Please note that the transcript provided below is AI-generated and intended for reference. It may contain missing words, misspellings, or other small errors. To request a correction or clarification, please contact info@theclimatecenter.org.
Pooja Agarwal, The Climate Center (00:07):
Hello everyone. We’re going to get started. So this is the Affordability Benefits of Distributed Energy Track. Thanks everyone for joining. There’s a lot of seats in the front, so feel free to keep trickling in. I’m just going to give a quick shout out to our sponsors for the event today and lots of amazing people who made this event possible and also our promotional partners. So we’re going to get started. This panel is the electricity affordability mandate, accountability, innovation, and jobs. And I’m really excited to introduce the moderator for this panel, who’s Jose Torres from the Affordability Affordable Energy Campaign.
Jose Torres, Affordable Energy Campaign (01:01):
Hello everyone. Good morning. Thank you, Pooja, for that. Jose Torres, the Affordable Energy Campaign. We’re a new campaign made up of consumer advocate groups, environmental groups, environmental justice groups, and economic justice organizations. We’re focused on making energy affordable, but we’re grounded in environmental, environmental justice values and community power. So we’re trying to do a lot, but we’re excited to try to do it. But I’m here joined today by an awesome group of panelists that you see up on the screen. And they’ll introduce themselves and share more about the Oregon in a second, but we have a lot of different cool perspectives here in the room. We’ll be talking about profits, community solar, community power, health, and its relationship to people and energy, ownership, and of course, union and labor. So it’s going to be a fun panel. So thanks for joining us. But before we jump into them, excuse me, I want to start by grounding us in the context of the conversation today.
(02:14):
And at the highest level, if we want climate technology, electrification to succeed, we have to make electricity affordable.
(02:23):
And the good news is we already have clean community-based solutions to get it there, which they will talk about. Because when electricity affordable, the transition is going to be much easier to get to and much better for working families, frontline communities, rate payers, and the climate. And right now, California’s facing a really difficult affordability crisis. As you’ll see on the screen, there’s a bunch of stats about how it’s hard. I’m sure y’all don’t need to see the stats, but I think it’s important to just ground us with kind of some of the complexities of the energy system right now, which is things are hard, but profits are up. And I think the big thing here is like, how is the utility space structured and what are we doing to incentivize this, right? And how can we change that? And we have a kind of a general idea on what’s driving some of these costs, right?
(03:20):
Like wildfire mitigation and liability, distribution investments, and the way the system works and the way utilities are regulated, right? These are all major contributors to kind of what’s happening in terms of affordability.
(03:36):
So while we think electricity has the potential to be more stable over the long term, especially as we rely less on volatile fossil fuel markets, as we’re seeing, unfortunately, across the ocean, we haven’t yet fully built the system and the structures needed to deliver on that promise of reliable, affordable electricity for everyone. So we got to address that. And we’re already seeing some courageous solutions being discussed by some of the folks here on the panel, so excited to chat about that today. And I think the big question is whether we can scale these solutions fast enough and whether we’re willing to make the structural changes required to get there. It’s a question for many. I think we can. That’s why I’m doing the role I am, but I think that’s what we’re here to talk about. So with that, I want to turn to our panelists and what is your organization doing to address electricity affordability in California?
(04:32):
And if we keep these two to three minutes, please.
Katie Ramsey, Sierra Club (04:39):
Hi, I’m Katie Ramsey. I’m a senior attorney for Sierra Club. I think this audience is probably familiar with Sierra Club, but just in case Sierra Club’s one of the country’s oldest environmental organizations, we have a mission to protect the natural and human environment and climate change is the greatest threat to that mission. And so Sierra Club shows up before public utility commissions across the country with the main goal of trying to decrease our investments in fossil fuel infrastructure and build the renewable energy system that we need. So across the country, attorneys like me show up to challenge major utility investments in fossil fuel, starting with coal plants, new gas plants. And in California, the landscape is a little different in a good way in that we’re no longer fighting over coal plants, but we’re fighting over whether there should be new gas infrastructure, whether we shouldn’t weather and when we should invest in the existing gas infrastructure, and how do we make the clean energy transition both in the electric sector, transportation sector, industrial sector, and the building sectors.
(05:48):
So we need a system that all works together, and I was so glad to hear many of the senators and assembly members talk about how they see the connection between the need to electrify everything and the need for electricity rates to be affordable. That is music to my ears, something that I would not have taken for granted today or even five years ago. And it’s wonderful to hear that connection explained from our legislators. So I want to see that continue and go further. Sierra Club’s work in California on affordability lately has focused mainly on challenging utility proposals that are preposterous, whether they are proposals to invest in fossil fuels or to invest in false solutions. So one thing I would point to, because it is the best one we’ve had in a while, is we challenged the, for example, the SoCal gas proposal to build a massive transmission pipeline, the Angeles link from somewhere in Southern Central California, all the way through to downtown LA.
