Where does electricity come from? California has no idea

A recent commentary in The Wall Street Journal, “California’s Plan: Make the Poor Sweat in the Dark,” precisely explains the issue with electrifying everything: “Forcing consumers to rely almost entirely on electricity requires it to be available and affordable.”

Jonathan Lesser, a senior fellow with the National Center for Energy Analytics, writes that California’s “headlong rush” toward electrification of transportation, home heating, and everything else, is running into the limits of demand response:

While mandating electrification, California’s regulators have also imposed pricing strategies that punish consumers for using electricity when they most need it. Coupled with the rising costs of wind and solar generation—and the cost of backstopping that generation with batteries—electricity is becoming increasingly unaffordable.

For nearly 20 years California’s investor-owned utilities have been installing “smart meters” that measure electricity use in real time. The utilities have instituted time-of-use pricing, which charges higher rates when electricity demand peaks. The goal is to encourage consumers to reduce electricity usage.

Southern California Edison charges residential customers 73 cents per kilowatt-hour between 5 and 8 p.m. during the summer. That’s significantly higher than the average annual residential rate in California, which was more than 32 cents through November 2024. San Diego Gas & Electric charges some residential customers $1.16 per kilowatt-hour on “Reduce Your Use Event” days, which the California Public Utilities Commission allows the company to declare up to 18 times a year. Further north, Pacific Gas & Electric charges residential customers 56 cents per kilowatt-hour during the summer between 4 and 8 p.m.

To put that in perspective, in inland counties of California, which have “the highest poverty rates in the state,” residents “received monthly electric bills in summer 2024 exceeding $1,000, despite efforts to reduce their air conditioning use.”

So why would Pacific Gas & Electric (PG&E), California’s largest electric utility, decide that it’s time to develop “virtual” power plants? Follow the money:

The Biden administration’s $15 billion loan to Pacific Gas & Electric, made four days before Donald Trump took office in January, exemplifies the magical thinking of electrification proponents. The loan will be used by California’s largest electric utility to develop “virtual” power plants. PG&E envisions supplying homeowners with solar-and-battery storage units that the utility can tap into whenever the state’s large-scale power generating plants—wind, solar and battery systems—can’t supply enough electricity. But small-scale solar and battery storage is costly and won’t eliminate the need for huge new investments in transmission and distribution infrastructure to meet peak electricity demand. These virtual plants will be tapped out at the same time as their larger-scale brethren.

PG&E’s other virtual power plants will be paying consumers to allow the company simply to shut off air conditioners and boilers when there isn’t enough electricity to power them—or enough transmission and distribution capacity to deliver the juice.

Forcing homes and businesses to become even more dependent on electricity and then restricting their access to the electricity required is madness masquerading as public policy.

Mr. Lesser is right. As he writes, “Is the purpose of the state’s electrification efforts to force poor people to sweat in the dark? It seems that way.” In Minnesota, we might freeze instead of sweat, but the outcome will be the same.