One of America’s largest power utilities, San Francisco-based Pacific Gas and Electric, which serves half of California’s public schools, announced Tuesday that it will oppose Assemblymember Nancy Skinner (D-Berkeley)’s AB 1186, or the “Saving Energy, Saving Schools” bill.
Skinner formally introduced the bill at Claremont Middle School in North Oakland on May 22, and said it is aimed at making California schools more energy efficient by using part of revenues generated by utilities in emissions credits to upgrade energy systems in schools. Supporters say the bill will reduce the amount of money schools spend on energy by replacing aging electrical fittings and introducing new energy-saving technologies.
California’s 10,000 public schools pay an average $1.1 billion each year in energy bills, more than they spend on books and supplies, according to Skinner.
But PG&E officials say they will oppose Skinner’s proposal to use revenues generated by utilities through the cap and trade system, which is designed to reward corporations for reducing their carbon footprint. The cap and trade program will begin in January 2013, and will allow utilities to earn credits for reducing emissions.
PG&E spokesperson Lynsey Paulo said that PG&E, along with other California utilities, prefers that the allowance value from cap-and-trade be used exclusively for the benefit of ratepayers. “PG&E has long supported energy efficiency measures, but we want it to be done in a way that supports our customers,” Paulo said.
Paulo said the energy giant was opposed to the bill because it would take away money intended to offset the cost of energy for consumers. She added that PG&E has the support of consumer groups that seek to ensure that money earned by utilities in emissions reduction credits is refunded directly to consumers, who will bear the cost of emissions reductions programs.
“While we support energy efficiency in schools, we believe that 100 percent of the allowance value should be returned to our customers, who are already paying for a robust set of programs that encourage energy efficiency in our schools,” Paulo said. “We do have several programs that do promote energy efficiency, and this bill would siphon off some of the money we want to return to our customers to relieve their cost burden.”
Paulo said PG&E’s customers were already investing $592 million annually in energy efficiency programs, adding that between 2010 and 2012, PG&E allocated $1.3 billion for energy efficiency programs in its budget.
In response to PG&E’s opposition to the bill, Assemblymember Skinner said improving energy efficiency in California’s schools would cut energy consumption statewide and reduce the need for utilities to build new power plants.
“We spend over $1 billion a year to cover energy bills for our public schools,” Skinner said. “Improving efficiency in our schools puts taxpayers’—who are also ratepayers—funds back into the classroom and it can cut electricity use statewide.”
In her introduction of the bill last week, Skinner said over 70 percent of California’s school classrooms were over 25 years old, a situation that resulted in them using more energy than necessary and school districts spending a disproportionate amount of their money on utility bills. If implemented, Skinner said, her proposed energy efficiency measures would allow schools to save $300 million, nearly 20 percent of what they currently spend on energy bills. This, she argued, would allow schools to invest more on books, supplies and on paying teachers.
Matthew Freedman, a staff attorney at consumer advocacy group The Utility Reform Network (TURN), described Skinner’s proposal to use part of cap-and-trade revenues to retrofit schools as a “bad idea.”
“By proposing to reallocate some of these revenues to schools, the bill would prevent the money from being returned to all customers, including low income families who will see their electric bills increase under cap-and-trade,” Freedman said.
“There is no free money here,” Freedman said. “Diverting cap-and-trade funds to schools means that the money is not returned to consumers.”
Paulo also said that regulations from the California Air Resource Board, which oversees the enforcement of California’s emissions regulation programs, require that allowances allocated to electricity distribution utilities must be used exclusively for customers.
“We strongly support the Air Resource Board’s requirement that the allowance value be used for the benefit of ratepayers,’” Paulo said. “PG&E, Southern California Edison, San Diego Gas & Electric and several customer groups are aligned in the proposed method for returning to customers the revenues from the auction of AB 32 cap-and-trade allowances.”
The bill is expected to come before the California Senate and Assembly before August 31, 2012.