CVIndependent

Sun12152019

Last updateTue, 18 Sep 2018 1pm

Between last year’s deadly wildfires and this summer’s fatal blazes, utilities and insurers with a huge stake in fires’ aftermath have poured more than $3.2 million into California campaign donations, and another $5.2 million into lobbying at the state Capitol—a big spike.

Also fiercely lobbying on wildfire bills: plaintiffs attorneys, local governments and electrical worker unions.

Now, in the final weeks of the Legislature’s session, lawmakers on a special wildfire committee are considering proposals to beef up safety of the electrical system and change liability laws. CALmatters reviewed new lobbying and campaign finance reports covering the first six months of the year. The takeaways:

Lobbying is up—by a lot: The state’s three big electric utilities together more than doubled their spending on lobbying during the first half of this year, compared with the same period last year. The increase was driven largely by Pacific Gas and Electric, which spent $2.2 million on lobbying this year—triple what it spent in the first half of 2017.

Between April and June this year, PG&E reported spending $1.1 million specifically lobbying on wildfire legislation.

“This is really the biggest issue facing our company today,” said PG&E spokeswoman Lynsey Paulo, adding that PG&E pays for lobbying expenses with shareholder funds, not money from customers.

At issue: Who should be responsible for and pay for fire damages? Under existing law, utilities are liable if fires are traced to their equipment—even if there’s no negligence. Gov. Jerry Brown has proposed changing the law to relieve utilities of some liability—protection they desperately want.

Edison, which provides power to much of Southern California, including much of the Coachella Valley, spent $1.3 million lobbying in the first half of this year—double what it spent last year.

Insurance companies are the utilities’ main adversary in this: If utilities become less liable, insurers will have to bear more of the costs from disasters. Insurance trade associations increased their spending on lobbying in the state Capitol by 51 percent this year over last.

There’s a whole lotta wining and dining going on: Most of the money utilities and insurance companies spent on lobbying went to lobbyists, lawyers and publicity campaigns. But the total also includes a lot of cocktails and steaks the companies bought for government officials they are trying to influence—nearly $69,000 worth of goodies for the first half of this year.

PG&E treated GOP Sen. Anthony Cannella of Ceres and six of his staff members to a San Francisco Giants game in May. In July, Cannella was appointed to the committee crafting wildfire legislation. He declined to comment for this story.

Overall, PG&E spent more than $3,000 entertaining government officials, including a breakfast in February for Sen. Bill Dodd, a Napa Democrat who is co-chair of the wildfire committee, and a lunch in June for Todd Derum, chief of the Sonoma division of Cal Fire, the agency investigating last year’s fires. Cal Fire has said PG&E’s equipment was involved in 16 fires, and that in 11 of those, the company violated state safety codes. Cal Fire has not yet completed its investigation of the deadliest blaze, known as the Tubbs Fire.

Edison spent more than $45,000 entertaining officials. That included a $12,000 reception in January attended by more than 100 legislators and staff members, and a dinner in March at a Los Angeles steakhouse for Lt. Gov. Gavin Newsom, who is running for governor.

The Personal Insurance Federation of California spent $14,300 entertaining lawmakers and their staff, including an $8,500 reception in March and a $4,000 soiree at a Sacramento nightclub in April. In addition, the trade association treated officials to microbrews, sushi dinners and other goodies, such as a $53 cake for an assemblywoman’s chief of staff.

Rex Frazier, the Personal Insurance Federation lobbyist, said government decisions have a huge impact on the insurance business because it is so highly regulated. “With that,” he said, “comes relationship-building with legislators.”

The victims advocacy group is funded almost entirely by lawyers: Fire victims are lobbying to preserve liability laws and pass new rules that could help prevent future wildfires. Their advocacy group Up From the Ashes is represented by a lobbyist who lost his Santa Rosa home in the fires. The group blames PG&E and Edison for not doing enough to prevent last year’s disasters, some of which were sparked by power lines too close to branches and brush.

Up From the Ashes spent about $564,000 lobbying between April and June, with about $55,000 going to a lobbying firm and the rest to a publicity campaign. Where did the money come from? Essentially, law firms involved in lawsuits against utilities.

 “We appreciate their funding so we can have a voice,” said Patrick McCallum, the lobbyist for Up From the Ashes, which represents about 600 homeowners, businesses and local governments that lost property in last year’s fires.

It’s a bipartisan love affair: The industries involved in the fight over wildfire legislation aren’t playing favorites: They’ve showered dozens of Republican and Democratic legislators with large campaign contributions and pour huge sums into committees to elect politicians from both parties.

Edison gave $1.1 million to California political campaigns this year, including $250,000 each to the California Democratic Party and the California Republican Party. It also gave $25,000 each to a GOP group called California Trailblazers and the Democratic campaign fighting a senator’s recall. In advance of the June primary, Edison gave $29,200 each to Gavin Newsom and Antonio Villaraigosa, Democratic rivals in the gubernatorial race.

PG&E has given more than $900,000 in political donations this year, including $175,000 to the California Democratic Party and $110,000 to the California Republican Party. It’s also given $25,000 to a committee that supports moderate Republicans and $40,000 to one that supports moderate Democrats.

In addition, PG&E gave $150,000 to a campaign supporting Newsom for governor, and paid nearly $400,000 to a political consulting firm that ran Brown’s campaign for governor and is helping with Newsom’s.

The Farmers insurance company gave $96,500 to the state GOP and $10,000 each to the California Democratic Party and the Newsom campaign.

