Underrepresented Groups Suffer From California’s Natural Gas Bans
California municipalities and regulators are pursuing forced electrification mandates at the expense of their residents, according to community leaders and elected officials concerned the state is pursuing flawed policies that are tone deaf to constituents who benefit from low natural gas prices.
As Calif. Assemblyman Jim Cooper (D-Elk Grove) recently explained on the Power Hungry podcast:
“Most of the heating in California is done – heating and cooking is done by natural gas, not electric. Electrical rates are very high and what California’s trying to do is – these advocates, Sierra Club and all the [environmental justice] people – they want to have a single source. They want to have electricity for everything.
…And the problem with that is right now our rates for electricity utilities in California are the highest in the nation. On average, we pay 55 percent more than folks do in neighboring states. We also pay a dollar more a gallon in [gasoline]. So the people that can afford it the least right now with Covid, the economy, the homelessness – they’re being forced to pay more because of people like the Sierra Club that really don’t have their interests in mind.”
Bans of Convenience
California’s municipal gas bans cater to an affluent few. Electricity in the state costs 60 percent more than the U.S. average, and the state boasts the highest poverty rate in the nation, meaning that many don’t have the luxury of bearing any additional expense from electrifying every aspect of their home. The average median household income of the 40 cities in the Golden State that have passed a reach code banning future use of natural gas appliances in buildings totals $116,379 – approximately $45,000 (63 percent) more than the California average. On the list are multiple outliers within the state, with Menlo Park, Piedmont, and Los Altos earning upwards of $220,000.
Before the COVID pandemic, 18.1 percent of state residents lived in poverty and 33 percent were classified as low income. According to a 2016 study by Energy Efficiency For All, any modest electricity rate increase would threaten these vulnerable households with mass shut-offs and economic dislocations. Already since that study was published, electricity rates have risen 10.9 percent and continuing to trend upwards.
According to Robert Bryce, a nonresident fellow at Foundation for Research on Equal Opportunity, if California continues this “electrify everything” trend, consumers will be forced to buy electricity, which is more expensive than natural gas on an energy-equivalent basis:
“Assuming a 100 percent efficient use of electricity, California residents are paying about $56 per million Btu (MMBtu) for the electricity they consume. In 2019, the average residential price of natural gas in California was $13.32 per MMBtu….Thus, by banning gas-fired appliances, California politicians are forcing homeowners and renters to pay four times as much for their energy as they would if they were consuming natural gas directly.” (emphasis added)
An Unaddressed Problem
A rising tide doesn’t raise all boats equally and underrepresented groups are poised to suffer the most from higher electricity costs. Regulators are supposed to keep considerations like this in mind, representing ratepayers and pushing for price reductions, but California’s Public Advocates Office (CalPA) ignored this mandate when it signed a memorandum of understanding with the Sierra Club to investigate and fine SoCalGas for “tactics by Southern California Gas Company to perpetuate reliance on gas in buildings.”
Timothy Alan Simon, the chairman of the California Black Chamber of Commerce, and a former member of the California Public Utility Commission, recently spoke to Robert Bryce on the topic, criticizing CalPA for going against its mandate to keep prices low:
“Gas, he said, is a cheaper energy source than electricity. Despite that fact, he said,
‘CalPA has joined an environmental group that doesn’t give a rat’s ass about the consumer.’”
His sentiment is shared by Jennifer Hernandez, an attorney for The Two Hundred, a coalition of Latino civil-rights leaders who have sued the state of California over its energy and housing policies. She is confused by the state’s electricity planning, or lack thereof:
“’We don’t have enough electricity on the grid now. And they want to ban natural gas?’ she continued, saying that the only way California can reach its climate goals ‘is to quit consuming energy.’”
In the rush to seize on electrification, proponents have ignored the cost impacts on the impoverished, the middle class and often non-white citizens. Researchers at the UCLA Institute of the Environment and Sustainability published a recent study that concluded:
“Low-income residents of disadvantaged communities, who have the least flexible work schedules, the least access to high-efficiency appliances and energy management systems, and inhabit the most poorly insulated housing stock, will be most adversely affected by [exacerbated daily peak electricity loads and increase total household expenditures on energy].”
Over the past few years, the successive gubernatorial mandates for renewable energy have driven up prices to record highs, disproportionately impacting people of color. According to the Public Policy Institute of California statewide survey on Californians & the Environment published this July, 54 percent of African Americans are unwilling to pay more for electricity if it were generated by renewable sources. Forty-eight percent of Latinos responded that they were unwilling and Asian Americans polled at 46 percent.
Overall, a thin majority says they are not willing to pay more. And while that thin majority might change in the future, one cannot raise prices for millions on a simple majority. Any change in that response would have to be significantly larger to support the full scale electrification California is proposing.
California has yet to make a good economic case for electrification to a majority of residents. It is not that people aren’t concerned about their carbon footprint, it is that people are more concerned about the end of the month. State Sen. Steven Bradford (D-Gardena), hit on this point at a California Air Resources Board during a hearing on race and equity in October:
“It’s not enough to continue to say, ‘Poor people want zero-emission cars.’ That’s the farthest thing from their mind. They want a roof over their head. They want a safe neighborhood to live in. They want a good school to send their kids to. I don’t know a single person who wants dirty water, dirty air, dirty soil. But that’s not what keeps these folks up at night.”
California hasn’t figured out a responsible method to address its overall emissions and by allowing municipalities to set the tone, state officials are doing a disservice to all Californians. Without coherent state planning that takes the burden of high prices into account, all California would accomplish is less than half a percent reduction in global CO2 emissions at the expense of energy affordability and reliability in their state.
As the state does nothing and allows wealthy first movers to leave the gas grid, those who rely on affordable natural gas are threatened with bearing the expense of the entire grid, adding additional costs that they cannot afford. Even though the electrification mandates are passed in one jurisdiction, the increased energy burden can be felt across the state and lead to economic dislocation and reduced wellbeing.