American Oil and Gas Reporter - August 2020 - 34

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FIGURE 2
California and U.S. Residential Electricity Prices (2009-2019)
20
18

California Residential
Electricity Price
(Up 30.4% since 2009)

Cents per Kilowatt-Hour

14
12

U.S. Residential
Electricity Price
(Up 13.3% since 2009)

10
8
6
4

2
0

2009

2010

2011

2012

2013

2014
Year

scale batteries to solve the problem. They
claim large-scale commercial batteries
will be able to store power during high
levels of renewable output and then deliver
that power to the grid when wind and
solar output is low.
But batteries are not a sufficient answer
because of the large seasonal variation in
renewable output. Wind and solar output
in California in December and January
is less than half that of summer output.
Today's commercial batteries are rated
to deliver stored electricity for only 2-10
hours. No batteries exist that can store
electricity in the summer and then deliver
it in the winter when renewable output is
very low.
Rising Energy Costs
Californians will experience the shock
of rapidly rising electricity prices as

2015

2016

2017

2018

2019

Energy Information Agency (2020)

more renewable energy is added to the
power system.
To try to achieve the "deep decarbonization" required by SB 100, California
will need to keep 90% of traditional
power plants as backup while adding increasing amounts of wind and solar. Traditional power plants will be run inefficiently at low utilization with priority
given to renewables. Total system capacity
must double and triple as 100% renewable
output is approached.
A 2016 study by Brick and Thernstrom projected California's power capacity would need to rise from 53.6 gigawatts (GW) to 90.5 gw at 50% renewable output. Capacity would need
to rise to 123.6 gw to achieve 80% renewable output.
As a result of rising system capacity,
Brick and Thernstrom concluded that, to

achieve 50% renewable penetration,
wholesale electricity prices would need
to rise from 5.2 cents a kilowatt-hour to
9.6 cents/kW-hr. For 80% renewable penetration, prices would have to rise to 14
cents/kW-hr, a near tripling of wholesale
electricity prices.
In 2019, California residential electricity prices were 19 cents/kw-hr, 47%
higher than the national average. California rates increased 30.4% during the
last decade, rising more than twice as
fast as national prices (Figure 2). California mandates for 100% renewable
energy will double or triple electricity
prices in the next two decades.
Yet, more than 30 cities covering almost 10% of California's population
now prohibit gas appliances in new
housing. The elimination of gas appliances and rising electricity prices will
cause a painful reduction in Californians'
standard of living, particularly in lowincome households.
Jim Nathanson, executive director
for The Empowerment Alliance, says,
"The UCLA study is a disservice to the
hardworking people who are trying to
make ends meet during these tough
times. Low cost, abundant, domestic
natural gas not only helps American
families stretch their household budgets
when it comes to more efficient appliances, but creates American jobs and
bolsters national security."
Removing gas from California homes,
or any other state in the union, will not
measurably improve either indoor or outdoor air quality. Nor will it measurably
reduce global warming. But residents
will lose the flexibility, efficiency and
low-cost operation of gas appliances. In
addition, homeowners will be exposed
to the full measure of rising state electricity
prices. California residents should reject
bans on gas appliances.
❒

STEVE
GOREHAM

Steve Goreham is executive director for the Climate Science Coalition of America and is a policy
adviser for The Heartland Institute, as well as being a speaker, freelance writer and researcher on
energy and environmental issues. He is a frequently-invited guest on radio and television. He is the
author of three books on sustainability, climate change and energy, including, "Outside the Green
Box: Rethinking Sustainable Development." Goreham holds an M.S. in electrical engineering from
the University of Illinois and an M.B.A. from the University of Chicago. He has more than 30 years
of experience in engineering and executive roles at Fortune 100 and private companies.
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