Some 40 communities in California have implemented bans or restrictions on the use of natural gas, which have ignited a backlash from some of California’s prominent Black and Latino leaders, who indicate that the prohibitions on the fuel are a form of regressive tax on low- and middle-income residents. This battle over the future of residential and commercial use of natural gas in California is an example of regressive taxation.
This example and a growing number of examples in other parts of the United States appear to be the result of a campaign by the Rocky Mountain Institute, which first published its “Carbon-Free City Handbook” in 2017. The Handbook has been used as a manual by many local governments. The Rocky Mountain Institute works with the World Resources Institute, Bloomberg Philanthropies, and other groups that oppose conventional energy to aid cities in implementing near-term renewable energy projects.
About 86 percent of the homes in California use natural gas. Banning the direct use of the fuel for cooking, home heating, water heaters, and clothes dryers, will force consumers to instead use more electricity which, on an energy-equivalent basis, costs four times as much as natural gas. That ban would essentially result in a hidden energy tax and a massive burden on consumers in California, which has the highest poverty rate in the United States. When accounting for the cost of living, 18.1 percent of the state’s residents are living in poverty, which is equivalent to about 7 million Californians—a population about the size of Arizona’s.
Further, the bans on natural gas are occurring at the same time that California’s electricity prices are increasing and that the state’s electricity grid has been shown to be unreliable. State residents’ electricity demand has been affected by rolling blackouts during heat waves and power cutoffs to prevent fires caused by old equipment. In fact, blackouts are so common that thousands of Californians have bought small generators powered by fossil fuels to assure reliable power.
California’s residential electricity prices are already the sixth highest in the country. Last year, the average cost of residential electricity in California was 19.22 cents per kilowatt-hour, which is 47 percent higher than the national average residential electricity price of 13.04 cents per kilowatt-hour. On December 3, the California Public Utility Commission approved an 8.1 percent electricity rate increase for Pacific Gas & Electric, which will cost the average residential customer in that service territory an additional $13.44 per month. That rate increase was approved the same week that San Jose and Oakland approved bans or restrictions on the use of natural gas. Both cities are in PG&E’s service territory.
With the closure of the 2,256-megawatt Diablo Canyon nuclear plant pending in a few years, the state’s goal to be carbon-free no later than 2045, bans on gasoline and diesel vehicles, and the enormous amount of electricity that will be needed to fuel several million new electric vehicles, it is clear that California will suffer blackouts and escalating energy prices for years to come.
Replacing natural gas appliances with electric appliances is expensive. In the Central Valley, new-home buyers would pay $250 more a year to operate an all-electric home—and that is before a planned 30 percent increase in electric rates over the next few years. The move to electric appliances would also increase demand for electricity, which could result in more blackouts. More than 120 localities have passed resolutions against natural gas bans.
The Fight from Black and Latino Leaders
Black and Latino leaders are objecting to a recent move by the California Public Advocates Office—an agency charged with looking out for the state’s energy consumers—to join forces with the Sierra Club. Last year, the California Public Advocates Office signed a “common interest agreement” with the Sierra Club to investigate “tactics by Southern California Gas Company to perpetuate reliance on gas in buildings” and whether the utility tried to undermine new efficiency codes. The California Public Advocates Office wants state regulators to levy a $255 million fine against the Southern California Gas Company—the largest residential supplier of natural gas in the United States.
The Public Advocates Office has been obtaining information from Southern California Gas using their official capacity and sharing it with the Sierra Club, which then seeks legal actions against the company with proprietary information. This is collusion with a government agency in cahoots with a non-profit to pervert the stated purpose of the agency, which is to make sure consumers do not pay too much for energy. Their actions, in fact, make energy more expensive for consumers, as is demonstrated above.
The California Restaurant Association and Southern California Gas have filed law suits to stop the natural gas bans. Southern California Gas sued the California Energy Commission, claiming that by allowing the bans and promoting building electrification, the agency was creating “underground regulations” that were not permitted under state law. The law suit also seeks an order that would force the agency to “vacate its anti-natural gas policy.”
The “green” policies of California are colliding with the reality of energy affordability and the growing concerns of Black and Latino leaders about the cost impacts on their communities. Black and Latino leaders also realize that there is collusion between government agencies and outside groups to achieve their political ends. California should serve as an example to Joe Biden who wants to implement similar policies. Politicians that want to implement “green energy” on the public without looking at the ramifications and the costs involved will only serve to hurt the economy and prosperity of the United States.