One lawmaker doesn’t want PG&E’s money: On June 4, PG&E sent $1,000 to the re-election campaign for Democratic Assemblyman Jim Wood. On June 30, he returned the money.

Wood declined to comment on why he sent back the PG&E money, instead saying through a spokeswoman that he did not solicit the donation.

But here’s a clue: He represents parts of Santa Rosa devastated by last year’s fires. Now he sits on the wildfire committee, where he’s questioning whether the Legislature should change liability laws before Cal Fire completes its investigations.

CALmatters.org is a nonprofit, nonpartisan media venture explaining California’s policies and politics.

Published in Politics

For more than a century, monopoly electric utilities have nurtured the West. They fed the mines and the mills, and now deliver the juice to our thirsty digital devices and air conditioners.

Now, it appears as if the offspring is offing its mother, as rooftop solar slowly strangles utilities.

While the green media has gleefully spread word of this apparent matricide, it was first spawned by a report right out of the utility industry itself, and then bolstered by a prominent utility executive, lending it credence. The concern from the industry is fairly straightforward: If customers produce their own energy, they won’t need to buy it from the utility, and revenues will drop. And if those consumers produce more energy than they use, they become competitors, lower the price of electricity and take another bite out of the utilities’ bottom line—until we just don’t need the utilities anymore at all.

The idea of this sort of rooftop revolution is as rousing and lovely as that of wiping out our industrialized food system, with backyard and rooftop gardens. But it’s also nearly as implausible for two reasons: scale and dependency.

If any utility should be under threat from rooftop solar, it would be the Phoenix area’s Arizona Public Service. The state is one of the best places in the world to generate solar power, and it has a strong net metering program that allows homes with distributed generation to recoup their costs and then some. APS boasts that 24,000 of its customers have taken advantage of the sun and the incentives. While that’s a hefty number, it represents only about 2 percent of the utility’s more than 1 million customers. That may put a tiny dent in APS’ $600 million-plus yearly profit, but it’s a long way from being an existential threat. Even the 150,000 solar rooftops here in California, with a max capacity of less than half of what the Palo Verde Nuclear Generating Station kicks out at any given moment, is a mere drop in the total energy bucket.

With the cost of solar panels continuing to drop, it is conceivable that 2 percent could become 20 percent. But that still won’t necessarily be the death knell for utilities, because distributed generation as we know it now is still desperately dependent on the grid, and the utilities that run and operate it. David Roberts, over at Grist, recently noted that “a home creating its own power basically unplugs itself from the grid. … The electricity that’s generated onsite on a solar home is used by that home or its immediate neighbors. It barely touches the utility’s transmission and distribution system.”

While Roberts’ explainer on this issue is otherwise excellent, this passage doesn’t quite cut it. Even figuratively, one could say that a home “unplugs” only during those very rare moments when it produces exactly as much power as it uses. That might happen for a few minutes during the day. For the remaining 86,000 seconds in the day, rooftop solar is very plugged in.

Solar generation typically reaches its peak around 1 p.m., right at a time when residential power use is relatively low, because air conditioners have yet to crank up too much, and the residents are at work. Power flows from house to grid, where it adds to the current that is flowing towards the “load,” or places that need it. That might be a neighbor, unless her house’s panels are also generating surplus power, in which case it could be the Walmart down the street or the factory in a neighboring town. Residential power use then swings upward as the afternoon progresses, peaking around 5 p.m., as folks get home from work, and air conditioners rev up. By this time, solar power is on the downswing, so the typical residence will use more power than rooftop solar generates. It’s payback time, when residences that generated all that surplus power in the middle of the day get it “back” from the grid (though now the juice is most likely coming from natural gas, hydropower, coal or nuclear plants). In essence, a transaction is taking place that allows the rooftop solar home to treat the grid like a big battery, storing up excess power and then releasing it when needed.

This transaction is critical for rooftop solar to make any sense (unless one is inclined to attune one’s energy use precisely to the cycle of the sun, or to put in a big enough battery bank to back up all that solar on site, but more on that later). But the transaction can’t take place without the grid. And in most parts of the West—California being the exception—the grid is run by monopoly utilities, and they’re the ones firing up the so-called peaking generators necessary to keep the power on when the sun dims and demand is at its highest. Indeed, the cost of building and running those “peakers”—which in many cases are essentially power-generating, natural gas-guzzling jet engines—are the big threat to utilities. Yet they become more and more necessary as more solar—be it rooftop or utility-scale—is put into the grid.

There are ways around this quandary. The obvious one is for all those folks with distributed generation to battery-up and literally unplug from the grid. The other is to broaden the push for distributed generation beyond rooftop solar, to small-scale hydro-power, geothermal, wind and even small natural-gas plants, so that the collective input from distributed generation can meet demand at all times of the day so as to ease the dependence on the utilities (though not necessarily the dependence on the grid … decoupling from the grid will be a lot harder than cutting the utilities loose, for a number of reasons.)

In the meantime, the utilities might want to consider the recent warnings as a wake-up call. Rather than go to battle with distributed generation—by trying to kill incentives or cut down net metering programs—they’d do well to adapt to it, even embrace it. This won’t be easy. It's a hugely complex issue, but it may be the only way out. Rooftop solar can be the utilities’ killer, or savior, depending on how the utilities handle things.

Cross-posted from High Country News. The author is solely responsible for the content.

Published in Community Voices