(06:46):
So it’s a red herring, but we got the commission to have a good proposed decision and it might save rate pairs billions of dollars by avoiding something that we didn’t need in the first place. The solution for most of these problems is already out there. Wind, solar, batteries, energy efficiency, distributed energy resources, that’s what works and that’s what we want to see more of. The other work I’d want to highlight from the last year is Sierra Club led in the cost of capital proceeding that just wrapped up at the commission. When you look at the California landscape and why electricity rates have increased between seven and 13% year over year, you have two different universes. You have the investor owned utilities and you have public utilities. In the investor owned utilities, you see these rates skyrocketing. In the public utilities, you see the rates going up and not nearly so quickly.
(07:36):
On the investor owned utilities side, you see one in five rate payers being behind on their bills. It’s hard to find the data for the public utilities, but it’s much lower. We think it’s more like one in 10. That’s not ideal. It should be lower, but there’s a lesson to be learned there in that difference. That’s why we intervened in the cost of capital proceeding alongside other organizations like Protect Our Communities Foundation, Utility Reform Network. And what the result of that work is that the commission lowered the amount of money that utilities get back on their rate of return for capital investments in a way that is very small, but directionally important. We want to see those profits get shrunk to what is absolutely necessary because people are hurting. So with all that, Sierra Club definitely sees affordability as necessary to make the whole system work to decarbonize everything, and that’s why it matters and that’s what we’re working on.
Jose Torres, Affordable Energy Campaign (08:30):
Thank you, Katie. Sure.
Speaker 5 (08:34):
Yeah.
Sachu Constantine, Vote Solar (08:35):
All right. Well, thank you, Climate Center. Thank you, Jose. Thank you, Katie. My name is Sach Constantine. I’m the executive director at Vote Solar. And like Climate Center, we’ve been at this for about 25 years now, quarter of a century, working on making clean energy affordable, making it part of the mainstream energy choice that we have. We really want to be a fact-based solutions oriented, but really keep our people focused in the policies that we put forward. And affordability is as people centered as you can get. That is really one of the main themes that is animating our work right now. And there’s a really fortunate coincidence. You heard Katie just talk about how some of the rules and some of the way that our regulatory system is bent against renewables and for fossils. But the nice thing is that when we want to address affordability, when we want to address equity and justice and inclusion and agency in the energy space, there are renewable solutions ready and waiting for us right now.
(09:35):
The technology is here. We need to work on getting those markets open and getting the rules right for that to flourish. And here in California, the example that we have, a really great working model, and I guess we’re going to get to slides later, is that DSGS program. So I get to give some more love to DSGS, like Samuel Roth’s panel just a few moments ago. We know in general that solar and clean energy and solar attached with batteries is absolutely critical to this clean energy transition. We also know that if we want speed to market and speed not at the expense of our most vulnerable, leased enfranchised communities, speed that helps them be part of that transition and gets us to the clean megawatts and clean gigawatts that we need that distributed is going to be the way to start. It’s not going to be the final answer, but it will get us to 2030, 2035.
(10:29):
And DSGS, the demand side grid services program, is the working model that shows us how that can work, how we can increase choice, increase people’s agency in fighting their bills. It’s one in five Californians is behind on their bills. 37% face really high energy burdens in this state to put some numbers to what you were talking about. And things like DSGS can put downward pressure on rights, can put downward pressure on what is one of the biggest cost drivers, which is the top 100 hours of use, the peak hours on the grid. We talk about wildfires. Those are a big cost. We talk about cost shifts of other kind, but let’s just talk about how we operate that grid and how distributed services like those facilitated by DSGS can really drive costs down and drive quality of service and accessibility of service up. I’ll leave it there for the rest of the discussion, but there’s just so much there to talk about.
(11:25):
I’m just excited to be here. So thank you.
Jose Torres, Affordable Energy Campaign (11:28):
Thank you so much. Next we have Travis.
Travis Gibrael, Reclaim Our Power (11:43):
Hi everybody. My name is Travis Gibrael. I am the research and education organizer with the Reclaim Our Power Utility Justice Campaign. We are a coalition of over a hundred organizations, mostly environmental justice groups, but frontline communities representing low income people of color, tenants rights organizations, immigrant right organizations. And we’ve come together to advocate for those most harmed by the investor owned utility system and advocate for transformation away from utilities that make decisions based on maximizing profit for shareholders towards a not- for-profit system that centers equity and justice for the people in the ecology of California.
(12:26):
And the reason … The vision that we have is that when you really get down to it with our utilities, the core problem that all of these other issues that we’ve talked about come back to is where the profit incentives lie. The utilities are C corporations, and so their number one reason for existing is to generate profit for their shareholders. And the way that they do that is not through providing services, but it’s through capital investments. And so because of that, they’re actively incentivized to design and operate a grid that is as expensive as is possible. The more they build, which we pay for, the more they profit off of that, which we also pay for those profits. And so some of the results that we get from that … Well, so first off, we have the affordability crisis that was just mentioned, but that doesn’t even include the hundreds of millions of dollars that we pay through our taxes to the CPUC, which is meant to regulate these utilities and prevent them from pursuing the most self-interested strategies.
