Assembly bill is a Trojan Horse for costly hydroelectric project near Joshua Tree

Posted May 13, 2020

By Barry Moline, Neal Desai and Michael Boccadoro

California is setting the stage nationally on how to move successfully toward a clean energy future. We’re on track with aggressive renewable energy standards, reducing emissions, and investing in green technologies that are transforming our future.

Integrating more cost-effective energy storage is a critical piece of that clean energy puzzle as it will help balance the intermittent generation that comes from renewables and provide electric grid reliability.

Municipal utilities strategically plan and secure power supply that takes into account the needs of their customers, assuring they meet California’s green goals while providing affordable and uninterrupted service. It is working well.

So then why is Florida-based NextEra desperately seeking legislative approval to squeeze its way into California’s energy market?

Let’s be clear – it’s to ensure the construction of its long-struggling Eagle Mountain pumped hydroelectric project near Joshua Tree National Park, one of our state’s most loved parks.  NextEra’s scheme to force a buyer for its Eagle Mountain project would come with a price tag of several billion dollars, as well as irreparable harm to an underground aquifer at Joshua Tree and the habitat of state and federally protected wildlife, including the iconic desert bighorn sheep.

Eagle Mountain hasn’t found a buyer on the open market after decades of pursuit because the high-costs, high-risks and low-benefits just don’t make sense.

Assembly Bill 2255 is the latest attempt to require California ratepayers finance the bailout of the Eagle Mountain project.  
The bill calls for a study, then quickly pivots to create an unprecedented procurement process by the California Independent System Operator so that agency could become the Eagle Mountain power buyer.

Why is this a problem? With this legislation, California Independent System Operator could manipulate the energy market by buying storage projects from favored corporations and collecting the costs through the “transmission access charge,” paid for by California ratepayers who are already struggling to pay their bills. The transmission access charge is overseen by the Federal Energy Regulatory Commission, meaning this new system would expose California ratepayers to the whims of regulators in Washington, D.C.

The transmission access charge has been skyrocketing in recent years, a whopping 250% rise since 2009. We owe it to California ratepayers to avoid unnecessary cost increases and to manage new infrastructure investments carefully. Especially now – in a climate of extraordinary uncertainty, where businesses are struggling to stay alive and families have lost jobs and can’t pay rent – the Legislature should be focused on addressing California’s affordability crisis, not making it worse.

Thankfully, the Assembly Natural Resources Committee appears to have shelved AB 2255 for the year, presumably because enabling an economic and environmental disaster during a pandemic is bad policy and bad politics. But we know NextEra won’t give up.

For example, Assembly Bill 2736 was just gut-and-amended to greenwash the Eagle Mountain project and the political perils of a ratepayer funded bailout. The bill purports to protect Joshua Tree, but it does no such thing; indeed, the environmental community that has been working for decades to defend Joshua Tree all oppose AB 2736 whereas NextEra supports it. That should tell legislators everything they need to know.

We need to choose the right investments that use resources wisely – both economic resources and environmental resources. These bills, and whatever other legislative effort NextEra has in mind to force the procurement of its project on the backs of California ratepayers, would fail on both counts.

This legislative effort isn’t really about encouraging a general movement toward clean energy storage or environmental protection. If successful, it will increase costs, threaten affordability, manipulate the energy market, harm the environment and give windfall profits to a single company. As soon as possible, the Legislature should make it clear it won’t fall for NextEra’s Trojan Horse.

Barry Moline is executive director of the California Municipal Utilities Association, Neal Desai is senior director of field operations at National Parks Conservation Association,  Michael Boccadoro is executive director of the Agricultural Energy Consumers Association, They wrote this commentary for CalMatters.