California’s Energy Crisis

A Tale of Fraud & Corruption

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SAN DIEGO — California has the highest cost of electricity in the nation, as revealed in an investigation by The Los Angeles Times. An ever-growing dense population and the need to purchase power from other states are a couple of the underlying problems contributing to this situation. However, the main problem is the utility companies…and corrupt politicians. California is the only state that passed a law requiring every residential building to not only maintain a permanent utility hookup, but to never disconnect from the grid. Yes, you read that correctly. According to Section 110.10 of California’s Title 24 energy code:

California Title 24 Solar Power Off Grid

One could argue that “interconnection to the electrical service” does not necessarily mean connection to a utility. However, given the context of “Mandatory Requirements for Solar Ready Buildings,” it is apparent that the lawmakers intended to indicate a required minimum standard. Even if a property owner installs a solar array with batteries, they are legally not allowed to go off the grid.

How could such a crazy law exist? Well, it’s California, after all. But, seriously, this law was pushed through by aggressive lobbying on the part of utility companies like SDG&E, as well as what amounts to legalized bribery. SDG&E and other utility companies are allowed to pay individuals for helping them expand their infrastructure. While this is intended for the purposes of paying lobbyists, they used this as a legal loophole to pay off city council members, the California Public Utilities Commission and elected state officials to get their lucrative expansions, financial bailouts and legislation approved at the cost of taxpayers and utility customers.

People eventually found about this, but not only was it too late, it was technically legal. Here’s a report by the San Diego Union Tribune covering ongoing investigations of SDG&E’s alleged unlawful lobbying. So, none of the corrupt government officials were punished for accepting bribes. Meanwhile, the utility companies get an average $4.98 a month in maintenance fees for every single residential property in the State of California, whether any electricity is being used or not.

Should anyone decide to go off the grid, they get fined for breaking the law, and can even be arrested if they “tamper” with the power companies’ equipment by disconnecting from it. Even better, CPUC allowed SDG&E to adopt exit fees, which it charges its customers if they’re able to escape the monopoly by buying electricity from a competitor, such as the newly formed Community Choice Aggregator is attempting to provide.

This legislative free-for-all allowed companies like SDG&E to get away with all sorts of less-than-reputable schemes. Such as increasing their prices by deceptively changing their pricing tiers from four to three and now only two. In 2016, they eliminated tier 4 (most expensive price for high power usage) and upped the pricing of tier 3 to match the cost of the now non-existent tier 4. Only months later, they did away with tier 3 and did the same thing.

SDGE Pricing Tiers

Currently a tier 1 (lowest price) customer now pays the same as what someone using more power in tier 3 would have been paying under the original pricing structure, effectively changing the base rate to that of the second most expensive rate from the previous year. A frugal customer now pays as much per kilowatt hour to power his apartment as someone who was using almost twice as much electricity to power their mansion would have paid only a year before.

Seeing how easily they had gotten away this, SDG&E then factored in a plethora of other costs reflected in their customers’ monthly statements. New charges started to appear for things like:

  • Nuclear Decommissioning (paying for the upkeep and security costs of the now decommissioned San Onofre Nuclear Plant)
  • Public Purpose Programs (paying to subsidize low-income customers, so they can receive a discounted rate)
  • Competition Transition Charge (Paying the utility company for losing money when a property owner lowers their power bill by installing solar panels and/or wind turbines)
  • DWR Bond Charge aka Water Reclamation (paying for the cost of removing pollutants introduced into the ground by waste water. What the Hell does this even have to do with electricity?)
  • Distribution (paying for the purchase of power from other states)
  • Transmission (paying for that power to be sent to capacitors for storage in California)
  • Local Generation Charge (paying for power to be generated, even though it was not actually generated, it was purchased and stored)
  • Reliability Services (paying for the future cost of repairing their infrastructure when a transformer or line is damaged by weather, etc. Great, you get to pay for things that haven’t even happened yet. I bet your wallet is stoked on being psychic.)

SDGE fees

These new costs are explained in vague terms on the back of the second page of a customer’s statement. Never mind the fact that they purchase the electricity from providers at $0.04 a watt and charge the consumer roughly ten times that for power usage: Electricity Generation (the price of the power you used before all the fees are added in). The State government passed on the huge cost of dealing with radioactive waste and federal security officers for their own failed nuclear plant to the taxpayers by not only raising taxes, but getting the cost added to their power bills. They were already publicly accepting bribes, so why the Hell not, right? Then the cities who had been paid off by the power companies got wise to this scam and had the cost of city water reclamation included as well.

The best part is, these new fees typically cost way more than the actual cost of the electricity the customer used, and they all vary wildly from customer to customer. You might get charged a $23.17 DWR fee, while your neighbor only pays $2.08. This is explained away as “different counties, cities and even base power lines are affected by different costs in terms of regulations, maintenance and infrastructure.” Alright, but he lives next door, so that still doesn’t make any sense. Suddenly, on top of your $60 bill for power consumption, you also owe $135 in fees, several of which have nothing to do with electricity. Just one more way California has managed to master fraud and extortion.

1 COMMENT

  1. […] On a celebratory note, we in San Diego have won, we are in first place, we have, without any competent dispute, attained the highest electric rates in entire nation.  Check out the Blog by Danny Wolf that identifies all the additional charges. […]

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