(13:33):
We also have organizations like Sierra Club and like Turn that are focused on intervening within these processes. And so you have an enormous amount of resources that are just going towards preventing the utilities from doing the thing that they’re trying the hardest to do, which is maximizing profit, right?
(13:52):
When we look to a high DER future that we would all love to see, that is also contrary to the utilities profit model, right? Because if you build out on the distribution grid, if you reduce the needs for upgrades to substations or to transmission lines, which they make a 12% return on, then that would prevent them from generating more profits, right? So they’ll fight back tooth and nail against that through campaign contributions, through high paid lawyers, and through lobbyists. And just one proof of concept to say that in 2024, there were multiple reports that came out that said, if we were to publicly finance the build out of the transmission system, then that would save rate payers $28 billion, right? That’s just to use public money rather than following the status quo. Now, if you follow the logic of that, that every step along the way where the utilities have the opportunity to finance things and generate profits, if you were to take away that ability, the amount of savings is absolutely enormous.
(15:02):
So we’re advocating for a system in which the priorities and the decisions are made by the ratepayers, they’re made by the people of California, they’re made in the best interest for our ecology and not to generate returns for shareholders. So thank you.
Jose Torres, Affordable Energy Campaign (15:19):
Thanks, Travis. Now let’s go to Jenna.
Speaker 5 (15:24):
Dr. Jenna Roper, Central California Asthma Collabo (15:24):
Hello. I’m Jenna Roper and I’m at the Central California Asthma Collaborative. We’re based out of the Central Valley and we serve patients over 13 counties. We provide asthma remediation for Medi-Cal patients through CalAIM. And since 2022, we’ve served over 8,000 patients in disadvantaged communities, and we’re really passionate about healthy air. We do research on natural gas stoves and how it affects the lived environment of our asthma patients in those homes. And that research led the way to us to start to look into whole home electrification. And these retrofits are kind of a natural extension of the remediation work that we do, but none of that works if electricity isn’t affordable. We’ve been engaging mostly at the PUC. We’re talking about these structural changes that need to happen, but there are folks now who are struggling and we have to make sure that we don’t overlook them in our fight to get this better system.
(16:22):
So we’re really passionate about making sure that safety net programs and protections stay in place while these changes are happening.
Jose Torres, Affordable Energy Campaign (16:32):
Thank you, Jenna. Last but not least, Sam.
Sam Appel, United Autoworkers (16:40):
Hi there. How are y’all doing? My name’s Sam Appel. I’m the Policy Director for the United Auto Workers Region six, which includes nine Western states, and we represent about 100,000 members in California, and those members fall into three … Oh, well, actually, do we have any members in the room? I know we do, actually. UAW members in the house, nonprofit, state service, auto workers … No. All right. Well, anyway, we do in the other rooms. So we represent three large bases, manufacturing workers, which is going to be some of the stuff we’re going to talk about today. We represent state scientists, and then we represent tens of thousands of workers at the University of California and other higher education and research institutions in the state. And so I have the pretty challenging job of figuring out what is the thread that unites all those workers.
(17:39):
And what we have come together in our just transition committee over the last two to three years to figure out is pretty much our just transition strategy, what that means to the UAW in the Western states. And for us, that has come to mean three things as our members have articulated it. And that’s pretty much building supply chain for the energy, for the stuff that we need in California. It’s accelerating decarbonization, and it’s making our economy more affordable for working people. So we have tried to figure out over the last few years, how do we pursue this agenda at the macro level, and then in particular industries, and we’ve targeted particular industries, but one of those that we have come to focus on this year is the electrical grid industry, because as Travis pointed out, and everyone else I think on this panel has pointed out, the electrical grid is not only slowing down the deployment of renewables, DERs and utility scale, but it’s also driving up the costs to our members and to working people and poor folks across California.
(18:56):
So we have targeted that industry for an intervention that we think can deliver on all three goals through a bill that we’re running this year, AB 2516 with Petri Norris. And I want to just point out a little bit of the scale of the problem that we’re talking about. Before COVID, the price of a large distribution transformer, that price has now doubled or tripled depending on the subsegment of the transformer that you’re talking about. And we are talking about distribution transformers, transmission scale transformers and other equipment. So we are paying two to three and sometimes four to five times for the exact same equipment that we were buying three or four years ago. And not only is the equipment more expensive, but we’re seeing two to three year lead times to deploy this stuff. And again, this is not just about utility scale. This is about replacing things for wildfire resilience and just upgrading our aging grid.
(20:12):
So this is definitely a big driver in addition to wildfire costs of our increasing electricity spend. So the problem that we’ve identified is pretty clear. Supply chain constraints lead to project delays, lead to higher capital costs and upward pressure on rates, mostly affecting poor people and working people. So we’ve designed an intervention on the demand and supply side of the market, which is about centralizing procurement and actually infusing some money and state capacity into the production ecosystem for these goods. And we’re talking about transformers, switch gears, grid enhancing technologies, and the stuff that we know we’re going to be spending tens of billions of dollars on. So just to finish up, I’ll go to the last slide.
