On October 30, 2020, the California Public Utilities Commission (CPUC) and the State Water Resources Control Board hosted a joint workshop for water utilities and assorted consumer advocacy groups to address water affordability and operational challenges aggravated by the COVID-19 pandemic. (The workshop was held pursuant to Rulemaking 17-06-024: Water Affordability During COVID-19.) Since January 2020, the number of customers behind on their water bills has steadily risen in the following months up until the time of this workshop. This has not been a surprise due to the massive unemployment caused by COVID-19.

            Unfortunately, demand and competition for water has remained undiminished, even as California continues to face rising water shortage challenges. People still need to water their lawns, flush their toilets, and grow their food. Cultural differences between northern and southern California, priority disagreements between urban and agricultural interests, and an increasingly lopsided curve of demand and supply from a growing population in an area greatly affected by climate change have exacerbated the problems. And the icing on the cake in solving these water use tensions is Article X, section 2 of the California Constitution which declares that all Californians have a constitutional right to water.

            As a result, consumers using the water system without the ability to pay for it have aggravated a financially strained system. As of 2014, California was ranked as the number 1 state in need of water infrastructure repair. With customers unable to pay their bills, how can we tackle this problem? How can a system without the ability to repair itself continue to deliver safe drinking water? As an additional layer to this quandary, there are over 100 investor-owned water utilities in the CPUC’s jurisdiction, as compared to just a handful of gas or electric utilities. With each water utility bringing its own unique and complex problems to the table, ensuring the supply of safe and affordable drinking water presents a problem far more complex than electric power distribution.

            As a short-term measure, the CPUC has imposed emergency protection for consumers to avoid disconnection due to unpaid bills. Unfortunately for many, the CPUC only oversees investor-owned utilities, and thus the CPUC measure only applies to a limited number of people in the state. Others will need to find alternative means of keeping their water on. More importantly, neither water shut-offs for delinquent customers nor emergency measures preventing disconnection due to unpaid bills address the long-terms financial challenges for water utilities with respect to maintaining an aging water infrastructure, which continues to depreciate. At this point, we must put a Band-Aid on the system and float it forward, so to speak, as we continue to discuss what equitable solutions we can offer to enforce this constitutional right for California residents.

Wesley Clark

On August 27^th, 2020, the California Public Utilities Commission (CPUC) approved Agenda Item 27, a Biomethane Standard Interconnection Tariff (R. 13-02-008). In layman’s terms, this rulemaking created a standard process for interconnecting renewable natural gas producers with any investor-owned utility pipelines. For many citizens, this groundbreaking ruling represents a huge step towards decarbonizing our power infrastructure, since it creates an efficient process for lessening our reliance on fossil fuels in our power system.

Furthermore, there is one more significant issue. As more and more users begin to leave the gas system, fewer consumers, oftentimes low-income communities, are left to continue paying for the maintenance of the entirety of the infrastructure, which are costs that would otherwise have been supported by the customers that have switched. Similar issues arise with the Power Charge Indifference Adjustment (PCIA) exit fee which is paid by electricity users that want to buy their power from Community Choice Aggregates instead of their traditional utilities; this charge was used to supplement the transmission costs for utilities. While similar to the gas system change, the PCIA charge is triggered by users simply switching providers, rather than moving off the transmission infrastructure entirely. Thus as Gridworks, a consulting organization focusing on transforming our energy system for the future, puts it, we have two paths forward:

However, there is also different side to this debate.  Since much of the natural gas system, especially the transmission pipeline portion, is prone to leakage, it is one of the largest contributors to atmospheric pollution. Thus, some view this ruling as allowing the natural gas industry to entrench itself in an effort to stay relevant and provide different kinds of gas, contrary to calls for widespread electrification of buildings, cars, and homes. For instance, the city of Berkeley recently became the first in the nation to prohibit natural gas pipeline hookups to new buildings. Consequently, the system of pipeline infrastructure is slowly falling into disarray with an uncertain plan for its future, as communities are likely to continue to leave the system.

1. A smart, managed path that maximizes benefits and minimizes costs for everyone
2. An uncontrolled path is reactive and costly

The upshot of Gridworks’ analysis of these two paths is that California needs to put a plan in place to address this soon so as to avoid the inevitable scramble of supporting an inefficient and outdated gas system. Yet, this is easier said than done. In effect, this will require creation of a formal state-wide effort ensuring a sound and sensible transition off the system, while adjusting gas customer rates in a way that incentivizes the exploration of alternative external funding sources to recover gas transition costs. Unfortunately, the 2019 report by Gridworks, a leader in the energy consulting field, offers no further guidance than big picture considerations, and a grim reminder that this transformation will be one of the most challenging tasks facing us in the 2020 decade.

Wesley Clark