California's aggressive plans to build a clean-energy economy could mean higher energy prices for consumers and businesses, according to a report released Monday by the Little Hoover Commission.
The report largely focuses on California's so-called renewable portfolio standard, which requires utilities to obtain a third of their electricity from renewable sources such as wind and solar by 2020. Utilities like PG&E are well on their way to meeting that goal.
Titled "Rewiring California: Integrating Agendas for Energy Reform," the report urges Gov. Jerry Brown to "bring greater clarity on the aggregated costs and consequences of the energy policies being implemented in California" and calls on him to prioritize planning in a way that minimizes costs.
The Little Hoover Commission, a nonpartisan state oversight agency created in 1962, investigates state government operations.
California's renewable energy standard is just one piece of the state's energy policy, which includes a groundbreaking cap-and-trade program to reduce greenhouse gas emissions, support for rapid expansion of rooftop solar systems and promotion of large, utility-scale solar thermal power plants in the desert.
The commission complained that California has adopted several policy initiatives, all being implemented simultaneously, without a full accounting of the consequences.
"The state has not produced a comprehensive assessment of the total cost of implementing this group of policies, inhibiting consumers and businesses in their ability to plan for this new future," the report warns. "This sets the stage for a potential ratepayer revolt that could dampen support for environmental stewardship policies."
Little Hoover Commission Chairman Daniel Hancock called on Brown to take the lead on providing clarity about the costs and consequences of the state's energy policy.
"Without more careful calibration of these policies, Californians may wind up paying more than necessary for electricity and the state may unnecessarily degrade pristine habitat in its rush to implement its renewable energy goals," Hancock said in a statement.
Regulators with the California Public Utilities Commission, which approves contracts between utilities and renewable energy developers, rebutted many of the report's findings.
The PUC's Energy Division has been working on a five-year rate forecasting project and found that, overall, utility rates are expected to increase by just 2 to 3 percent a year over the next five years.
"This tracks inflation," said Terrie Prosper, a spokesperson for the PUC, on Monday. "The drivers of the rate increase are the general need for infrastructure improvements, most of which would be needed even if there was not a (renewable energy) mandate."
The PUC's Division of Ratepayer Advocates released a statement saying that its research suggests that rates may increase cumulatively as much as 30 percent in the next eight years, largely because of the need to improve the gas pipeline system.
Contact Dana Hull at 408-920-2706. Follow her at Twitter.com/danahull.
To access the Little Hoover Commission report, go to www.lhc.ca.gov.