(21:05):
The spend that we’re looking at over the next 25 years in this equipment is astronomical. And if we can just bring down interest rates in the producer price index for these equipment to what it was before COVID, we could save 100 to $200 billion in rate payer funds by 2050. And if we did that while incentivizing production for this equipment in California, taking 30% of that CapEx and producing it here, that would produce 12,500 jobs is from a report we just released with the Climate and Community Institute. So that’s where I’ll leave it for now, but thanks. Thanks for having us.
Jose Torres, Affordable Energy Campaign (21:53):
Thanks y’all. I know that’s a lot. So let’s take a step back and jump into some of our questions to kick off the panel, some more and kind of dive deeper into some of the stuff they’ve discussed, so appreciate all those perspectives. And this is a hard question, but I think we want to go there. So if California is serious about meaningfully reducing electricity bills, let’s say on the order of 20% or more over time, not just short-term relief, but what should California prioritize now and which regulatory or legislative changes could actually deliver that level of savings? Who wants to take that question? Yeah. Okay. Yeah. And many of you can of course, but go ahead,
Katie Ramsey, Sierra Club (22:38):
Katie. Okay, cool. So 20% is a big target. So you have to basically try to pull on all the levers available to regulators and legislators to try to get there. And so this is going to sound like a laundry list, but I’m trying to get to the goal. All right. So the first thing that the regulators and legislators could be doing is making better use of the resources that we already have on the grid. There are, as we heard from Walter and others this morning, there are a lot of rooftop solar systems and batteries out there on the grid that are used currently to optimize for those customers needs, but with better aggregation and better incentives, you could aggregate all those resources and get a lot of extra grid capacity that’s optimized without actually having to build anything new. So I think a key part of making better use of those resources is passing bills that require resource adequacy credit for those DER facilities, making sure that there’s some way to optimize them and have them work for collective use with the right incentives instead of just optimizing for individual customers.
(23:41):
It means giving those customers some carrot or incentive to put their resources to public use.
(23:49):
I think another … Building off the work that Sierra Club did in the cost of capital proceeding most recently, the hugest and easiest lever that regulators should be pulling on is decreasing corporate profits from the investor under utilities. The utilities ask for 11% rate of return on their equity. Sierra Club proposed 6% and the commission reduced it just slightly, just only to 10 and a little bit for each of the utilities. It’s not nearly enough. If you have a commission with the staff with the financial expertise to stand up and dive into those details instead of just trying to pick a number in the middle, I think you’d see very different results. So I want to make sure that the commission is well equipped with the financial expertise that it has to make the right decision. I think the technical financial case is already out there, the facts are out there, the political will is out there.
(24:48):
We’ve seen elections get swayed by the need to make energy affordable and pulling on decreasing corporate profits should be the least … It should be the most obvious answer for regulators. The political need is there. I also think you can’t talk about decreasing bills without figuring out how you tackle wildfire spending. Right now, the utilities have every incentive to build capital and solutions to that in a way that’s not always cost effective. I think that there are many stakeholders who have made the case that covered conductors, insulated transmission lines, there are better alternatives to undergrounding everything. So trying to make that case both before the PUC and in the case of public narrative and communications is a task for us all to weigh in on. Yeah.
Sachu Constantine, Vote Solar (25:39):
I’m happy to pick up on that because that’s a great point, right? What is the most cost effective way to reduce costs? Jose, can you bring up the slide that’s a picture of a … Yeah, so we’ll start there. So I said I was going to give some DSGS love and we’ll hear some of it. So here’s a vision of what a distributed energy system could look like on your left. You see the kind of old hub and spoke conventional fossil fuel based type grid, and of course the colorful happy space that we all want to be in is on your right there. Let’s talk about some numbers about what this kind of a system and this kind of a vision can really create for us. DSGS, which is California’s main program right now, we’ve had other historical ones, but main program right now to make this kind of future possible, starts in the middle of a crisis.
(26:29):
It starts in the middle of us really hitting our reserve capacity margins and trying to call on the batteries that Katie was talking to on the solar systems powering those batteries that Katie was talking about that are already out there on the grid, tying them together, coordinating them in a way that these community power networks can become virtual power plants, VPPs for short.
(26:52):
We know that the deployment of this virtual power plant is already pretty significant, as Katie said, and companies like Sunrun are putting out across the country a gigawatt a year, another power plant every year on rooftops and in garages with the attached batteries. Brattle Group estimates that this kind of a system implementing this can reduce rate payer costs by between about 28 million and over $200 million just by implementing some of these distributed solutions in a coordinated fashion. We are right now through DSGS, through this program, deploying on average about 530 plus megawatts of capacity to the grid. And those are key megawatts at a critical moment. It’s flexibility, it’s resilience, it’s spreading the benefits down to the communities that need it, that feel that energy burden that we talked to at the beginning. And as I mentioned, in Sunrun’s case and in other installers case, it’s the speed to market.
