Empower businesses and communities to transform California’s electric grid
Communities and businesses, not just aging utilities, have solutions. It’s time to change antiquated policies and regulations that stand in the way.
In January, Bloomberg called Pacific Gas & Electric "a poster child for climate-change dangers" and referred to the Northern California utility company as "the world’s biggest climate-change casualty yet." Since then, PG&E has filed for bankruptcy, hired a new CEO and initiated a series of Public Safety Power Shutoff (PSPS) events — the most by a U.S. utility company, affecting millions of customers and hundreds of communities across the state. This serves a wake-up call to businesses, policymakers, regulators and community members that we need to quickly address our aging power grid and develop new utility business models.
In California, there was typically a specific wildfire season, often in October. I vividly remember the 1991 Oakland Hills fire that ravaged neighborhoods where I now live with my wife and two kids. Now, the impacts of climate change are seen, felt, smelled and heard across the state on a seemingly year-round basis.
According to the Los Angeles Times, "Five of California’s 20 deadliest wildfires have occurred during the last two years. And 10 of the 20 most destructive wildfires, in terms of structures lost, occurred over the last 10 years."
In the early 2000s, I served as a Peace Corps volunteer in Benin, West Africa. My small village was completely off-grid and consisted of several thousand rural cotton farmers and merchants who developed a locally run electric cooperative that quite effectively served as the local utility provider. Households contributed monthly dues, a patchwork of electrical wires networked a few dozen homes, and we experienced relatively affordable and reliable electric power during most evening hours. I even watched the 2002 World Cup on a small television with rabbit ears powered by a small generator connected to an old car battery.
Nearly a decade later, I worked for PG&E, managing several community-based energy efficiency programs targeting small business customers to help them access lighting, HVAC and refrigeration rebates. These programs eventually helped form the backbone of community choice aggregators (CCAs) that now procure renewable energy across dozens of communities and serve millions of customers across California and beyond.
At the time I worked there, though, PG&E’s approach to CCAs was to spend millions of dollars lobbying against them and promoted statewide ballot propositions to maintain its monopoly status.
California moved on from its failed attempt at deregulation as state policymakers, and regulators created aggressive climate policy across buildings, homes and the electrification of transportation.
PG&E supported landmark climate bills, including AB32 and SB350, while being recognized by CDP for its perfect score in reporting carbon related disclosures.
However, the 2010 gas pipeline explosion in San Bruno, recent PSPS events and countless other data points clearly indicate that PG&E lacks sufficient leadership, oversight and systems to operate and maintain the complex infrastructure that is desperately in need of digital tools from some of its customers in Silicon Valley.
As PG&E continues to be a punching bag for state policymakers, the news media and its customers, the California Public Utilities Commission (CPUC), the state agency responsible for regulating the major utilities including PG&E, ensures adequate funding and provides oversight of the state’s aging power grid.
As former CPUC Commissioner Michael Picker told me two years ago at the VERGE conference: "The PUC is rapidly becoming an agency that builds the infrastructure to get carbon out of the California economy."
Alongside Georgia Public Service Commissioner Tim Echols, Picker talked mostly about poles —- as in the 4.2 million wooden poles holding up electric lines and touching every home and small business in the state. Picker said, "Each pole probably carries more data than was transmitted throughout the U.S. in 1970."
Picker may have oversimplified things by indicating that this climate-induced challenge is all about poles. It’s about infrastructure, but it’s also about our ability to leverage the upcoming 5G wireless network, internet of things devices and sensors, while creating new business models and financing structures.
California needs to deploy capital at scale to modernize its power grid. The state needs partners to move faster. They need to be empowered to rebuild infrastructure, use technology including distributed energy resources and manage risk appropriately in a way that serves all customers equitably.
The highly regulated utility industry is confusing for most Californians and navigating it requires a high level of technical, political and economic understanding of energy markets. However, there is an incredible partnership opportunity to build on the foundation of California’s business, community and political leadership to address climate change, rebuild our infrastructure and harness technological innovation for future generations.
The optimism and naivety of our current situation was epitomized by my 8-year old son, Bazlo. We’ve had a series of conversations in our household about climate change and discussed solutions such as solar panels, heat pumps and electric vehicles. When he heard a neighbor’s generator running during the power outage our home has experienced for the last two days, he turned to his 8-year-old friend and immediately associated the sound of a generator with every kid’s birthday party "must-have," asking, "Sweet! You got a bouncy house?"
Living without power for the past two days pales in comparison to the impact on those who lost family members or homes, or to the financial pain felt by small business owners forced to close their doors or that lost valuable inventory.
We need more engagement from business and political leaders, local community members and young people to move faster and rebuild our infrastructure in a truly sustainable way.