Mohit Chhabra

Oh totally. We really made an effort to be balanced, and in doing so some of these things get missed. I appreciate you pointing it out. And the good word!

That's a good critique. I wrestled with that a little while writing.

Are public utilities the answer to California's electric sector woes? It's complicated. Check out a new paper that I helped draft for UCLA's Emmett Institute for answers.

Cover page featuring an electric grid

California’s investor-owned utilities are under scrutiny for causing deadly wildfires and sky-high electricity rates. Would public ownership fix these electricity woes? Our new report by Ruthie Lazenby, @sylvieashford.bsky.social
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Maybe he means it's a tax on all consumption and any reduction in economic activity would reduce global CO2 emissions??? Would need to account for changes in global production and consumption tho, as some of these goods will now flow to other countries.

The crux of the issue is that we've been funding growing costs of climate adaptation, wildfire resilience, through electric rates and designing electric rates inefficiently. The solutions are commensurate.

A big thanks to Abbie Weeks, now at RMI, for all her great work on this.

This report provides insight into how different utility asks should be funded, how IOUs in CA can be better regulated, and the role of rate design in providing incentives and achieving equitable outcomes

NRDC just published research identifying causes of and solutions to steeply rising electricity prices in CA, with a focus on PG&E. Keeping electricity affordable is essential in itself and a prerequisite to decarbonization.

A good case study of what happens when politics, policy, and economic efficiency collide. What's the median outcome, what's gained, and what's lost.

Selectively.

Guess What Didn’t Kill Rooftop Solar? California’s solar industry is doing just fine despite their complaints about net energy metering reform. There is a new administration in DC producing a raft of misguided actions to bolster fossil…

My EI blog post today addresses the claim from CA's rooftop solar industry that the 2023 change in net energy metering rules devastated their business. State's DG database shows it didn't. Just pulled forward sales to beat the new policy.
energyathaas.wordpress.com/2025/01/27/g...
#EnergySky

You recommend a marginal abatement cost approach for jurisdictions with environmental and/or GHG reduction goals?

Not very. You can check out the CPUC SB 695 report to get an idea. I think there was an attempt to link with the tax board, but it wasn't successful. So, IGFC. The wildfire fund is like an insurance fund.

The issue is that most grid related costs, especially in CA, aren't caused by usage. Think of all the billions of $$ spent on wildfire mitigation measures like tree trimming. How to collect those costs is a policy decision. If you want to solve for equity, then you'd do something like the IGFC.

Thanks :)

True, but note that utilities sell their long term contracted power back into the spot market. CAISO dispatches all resources. Difference between long term contract price and the spot price is passed on to or collected from ratepayers.

I understand where you're coming from and possibly the disconnect. Maybe, if less driving was the primary goal then the tool would be a tax on gasoline. I think the goal here is less driving in and out of a specific region during certain times (or something like that).

The drivers also include: presence of clean energy/ renewable policy goals, and resource potential.

This needs to be done separately for different regions of interest. The total soft costs, and what these soft costs are made of, will be very different in California versus Arizona versus Minnesota for example.

The soft costs vary by region. One way to estimate the total is to look at NREL's ATB reports that do a bottom-up calculation of what it could ideally cost to install rooftop solar, look up actual installation costs from the tracking the sun report (LBNL?), then take the difference between the two.

Part of it is the state utility regulator's job to ensure that utilities comply with resource adequacy/ have enough capacity to serve all loads including newer loads. There are some regions where regulators have less influence on this matter ofc.

IMHO it's good to deviate from what's economically efficient if there are strong policy reasons to do so. Just be upfront about it, what the pros and cons are. Leads to better decision making.

Fair, and this is a common retort to economic analysis. Note that my response was to the statement that 'other solutions may be more efficient.' Policy priorities are real, and it's important to talk about them as such. Not mix up with efficiency of outcomes.

PTO to the max, come back and push back to the max. Above is just what math says and there is enough economic research on this. Disagreements are about policy priorities.

I disagree but I'm enthusiastic to change my mind when I see better evidence. Hopefully from your research. The problem with a lot of advocacy in this space is that they confuse what costs are marginal to usage versus marginal to other things. I need to write a paper on this. 2025 goals.

Mathematically it's impossible to be more economically efficient and progressive than (1) pricing usage at social marginal cost and (2) collecting all residual utility revenue from the tax base. All other methods are second best with tradeoffs.

You can say highly contested again ;)

I've seen a lot of "here's this artificial TOU structure that makes the math work out on our policy priority" which doesn't come close to addressing that basic question. You will likely find that different tools get better results in different regions.