(27:57):
Besides wildfires, besides providing resilience and the ability to tamp down on high voltage transmission through sensitive areas, these distributed networks can get you those megawatts and those gigawatts very quickly. Speed to market can go through the most vulnerable, most exposed, least economically powerful communities and still get us to where we need to get as fast as is really humanly possible, right? And this is a human centered grid in the end. We’ve got eight plus gigawatts coming from vehicle electrification. We’ve got two gigawatts coming from data centers. I really enjoyed the panel last summer member Irwin and both senators spoke to the need to keep rates down in the face of competing crises, wildfires, load growth, an aging, frail system, lack of economic development. Well, this picture, this colorful picture up here can get you to a lot of the solutions to that. We’ve got another five plus gigawatts in home electrification and then climate change.
(29:02):
And if you go to the next slide before we jump onto the next person, right, these savings stack up.
Speaker 5 (29:02):
Sachu Constantine, Vote Solar (29:02):
Jose Torres, Affordable Energy Campaign (29:11):
Thanks. I think we’re going to move to the next question, but do you want to close out real quick, this one?
Sam Appel, United Autoworkers (29:15):
Sure, sure. I mean, I think we were talking about a couple main cost drivers. I mean, short of transitioning to a different ownership structure, there are some things that we can put into the public bucket. And 254 did that with some of the transmission build finance, but what the bill that we’re working on this year with a bunch of the folks in this room does is it takes some of the procurement, the capital spend, not just the deployment of the project, and puts it into the public finance bucket. And it also takes the procurement process itself some of it Where necessary for critical components and aggregates the buying power of the utilities and also puts that into the public sphere. And finally, the bill that we’re working on also does put some of the production into the public sphere. So I think we’re talking about a couple different ways of cracking this nut, but I think, and we have more or less radical versions of how to do that.
(30:32):
But I’d say those three elements of taking the business model more public in a certain way are important.
Jose Torres, Affordable Energy Campaign (30:41):
Thank you, Sam. And for the next question, I’ll go to Jen and Travis if they’re … And you could still kind of, I think, link it to the 20% piece if you’d like, where it’s like, where have you seen real signs of progress in the fight to address electric affordability? What is preventing those solutions from scaling fast enough to meaningfully impact customer bills? So it’s a question of scale. Travis, Jenna.
Travis Gibrael, Reclaim Our Power (31:08):
I mean, well, I’m going to stay on message with the ownership model is the problem. So right now in the Hudson Valley in New York state, there’s an effort to take over an IOU out there. It’s the smallest. It has the lowest customer satisfaction. But the assembly member that represents that district ran on a platform of taking over the IOU. She won and now she’s pushing that forward. So they released a feasibility study saying that even if given fair market just compensation for buying out the utility, they’re still going to save rate payers $30 billion over the course of the coming decades. And that’s even paying out the shareholders full market value. And that’s before you include all the other policy changes that you’re able to make. So you can implement some of these solutions when you don’t have the vested interest pushing back and trying to prevent them from happening.
(32:07):
So the argument that we would make is that while yes, it’s expensive to buy out a PG&E or to buy out a SCE, if that cost is spread out over 30 years, they like a mortgage, it could still be less expensive than the status quo, but then you’re also able to implement all of these kind of radical changes that would have compounding savings spread out over time. So that’s what we would say.
Jose Torres, Affordable Energy Campaign (32:34):
Thanks, Ravi. Jenna, anything you want to add there?
Dr. Jenna Roper, Central California Asthma Collabo (32:37):
I guess to the signs of progress, we’re relatively new to this space, which I would say is speaking to how important the issue is and how many more people are interested, groups and our residents. As a health organization, electricity affordability is top of mind. And so yeah, I think having more voices and attention on it will be good to help move the needle.
Jose Torres, Affordable Energy Campaign (32:58):
Thank you. And anyone else else add? Yeah.
Katie Ramsey, Sierra Club (33:00):
Great. Katie. There are three things that are really exciting me that I’ve seen as progress recently in the affordability space. First is, although it wasn’t as much as I wanted, I’m very glad that there was some decrease in the cost of capital awarded to the utilities. It wasn’t enough, but I think that that’s a good sign. I am most excited about the fact that there is a broad affordability coalition being organized out there with a lot of leadership from Monica and other people in this room to try to make sure that our different organizations and interests can at least start discussing internally and then face a united front against utilities in the opposition. That’s huge. That’s something that … I think that the environmental space has been kind of fractured for a while and this is a very positive development. The last thing I wanted to say is a really big sign of progress is recent elections in other states where … And Travis’s example of people winning elections based on taking on energy affordability is both an important sign of the times, like what communities want and also a huge leverage point for our organizations.
(34:07):
In every conversation, we can be pointing to this as very real interest from voters, rate payers, everybody to make a change here.
(34:18):
At the same time, I think the barriers that I have found most frustrating lately is you can make a technical case and legal case before the regulators. There’s political will behind it and still get a bad outcome. I think that this happens a lot at the Public Utilities Commission and I will talk to anybody about ideas on how to write that balance of power. I think that the fact that we’re headed into a gubernatorial election is a huge opportunity. I was very glad to see that Tom Steyer mentioned affordability in his early campaign ads. I think it should be front of mind for everybody and there’s space for all of our organizations out there to go and explain what that looks like, what it should look like. Use this opportunity to spread the positive solutions that we see. Any other ideas?
