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Expert says move to green energy could keep bills on the rise

REGION: Look for another surge in electric rates

REGION: Look for another surge in electric rates
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Going green will raise monthly utility bills for consumers who already pay among the nation's highest electric rates, an energy expert said last week.

Over the last 10 years, consumers were hammered by steep increases as a result of California's failed experiment with deregulation and spiking natural gas costs.

Now they are in for more rate hikes as utilities shift much of their power from fossil-fuel sources to expensive green sources such as the sun, said James Bushnell, research director for the University of California Energy Institute in Berkeley.

Bushnell made the assessment during a conference call with reporters from around the nation in a telephone energy seminar sponsored by the Foundation for American Communications in Pasadena.

San Diego County residents, who are served by San Diego Gas & Electric Co., saw rates soar 14.9 percent over the last three years and 65.8 percent over the last decade, said Christy Heiser, a company spokeswoman.

Heiser said several factors were behind the sharp increase, one of the chief components being fast-rising natural gas costs.

In Riverside County, which is served by Southern California Edison, rates have climbed by one-third over the last 10 years, according to a chart provided by the utility that serves several counties north of San Diego.

Edison's rates started out higher than SDG&E's a decade ago, then were frozen during deregulation by state law. Edison charges have risen in the years since, but remain lower than those set by SDG&E.

The power shift from fossil fuels to green fuels is being driven by the state's campaign to curb industrial emissions of greenhouse gases. Climate scientists warn that a buildup of carbon dioxide and other heat-trapping gases in the atmosphere could trigger coastal flooding, extended droughts and more wildfires.

Hoping to avert such scenarios, California ordered its three largest for-profit utilities -- SDG&E, Edison and Pacific Gas and Electric -- to convert 20 percent of their electricity to green or renewable power by 2010.

The jolt of green-related rate increases could be softened somewhat by the simultaneous, but unrelated, expiration of high-priced electricity contracts signed during the energy crisis of 2000-01.

At this point, it looks like none of the state's three big utilities will make the 2010 deadline, though Edison will come close, industry officials say.

Each of the companies, however, is laying the groundwork to generate substantial amounts of electricity from solar panels, wind farms and geothermal plants that tap the power of underground geysers.

And efforts are under way to push utilities, by either legislation or ballot initiative, to secure more green power.

A moving target

"This will cause upward pressure on rates," Bushnell said. "But (the trend) also coincides with some of the costs of the 2000-01 crisis dropping off the books. So customers will see slowly rising rates rather than otherwise declining rates."

In 2001, during the height of California's disastrous experiment with deregulation, state politicians signed expensive 10-year contracts for electricity in a desperate but largely successful bid to halt the then-meteoric rise in energy bills.

Those contracts are about to expire.

Bushnell said how much the focus on green power will affect rates depends on the mix of new sources.

"If we can get to 20 percent mostly with wind, the additional costs won't be too extreme," he said.

That, he said, is because wind power is fairly inexpensive while sun power is not.

Bushnell said the desert power plants that employ an array of solar collectors to turn water into steam and generate power are generally two to three times as expensive as wind turbines; rooftop solar panels that convert the sun's rays into electricity tend to be three to four times as expensive.

It will take technological advances to make sun power competitive with fossil fuels, he said.

Some advances are being made.

Bill Powers, an engineer and activist in San Diego, said an emerging "thin film" solar panel made from cadmium telluride is showing promise because it is less expensive to make than the conventional silicon-based panel.

Sempra Energy, parent company of SDG&E, has proposed building small power plants in the Arizona and Nevada desert with the material.

Higher rates but average bills

Even without the state's nation-leading move to green fuels, Californians already pay high rates, Bushnell said, citing U.S. Energy Information Administration data.

In 2007, the typical California resident paid 14.37 cents per kilowatt-hour, well above the national average of 10.64 cents, Bushnell said.

Only residents of Hawaii, Connecticut, New York, Massachusetts, Maine, Alaska, New Hampshire and New Jersey paid higher rates.

The most affordable rates were in the Rocky Mountains and Midwest.

In Southern California, residential rates averaged 15.83 cents per kilowatt-hour in San Diego County and 15.2 cents per kilowatt-hour in Riverside county, according to utility figures.

On the other hand, Californians' monthly bills run about the same as those in other parts of the country, said Gil Alexander, a spokesman for Edison.

That's because they tend to use less electricity.

Alexander said Californians use less because the state has a moderate climate and is leading the way in making homes and appliances more energy-efficient.

Rates tend to be higher, he said, because California long ago moved away from coal out of concern for the environment.

Coal is one of the dirtiest fuels, but also one of the cheapest. Coal accounts for just 8 percent of Edison's electricity, for example, Alexander said, but about half the nation's.

California depends on cleaner natural gas for half its electricity, Bushnell said.

And it doesn't help, he said, that "natural gas prices are about four times what they were eight years ago."

California's average residential rate rose 27 percent over the last decade, Bushnell said. That topped most other states, save for Nevada, Texas, Oregon, Washington and several on the East Coast. Nevada's rose fastest at 56 percent.

While California's attempt to force entrenched monopolies to compete in a free market failed miserably, some states have enjoyed a measure of success with deregulation, Bushnell said.

But he said the move to create free markets has not reshuffled the order of most expensive to cheapest states.

Contact staff writer Dave Downey at (760) 745-6611, ext. 2623, or ddowney@nctimes.com.

Copyright 2012 North County Times. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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