handle their responsibilities.

But critics see the language requiring the state to regularly “update” how it evaluates risks posed by the biggest blazes as potentially giving legal ammunition to the utilities – specifically, to their arguments that emerging, more dangerous conditions should change what costs can be shifted on a “fair and reasonable” basis to ratepayers.

Formal opponents of SB1088 include groups which have standing to challenge utilities’ proposed rate hikes (The Utility Reform Network and the Office of Ratepayer Advocates); business interests (the California Manufacturers and Technology Association, the Western States Petroleum Association and farm groups); and green activists (most notably the California Environmental Justice Alliance).

This article was originally published by CalWatchdog.com

Brexit’s Energy Lesson for California

Brexit“California’s largest utility and environmental groups announced a deal Tuesday [June 21] to shutter the last nuclear power plant in the state.” This statement from the Associated Press reporting about the announced closure of the Diablo Canyon nuclear power plant should startle you. The news about shutting down California’s last operating nuclear power plant, especially after Pacific Gas & Electric Co. (PG&E) had sought a 20-year extension of the operating licenses for the two reactors, is disappointing—not startling. What should pique your ire is that the “negotiated proposal,” as the Wall Street Journal called it, is between the utility company and environmental groups—with no mention of the regulators elected to insure that consumers have efficient, effective and economical electricity.

Who put the environmental groups in charge? Not the California voters. But unelected environmental groups—and their bureaucratic friends in various government agencies—have been dictating energy policy for the most of the past decade. Regarding the “negotiated proposal,” WSJ points out: “The agreement wades deeply into intricate energy procurement, environmental and rate-setting matters that are normally the exclusive jurisdiction of state agencies.”

California has a goal of generating half of its electricity from renewable sources by 2030 and environmental groups are calling for the state officials to replace Diablo’s generating capacity with “renewable power sources.” Realize that this one nuclear power plant provides twice as much electricity as all of California’s solar panels combined.

Bloomberg Intelligence analysts’ research concluded that PG&E “would need 10,500 megawatts of new solar installations to replace all of Diablo Canyon’s output” and that, without including potential costs of new transmission lines or back-up resources for solar, will cost $15 billion—with totals, including decommissioning, estimated at $20 billion.

The Bloomberg report states: “PG&E will ask that customers make up any shortfall.”

Actual costs, Bloomberg says: “could be lower because the company expects to compensate for lower demand and replace only part of the production.” Why will there be lower demand? The WSJ explains: “the plan calls for new power sources to furnish only a portion of the electricity that Diablo Canyon generates, assuming that greater energy efficiency in the future will also curb some power demand.”

All of this is announced while California is experiencing, and expecting more, blackouts due to “a record demand for energy” and because “there just aren’t enough gas pipelines for what’s needed,” according to CNN Money. “Southern California,” reports WSJ, “is vulnerable to energy disruptions because it relies on a complex web of electric transmission lines, gas pipelines and gas storage facilities—all running like clockwork—to get enough electricity. If any piece is disabled, it can mean electricity shortages. Gas is the state’s chief fuel for power generation, not coal. But the pipelines can only bring in about 3 billion cubic feet of working gas a day into Southern California, below the daily demand, which gets as high as 5.7 billion cubic feet.”

California’s Independent System Operator, which runs the state’s power grid, therefore, has warned of “significant risk” that there may not be enough natural gas which could result in “outages for as many as 14 summer days.” CNN Money reports: “Natural gas has played a bigger role for California as the state has tried to phase out coal and nuclear power”—environmental groups oppose the use of all of these three power sources.

It is expected that Diablo Canyon’s generating capacity will, in part, be replaced with more natural gas—which is good news for fracking. Eric Schmitt, vice president of operations for the California Independent System Operator, said: “California needs more flexibility in how it generates power so it can balance fluctuating output from wind and solar projects. Gas plants can be turned off and on quickly.”

As coal-fueled electricity has been outlawed in California, and environmental groups have pushed to close nuclear power plants, and routinely block any new proposed natural gas pipelines, black outs will become frequent. California’s energy demand doesn’t match solar power’s production.

This dilemma makes “energy efficiency” a key component of the environmental groups’ decrees—which parallels the European Union’s policies that were a part of Britain’s “exit” decision (known as “Brexit”).