Sachu Constantine, Vote Solar (35:06):
Just one last thing. Yeah, go ahead, Touch. There are signs of positivity everywhere. I mentioned one of them that I think we shouldn’t forget, which is the technology’s here, whether it’s 1547 communications or the fact that Sunrun is putting out massive power plant sized virtual arrays every single day. These are signs of progress.What I worry about and what I think may be holding us back a little bit, and I want to give a shout out to my colleagues at the PUC. I spent time there. I know what a complex job they have, but when they are proposing changes to the DSGS that really just continue to make it a pilot, that don’t acknowledge that the market is here and ready to deploy at massive scale, but those markets are not open. The companies can’t flourish. People can’t go and buy solar and buy into these solutions because the markets don’t exist.
(36:04):
The value propositions aren’t there. And I know they’re trying their best to create a program that’s really measurable and really fits the sort of PUC pilot structure, but this is a market that we are trying to build. This is market transformation. We are ready for it. So that’s a good sign. And the fact that we are still making tinkering changes around very complex baseline and participation thresholds that you have to get over in order to participate shows that we are behind. The technology has passed where we are as policymakers and innovators and California needs to get back in that driver’s seat.
Jose Torres, Affordable Energy Campaign (36:43):
Thanks. Thank youht. Should we move on to the next questions? Okay. So we’ll move on to the next question. What does it take to ensure communities are not just participating in energy decisions, but actually benefiting from these distributed energy solutions? And I think folks have talked about that somewhat today, but let’s see what else we can add to that.
Sam Appel, United Autoworkers (37:07):
So I think, Sam Apell here, UAW. I think when we talk about the energy system, folks are usually, when it comes to jobs, think about electrical jobs and construction jobs. And for the history of RPS and in California has hinged on a really kind of generation defining balance of a labor centered strategy and a climate centered strategy where we focused on … And I’ve worked in climate and climate labor before, and I think it’s one of the gems of California policy that goes underappreciated. And I’m looking at a guy back there who’s been part of that, that when we did RPS, we pursued a holistic industrial strategy as it related to the workers in the construction sector by requiring that through the bucket system that most of the construction and most of the power be provided in California, and that eventually most of those jobs were union jobs.
(38:21):
So that created hundreds of thousands of high quality careers for people who wouldn’t have otherwise have access to them in California. Now, we need to start thinking about how we can do that with the supply chain. And Joe Biden and their folks and Jennifer Granholm and Company started to do that in partnership with the labor movement at the federal level. And they hit some major roadblocks, obviously, in mansion and company, but they started to pursue that sort of integrated industrial policy where climate strategy could be paired with building back the middle class in this country. So California as the fourth largest economy, as everyone loves to say, we actually have the … That’s the thing that we have. We have market power, and that’s the thing that we need to use to build high quality jobs in this space. And what we’re trying to point out, and our allies in the labor movement and climate community as well, are pointing out that supply chain is this not only enormous opportunity to drive affordability because it’s such a sticking point, but it’s also a huge source of jobs, middle class, high quality jobs for people who may not have graduated from college and can benefit from a high quality career in California.
(39:53):
And our climate innovation strategy has left those folks behind. We’ve mostly focused on building up IP and spinning out companies from the national labs and state research institutions to then go commercialize elsewhere. But we need to build things here for whatever we want to do and we should really be putting people to work in our communities to do it. I
Katie Ramsey, Sierra Club (40:20):
Want to build off of something you just mentioned, Sam, which is like, what are the industries that are going to create a lot of jobs and opportunities for our communities? And I think everybody sees it coming, but data centers are probably not going to be that. I think that when you hear folks from the data center coalition coming in and trying to pitch the economic benefits of these projects, I think it’s important to keep in mind that the job creating benefits of those data centers is pretty limited. I heard one of my colleagues working in another state say that they has the job development impact of an olive garden. You’re not talking about a whole bunch of community benefits if these come to your neighborhood. So knowing that data centers are being developed all over the place, what does California need to do to put in place protections to make sure that both all of our customers, but especially frontline communities are protected?
(41:10):
So I would say that one opportunity for generating real community benefits from these projects would be passing legislation that specifically requires community benefits for frontline communities, and it could be in the shape of distributed energy resources, whether that’s energy efficiency or rooftops solar projects, community solar projects, that should be baked into the expectation for any data center that comes into California. And then the other thing that I want to say on community participation in the process is there’s still an imbalance of power before all the regulatory agencies. Utilities can pay $2,500 per hour for their attorneys, intervener compensation, eligible organizations, see their claims scrutinized and torn apart in a way that utilities don’t. So that’s another place where the participation is lacking and could be fixed.
Jose Torres, Affordable Energy Campaign (42:08):
Jenna, did you want to go or Travis? Because I saw it look.
