The state of California is currently voting on a bill that would allow Gov. Gavin Newsom’s administration to purchase large amounts of electricity. This measure aims to prevent power outages in the state by strengthening energy supplies and supporting the development of the emerging offshore wind industry on the West Coast.
Last year, five companies paid about $750 million to lease land off the California coast for wind turbine projects. If completed, these projects could generate enough electricity to power 3.5 million homes during heat waves, avoiding strain on the state’s power grid.
However, the state’s major utilities have been reluctant to commit to purchasing power from these offshore wind projects due to concerns about the project’s cost and schedule. In addition to building the turbines, the projects require port improvements and new electricity transmission lines from sea to land.
The bill before the Legislature would allow the state to purchase the electricity, with funds coming from a surcharge on Californians’ electric bills. Consumers would only pay the surcharge once the wind power projects are operational, which is expected to be in a few years.
Opponents of the bill, such as Republican Sen. Brian Dahle, argue it would increase costs for consumers across the state. However, proponents argue that investing in offshore wind projects will ultimately lead to savings on electricity bills in the long term.
California has a renewable energy mandate that requires all electricity to come from renewable or carbon-free sources by 2045. Offshore wind projects are considered crucial to achieving this goal, particularly because they generate the most electricity at night, when solar energy is less available.
Proponents of the bill also argue that it would be more efficient and profitable to sell all electricity from offshore wind projects to the state rather than splitting it among multiple utilities. They believe this consolidated approach will help control costs and keep rates lower for consumers.
Under the law, the Ministry of Water Resources would be the electricity purchasing authority and its powers would expire in 2035. Another vote would be needed to expand his purchasing authority.
California has made significant efforts to transition away from fossil fuels, including passing regulations banning the sale of most new gasoline-powered cars by 2035. However, during this transition, the state faced challenges in maintaining a reliable, clean energy supply. In the past, extreme heat waves have strained the power grid and led to blackouts. To counteract this, the state has invested in a strategic reliability reserve, including diesel generators and the expansion of some gas-fired power plants. The bill aims to reduce reliance on these carbon-emitting measures and prevent overuse of the reliability reserve by imposing penalties on utilities that fail to meet energy demand.