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Two years after California endured a wave of rolling blackouts, Gov. Gavin Newsom called on lawmakers Friday to spend more than $5 billion to fortify the state’s troubled electricity grid.
In his budget proposal to the Legislature, the Democratic governor proposed creating a “strategic electricity reliability reserve” to support development of new power plants and industrial-scale battery storage.
Speaking to reporters in Sacramento, he called energy reliability “an endless struggle” in California.
In all, Newsom asked the Legislature for an additional $8 billion to advance the state’s clean-energy goals. His proposal includes $1.2 billion to help struggling Californians pay their electric bills.
The centerpiece of his plan is a $5.2 billion reliability reserve that aims to increase the state’s production capacity by 5,000 megawatts over several years.
His proposal comes a week after the Independent System Operator, which runs the grid, predicted potential shortfalls this summer of as much as 1,700 megawatts, the equivalent of one major power plant, during major heat waves.
Newsom painted an even grimmer picture: a gap of as much as 7,300 megawatts this fall. However, he acknowledged that estimate represents “the extreme of extremes ... the worst, worst-case scenario.”
Newsom’s announcement reflects a balancing act he’s been grappling with since August 2020, when hundreds of thousands of Californians lost power over two consecutive nights during a 110-degree heat wave that blanketed the West.
The blackouts, the first since the 2001 energy crisis, were caused in part by California’s embrace of clean energy.
The state gets about a third of its electricity from solar, wind and other renewable energy sources and has scaled back its use of natural gas. But the grid becomes prone to blackouts in the early-evening hours when solar panels go dark and air conditioners remain heavily used. Newsom and other state leaders have warned against retreating from green energy, but have also insisted that California must find a way to keep the lights on.
Newsom reiterated his support for solar power Friday, saying the Public Utilities Commission was right to step back from a controversial plan to dramatically reduce subsidies for homeowners who install rooftop solar. California must “provide protection and support to an industry that is essential for our future,” Newsom said. The commission is rewriting its proposal.
California officials say they’ve made considerable strides in shoring up energy supplies, including the addition of nearly 4,000 megawatts of battery storage that can stabilize the grid when solar power goes dark in the evening.
But the grid remains vulnerable as climate change leads to ever-worsening heat waves, and supply disruptions. The drought robbed the grid of thousands of megawatts of hydro power last summer, and knocked the Hyatt power plant at Lake Oroville completely out of commission for the first time since it opened in 1968. And in July, a massive wildfire in Oregon hampered transmission lines feeding Northern California and nearly caused another round of blackouts.
To improve reliability, the state has postponed the planned shutdown of several high-polluting, gas-fired power plants on the Orange County coast. The plants are now scheduled to be retired at the end of 2023. Ana Matosantos, Newsom’s cabinet secretary, said recently that the state is re-evaluating those plans in an effort to maintain reliability.
The governor, meanwhile, has floated the idea of postponing the scheduled 2025 closure of PG&E Corp.’s Diablo Canyon nuclear plant near San Luis Obispo. Diablo Canyon, the last nuclear plant in California, has 2,280 megawatts of generating capacity. “We can’t keep any options off the table,” Matosantos said.
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