Travis Gibrael, Reclaim Our Power (42:16):
Yeah. So another one of my jobs is I also work as a solar contractor in the South Bay. And so I have just like some really firsthand experience of the power and importance of DERs. And my friend Lorenzo, who’s in the audience, would … I’d be remiss if I didn’t point out that NREL released a study, I think it was what, 2010, that showed that California can meet 76% of its energy needs just on the built environment alone. And so when you’re looking at two paths, one is which when you have like a mega corporation building a massive solar farm somewhere far away and then needing to build out transmission lines in order to connect it to the grid, you have basically one organization that benefits financially from that. And then you have all the rate payers of California that shoulder the cost of the infrastructure to make that work.
(43:08):
Whereas if you distribute that, if you build out on the distribution network using rooftop solar and storage, virtual power plants, but also front of the meter installations that maybe could be publicly owned or could be cooperatively owned, but that decentralize and the consolidation of ownership in the hands of individual corporations, then that not only has a powerful impact on ratepayers bills because we don’t have to build out the grid more, but it distributes the economic benefits in a significant way. I had one more thought, but I’m going to stop there.
Jose Torres, Affordable Energy Campaign (43:48):
Yeah. I was going to say, so we’re about to jump into Q&A for the audience in a second. So Jenna, I thought you could close, but I’ll add one more layer. How do we ensure that energy justice is integrated into these policy solutions, which Katie covered a little bit, and a couple of folks, of course, over here Sam on the worker side, but, and how do we ensure affordability solutions reach those most burden by high bills, which I think is connected to the previous question as well. But go ahead, Jenna.
Dr. Jenna Roper, Central California Asthma Collabo (44:16):
Yeah. I would just add that it’s really important to create ongoing dialogues with the CBOs and grassroots folks doing work in these areas and to just highlight what Katie said to create more robust community benefit agreements where the benefit is cheaper electricity would be one of the fastest and easiest ways to do that.
Sachu Constantine, Vote Solar (44:37):
Yeah. Big shout out to having a continuous presence in community discussions in coalitions, CBOs and community benefit agreements. That’s all great, but I want to ask you all to imagine something as we go into the Q&A. Let’s just imagine for a second that Senator Becker’s RA bill passes. And now we have actual credit, capacity credit that is given to distributed built environment solutions, whether it’s solar or storage or those thermostats. And then let’s further imagine in that situation, you have an enabling channel, an enabling market like DSGS, the way that the CEC is running it right now, and then you have a data center come along and they have a lot of load and they want to serve customers and they want people to like them for a variety of reasons. Well, here’s this market where they can pay someone to put solar and storage on their roof, to put energy efficiency in their home, to upgrade their building or maybe their charging infrastructure if they’re a community, if they want to get school buses out there that can provide load shift capacity or peak load reductions, now that money, all that money sitting there waiting, this wave of data center investment and AI investment that’s going to happen can be directed at the neediest communities, at the communities that are most vulnerable, at the technologies that can provide us with climate solutions, with resilience, with affordability.
(46:04):
We don’t have that easy mechanism for that to happen. And that’s why these bills that we’re seeing in California, and it’s why the governors in Virginia and New Jersey and Katie Hobbs has a program in Massachusetts, excuse me, has a program that are looking at affordability and innovative solutions for getting capital, getting investment to the people that need it so they can invest in their energy future, in their energy savings on their roofs, but at the same time, those investments are coordinated and put together as virtual power plants to drive costs down. And that is an equitable future where everybody has that same agency to enter into those markets, can receive the benefits of these investments and not just reserve it for particular capital intensive industries in Wall Street or the corporations that build those investments. Let’s find better ways to solve our problems, ways that can really enhance justice and climate at the same time.
Jose Torres, Affordable Energy Campaign (47:02):
Thanks, Haj. That’s a good way to close this section of the panel. So I’d like to thank the panel again and then we’ll jump into audience Q&A so you can ask some questions. So thank you all so much for … And I know I want to hear it more from you all, so let’s open it up to the audience. I see a hand back there, over here. If not, I can sit down. I can sit down. Yeah, go for it. Back there.
Katie Ramsey, Sierra Club (47:44):
There’s someone in the very back. A gentleman standing up?
Sachu Constantine, Vote Solar (47:50):
We must have said something controversial that’s going to stimulate conversation here. Yeah,
Katie Ramsey, Sierra Club (47:55):
Thank you. If not, we can try again.
Sachu Constantine, Vote Solar (47:56):
We can try again.
Katie Ramsey, Sierra Club (47:57):
Yeah, we should probably.
Speaker 9 (47:59):
Hi, I’m Tim Frank with the Construction Trades Workforce Initiative, and I want to thank you to The Climate Center for making sure that there’s a labor voice on the panel, actually good best practice. So if you look at the utility scale world, you’ll find that there’s very high union density. Most of the utility scale work that’s projects that are built in California are being built with union labor, but we find a substantial discrepancy with DER. Rooftop solar is mostly a non-union industry and an awful lot of the rate payer funded energy efficiency programs, et cetera, are really mostly using non-union labor, mostly relatively undertrained workers, which is actually a problem when you’re doing things like installing heat pumps that actually have refrigerants, where if you don’t install it right, you don’t get the right efficiency, you get leaky refrigerants that are high global warming potential gases and problems like that.