When the EU’s energy efficiency standards for small appliances were first proposed, then German EU energy commissioner, Gunther Oettinger, according to the Telegraph, said: “All EU countries agree energy efficiency is the most effective method to reduce energy consumption and dependence on imports and to improve the climate. Therefore there needs to be mandatory consumption limits for small electrical appliances.” In 2014, the EU, in the name of energy efficiency, sparked public outcry in Britain when it banned powerful vacuum cleaners with motors above 1600 watts. It then proposed to “ban high powered kettles and toasters” as part of the “Eco-design Directive” aimed at reducing the energy consumption of products.

The EU’s Eco-design Directive’s specific requirements are to be published as “Implementing Measures”—which, according to Conformance.co.uk, are made “as European Law Commission Regulations.” It explains that this process allows the directives to “enter into force in all the member states without requiring a transcription process in their National Law. Thus they can be issued much more quickly than the usual Directive Process.”

When the EU’s high-powered toaster/tea-kettle ban was announced, it became “a lightning rod for public anger at perceived meddling by Brussels”—which was seen as “intruding too much into citizens’ daily lives.” When the ban was announced, retailers reported a spike, as high as 95 percent, in toaster and electric tea-kettle sales. The European overreach became such ammunition in Britain’s Brexit referendum, that Brussels stalled the ban until after the election and engaged in a now-failed public relations exercise with “green campaigners” to speak out in favor of the toaster and tea-kettle regulations that were believed to have “considerable energy saving potential.”

The Brits didn’t buy it. It is reported that top of the list for “leave” voters were “EU Rules and Regulations.” Matthew Elliot, chief executive of the Vote Leave campaign said: “If we vote remain we will be powerless to prevent an avalanche of EU regulations that Brussels is delaying until after the referendum.”

Brussels’ toaster and tea-kettle ban, which were perceived as an assault on the British staples, has been called “bonkers” and “too barmy to be true.” Specifically addressing the ban, Elliot said: “The EU now interferes with so many aspects of our lives, from our breakfast to our borders.” David Coburn, a UK Independence party MEP from Scotland, who recently bought a new toaster and tea kettle grumbled: “I think I must have bought a euro-toaster, I have to put bread in it five times and it’s still pale and pasty. Perhaps it’s powered by windmills. And the kettle? Watching a kettle boil has never been so boring.”

While energy efficiency directives banning Keurig coffee makers would be more likely to draw similar ridicule from Californians, there is a lesson to be learned from the Brexit decision: too much regulation results in referendums to overturn them. It is widely believed that, with Brexit and new leadership, many of the EU’s environmental regulations, including the Paris Climate Agreement, will be adjusted or abandoned.

More and more Americans are reaching the same conclusion as our British cousins about the overreach of rules and regulations. As Coburn concluded: “What we want is to let the free market reign, not this diktat by bureaucrat.”

The author of Energy Freedom, Marita Noon serves as the executive director for Energy Makes America Great Inc., and the companion educational organization, the Citizens’ Alliance for Responsible Energy (CARE). She hosts a weekly radio program: America’s Voice for Energy—which expands on the content of her weekly column. Follow her @EnergyRabbit.

PG&E slapped with record $1.6 billion penalty for fatal San Bruno explosion

As reported by the San Jose Mercury News:

SAN FRANCISCO — State regulators slapped PG&E with a record-setting $1.6 billion penalty Thursday for causing the fatal gas-pipeline explosion in San Bruno more than four years ago, after a hearing marked by emotional statements from victims of the blast and sharp words about continued flaws in the utility’s safety record.

“PG&E is safer. But I just don’t believe PG&E is safe enough,” Michael Picker, president of the state Public Utilities Commission, told this newspaper in an interview after the PUC voted 4-0 to levy the penalty. Citing numerous lapses involving PG&E’s sprawling natural gas pipeline system since the 2010 San Bruno explosion, Picker said he was ordering the PUC to conduct a wide-ranging probe into PG&E’s safety culture.

Thursday’s hearing and the contentious process that led up to it brought almost as much scrutiny and criticism of the PUC as it did of PG&E. Federal regulators sharply criticized how …

Click here to read the full story