Job Killer Update: 29th Bill Will Increase California Energy Costs

The California Chamber of Commerce has added to the job killer list a bill that recently was amended to impose on both public and investor-owned utilities an extreme, costly mandate to procure 5,000 megawatts (MW) of energy from renewable sources. Adding AB 893 (E. Garcia; D-Coachella) brings the total number of job killer bills identified this year to 29.  Currently, in addition to AB 893, only one other job killer remains active, AB 3080 (Gonzalez Fletcher; D-San Diego), which passed the Senate last week and is awaiting action by the Governor.

CalChamber has identified AB 893 as a job killer because it would discourage energy-dependent businesses from growing in California and would add new overhead costs for all California employers. AB 893 also creates incentives for utilities to purchase out-of-state power to satisfy the mandate, threatening even more California jobs.

Unrealistic Procurement Numbers
California’s investor-owned utilities (IOU) and publicly owned utilities (POU) already use a diverse mix of renewable resources and are on track to meet and exceed California’s aggressive Renewable Portfolio Standard (RPS) goals.

According to CalChamber’s analysis, AB 893’s procurement mandate significantly increases costs by removing the utilities’ ability to meet RPS goals in a cost-effective manner. AB 893 will inevitably increase energy costs for California ratepayers and requires all of this procurement on an expedited timeline—some utilities must submit a plan a mere nine or 10 months from now, giving the Public Utilities Commission a deadline of just 30 days to evaluate those plans.

Significant Cost Increases
Per kilowatt hour electricity rates in California are already among the highest in the nation.  As of April 2017, some ratepayers pay a premium of 68% for electricity and 73% for natural gas over the national average, which has an impact on businesses’ ability to be competitive if they continue to be located in California.

The RPS standard uses the “least-cost, best-fit” competitive bidding process to meet California’s ambitious goals in a cost-effective manner. According to CalChamber’s letter, AB 893 thwarts that process by forcing utilities to purchase more expensive power and pass along increased rates to California ratepayers.

AB 893 is on the Senate Floor. The Legislature has until August 31 to send bills to the Governor’s desk.
For up-to-date information on the job killer list, follow @CAJobKillers on Twitter.
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The California Chamber of Commerce (CalChamber) is the largest broad-based business advocate to government in California.  Membership represents one-quarter of the private sector jobs in California and includes firms of all sizes and companies from every industry within the state.  Leveraging our front-line knowledge of laws and regulations, we provide products and services to help businesses comply with both federal and state law.  CalChamber, a not-for-profit organization with roots dating to 1890, promotes international trade and investment in order to stimulate California’s economy and create jobs.  Please visit our website at www.calchamber.com

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