(49:03):
So you have both an equity problem and an environmental problem. And I’m wondering if all of you have some thoughts about how we can improve the quality of the workforce and the quality of jobs on the DER side.
Jose Torres, Affordable Energy Campaign (49:20):
Thank you for that question. Who wants to take it?
Sam Appel, United Autoworkers (49:23):
I’d like everyone else to answer this question, but I’m just going to give the obvious answer because I want everyone in this room to know the obvious answer, which is workforce standards. Okay.
Jose Torres, Affordable Energy Campaign (49:23):
Sachu Constantine, Vote Solar (49:39):
Jump in. Look, it’s really important that we have good training, that we have fair labor practices, but let’s not forget that almost every public project, which includes distributed projects, is built by prevailing wage labor. Let’s find ways to enhance that labor pool, get those standards in place to make it possible for both rooftop and commercial and community scale installers to take advantage of the skilled labor that California has. It does require a lot of skill for some of the jobs that are out there, and we are doing it. I think often this is pitted as kind of a tension or a problem that the rooftop solar industry is not making use of fair labor standards, exploiting labor. And I think that does disservice to the progress that we’ve made and the opportunity that’s in front of us to get a good labor force out there.
Jose Torres, Affordable Energy Campaign (50:38):
Thanks to anyone else. If not, we can go back to the audience. All right. No, thank you. Thank you, Tim, for that question. Go ahead.
Speaker 5 (50:47):
Thank you, sir. I’m Rosanna Herbert and I’m on the board of SMUD. And whenever I go to these conferences, people are always saying, “Oh my God, how can we get SMUD? How can we expand your territory?” And of course, PG&E has killed that, but what I’m very interested in is this claim that Tom Steyer has, that he can reduce rates by 20%. I’m wondering, has he talked to any of you? Is he talking to your groups or is this just a number that was thrown out? I’m just trying to see how real it is because the number one guy is now gone and Tom is at the top of the heap. And if I felt like he really could do it, I might try harder for Tom. So I’m just curious if you’re seeing any realness to that promise.
Jose Torres, Affordable Energy Campaign (52:02):
Yeah. Thank you for that question. Just noting the question that kind of leaks into campaigns of, but yeah, go for it y’all.
Katie Ramsey, Sierra Club (52:10):
Well, I feel like … I think I mentioned Tom Seyer, so I feel like I need to respond. He has not talked to me personally. I don’t know. I don’t know if he’s talking to anybody at the Sierra Club. I think that it’s in the interest of all of our organizations and all of us as activists to say what we think that should look like. I don’t know if the 20% number came from him in particular or anybody else, but having a target in mind for what we should be aiming for is really helpful and I think there are so many different tools that we should all be throwing out ideas. And if he’s not asking us, we should be telling him and others.
Sachu Constantine, Vote Solar (52:50):
I’m pretty sure he has my phone number, but phone hasn’t been ringing, but listen, governors, governors across the country are where the rubber first starts to hit the road. Federal wins can help or hurt, but the decisions are made from the governor on down. It is so important that the governors in the candidacy and that get elected are educated about this, that have a plan that set visionary targets. And we’re open to calls from any and all candidates to help educate them about what’s possible. Governor in New Jersey, governor in Virginia carried affordability talking points onto the inaugural stage. They all are talking about what solutions they need to bring because they are responsible for keeping the lights on, keeping them affordable, and making people safe and well supported by public infrastructure. So it’s a great leverage point. Let’s exploit it with all of them in a nonpartisan 503C way that is beneficial to everybody.
Travis Gibrael, Reclaim Our Power (53:54):
Thanks, Sachu. Yeah, I love this question. So he had an op-ed some months back that honestly felt like it could have been written by our organization, Reclaim Our Power. It was just tearing apart the IOUs and the bad incentives of the business model. And then his conclusion at the end of it was we need to introduce competition into the distribution network somehow, which I think is like an insane idea when you have a natural monopoly, like that doesn’t make any sense. So I think that’s the limits when you have someone with an entrepreneurial mindset who thinks that if all you just gots a hammer, everything looks like a nail kind of a thing. I did stop him in the hallway at the convention and I said, “I love that you’re talking about PG&E.” I gave him my card. I was like, “Come talk to our campaign.
(54:40):
We’ve got some great ideas. We could help educate you because we’re a C3. We’re not going to advocate for anything. We’re going to educate you about what changes need to happen.” And he didn’t take me up on the offer. Yes.
Pooja Agarwal, The Climate Center (54:52):
Yes.
Jose Torres, Affordable Energy Campaign (54:55):
I think that’s all the time we have for questions. So please find the panel list if you have more questions and happy to chat. Thank you so much.
Kurt Johnson, The Climate Center (55:13):
Yeah, this is going to be used as a lunchroom, so that’s where we’re being heard out and we will have a demand flexibility panel at 1:50. It’ll be spectacular. Come on back, 1:50.