Preserving Choice for Consumers

Don’t put all your eggs in one basket.” It’s an idiom we’ve all heard, though I doubt many of us have any experience with eggs beyond the plastic ones filled with candy that our kids collect on Easter. Real eggs aren’t made from plastic, though – they’re delicate. If you aren’t careful with your basketful of eggs, you could lose everything. No omelet for you. Recently, California has seen the efforts by lawmakers to create a framework that would remove energy choice and force everyone to use electricity for all end-uses. California has long been at the forefront of the battle against climate change through restrictions and regulations that limit emissions of greenhouse gases and other air pollutants. We boast a cap-and-trade program that is the cornerstone of a regulatory regime in its continuous success is helping California reach its ambitious energy and reduction goals. In fact, the cap-and-trade program has proven to be so successful that it was extended in 2017. In a report released last year by the California Air Resources Board, we saw that California is on track to achieve its reduction goals while boosting the economy in the process. Yet, state lawmakers and regulators argue that in order to achieve our reduction goals, we must move toward 100 percent electrification. The recent approval to require solar panels on all new homes by 2020 is an example of public policy decisions that fail to consider the impact these regulations will have on middle- and working-class families. Increased costs will hit them the hardest. In addition, forcing homeowners and developers to invest significant sums in existing technology limits the potential investment for even more efficient technologies currently under development. Another saying goes, “The road to hell is paved with good intentions.” Reality becomes quite grim when you look at the consequences of this recent mandate. California is already facing a housing crisis, as home prices rise exponentially due to onerous regulations and high fees homebuilders must abide by. As these costs increase, home prices become progressively out of reach for many middle- and working-class families. I appreciate the unique approach to keep California at the forefront on energy regulations, but we need to ensure that we don’t lose sight of affordable and reliable energy choices. State regulators have openly admitted that their end goal is 100 percent electrification, clearly giving a preference to a specific technology and energy type, regardless of the cost and impact this will have on actual communities. Electrification would eliminate existing reliable, affordable and efficient energy sources such as renewable natural gas. The vast majority of Californians use natural gas as their preferred energy source – it’s used for cooking, for warming a house in the winter months and for cooling it down when that unbearable August heat rolls through. So many people rely on this energy source. To eliminate it completely will increase costs across the board, but will especially impact manufacturers, developers and restaurants. Mandating 100 percent electrification could increase annual home utility bills by almost $900 compared to mixed-fuel homes. Simply, removing energy choice would signal that California is not open for business and will force business owners to start looking at other options that make sense. If we put all our eggs in one basket and remove energy choice, we’ll see negative returns as businesses leave the state. Legislators argue that if you drive up costs, then you’ll drive behavior change. However, you can only drive behavior change if people have the capital to make that change. In order to keep California at the forefront of the battle against climate change, we need to preserve choice while implementing responsible policies that don’t increase the cost of living and doing business in California. Stuart Waldman is president of the Valley Industry and Commerce Association, a business advocacy organization based in Van Nuys that represents employers in the San Fernando Valley at the local, state and federal levels of government.