If $4.00 for a gallon gasoline is pinching your checkbook, just wait until you see your electric and natural gas bills in the coming year.

California gets 42 percent of its electricity from natural gas.  Many homes also use natural gas for heating, cooking, and hot water.  Natural gas prices increased 45 percent in the past year.  The Wall Street Journal recently reported that gas costs may double soon. 

Gas and coal power 70 percent of America’s grid.  Coal prices have already doubled, following demand and oil price increases.  This has caused electrical rate increases across the nation.  Virginia is looking at a 29 percent rate increase this summer.  Oregon saw a 10 percent rate increase last year with another 9 percent by next January.  Maryland residents will see their electric bills rise almost 8 percent in June, increasing home electric costs by $137 a year to $1,800 annually.  Maryland’s commercial customers can expect rate hikes of 27 percent to 41 percent price by the summer.

Higher costs boost conservation efforts as consumers and business cut back and become more efficient users of energy.  In addition, government mandates and subsidies boost conservation efforts, albeit unevenly and without the efficiencies of the market. 

Conservation alone is not enough, however.  As our population and economy grows, we use more energy.  Further, the growing economies of China, India and others will continue to put great pressure on world supplies of oil and gas, keeping world prices on a constant upward ramp.  This means that conservation at home will do little to moderate energy prices as the cost of energy is determined by a global market.  Americans should conserve when it makes sense to do so – but we should not confuse conservation by itself with a comprehensive energy policy. 

California is especially vulnerable to natural gas price hikes since we get a plurality of our electricity from burning gas.  Accounting for the fixed costs of power generation and distribution, this means we could be looking at a 20-30 percent increase in electrical costs in the near future. 

Increased use of wind power can actually increase our dependence on natural gas since wind needs to be backed up by large natural gas power plants.  Solar can help offset peak energy demand on hot days, but it is still as costly as natural gas and some five to ten times more costly than coal, hydro, or nuclear power. 

Adding to California’s dire energy picture is our current policy to reduce greenhouse gas emissions by 25 percent in 12 years, and another 80 percent on top of that by 2050 (returning per capita emissions to levels not seen since wood-burning Colonial days).   A just completed federal study on the effects of the proposed Lieberman-Warner Climate Security Act of 2007, a national version of California’s AB 32 greenhouse gas cap-and-trade program, showed it would add costs of $723 costs per household by 2030.  That’s $723 more than whatever the higher costs for energy will add to the family budget. 

It is growing more apparent by the month that turning to modern nuclear power is the only way we can realistically address the twin challenges of reducing greenhouse gas emissions and reducing our reliance on imported oil and natural gas.  While California continues to dally on the energy front, making the false hope that somehow wind, solar, and conservation can do it all, other states are moving ahead.  There are new nuclear power plants starting the licensing process in Maryland and Texas with bipartisan legislation looking at nuclear power in Washington, Wisconsin, Illinois and other states.  Ohio’s Gov. Ted Strickland, a Democrat, just signed a bill that requires electric utilities to generate 25 percent of their energy through renewable energy including new nuclear reactors by 2025.

California needs to get serious about energy.  Failure to get energy policy right will cause California to hemorrhage good paying jobs while doing absolutely nothing for the environment.  Since California is the most electrically efficient state in the U.S. and the most environmentally advanced, it makes no sense for us to effectively ship jobs to coal-fired states back East, or, worst yet, to India or China.  In fact, the most environmentally intelligent thing to do would be to encourage an increase in California goods and services since our environmental impact per value of goods produced is low compared to dirty, coal-fired economies such as China.  

(For more on nuclear power, greenhouse gas emissions and imported fuel, see my paper in UC Berkeley’s Ecology Law Currents, “Relative Risk: Global Warming and Imported Fossil Fuels vs. Nuclear Power” http://www.boalt.org/elq/C35.01_05_DeVore_2008.04.10.php).

Chuck DeVore
California State Assemblyman, 70th District
www.ChuckDeVore.com