Wildland fire in California
A California-based public utility was linked to several wildfires that destroyed agricultural operations and homes.

California may bail out utility linked to massive fires

A bill that would allow a public utility to pass on its fire-related liabilities to ratepayers awaits signature on Gov. Brown's desk

Northern California wineries and farmers could be on the hook for higher utility costs if a bill now on Gov. Brown’s desk is signed. These costs come as legislators agreed to effectively bail out a large, public utility said to be complicit in conflagrations that destroyed homes, wineries and other property last year.

At the end of the day, PG&E ratepayers could be on the hook for billions of dollars in costs related to numerous fires within the utility’s coverage area – fires reportedly linked to poor maintenance efforts to keep trees and other flammable vegetation away from power lines. Those arguing for the legislation say the utility could go bankrupt if not afforded these protections.

California residents already pay some of the highest utility rates in the country, at nearly 20 cents per kilowatt hour, on average, or about 40 percent more than the national average.

Drive around California and you’ll see plenty of examples where farmers and commercial operations are trying to combat these higher costs through the utilization of solar. Homeowners who can afford it are also jumping on the bandwagon as California mandates that utilities charge tiered rates for electricity to encourage conservation.

I remember during the California energy crisis responsible for the first-ever recall of a sitting governor, an idea was offered that the state would move to a system whereby consumers could choose their utility provider, regardless of the district in which they lived. For instance, if I lived in a high-rate district but wanted instead to buy my power from lower-cost provider hundreds of miles away, I’d be able to do that – sort of like shopping the best price on a new vehicle, groceries or gasoline. This never materialized, leaving customers in the same monopolized system as before.

California’s costly, uncompetitive utility rates and increased regulatory costs cannot bode well for the sustainability of commercial agriculture as it continues to be asked to produce more food for a growing world population.

TAGS: Crops Grapes
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