Politics
Anger builds over sweeping change in the way most Californians will pay for electricity
With little debate two years ago, state lawmakers passed a complex energy bill that enabled a sweeping change in how most Californians are billed for electricity.
The legislation was what Pacific Gas & Electric had asked for from the state public utilities commission three months before: a transformation of electric rates so that households would pay a fixed charge each month in exchange for lower rates for each kilowatt hour they used.
Gov. Gavin Newsom submitted the bill as part of a massive 2022 budget revision. In four days, it was passed out of an Assembly committee hearing without discussion, approved by the full Assembly and Senate and signed by Newsom.
The state’s three largest investor-owned power companies that pushed for the change say it will encourage Californians to ditch cars and appliances that run on planet-warming fossil fuels and replace them with vehicles, stoves and heaters that operate on electricity from solar panels and wind turbines. They also say the new monthly fee would allow them to more evenly allocate fixed costs among customers.
But opponents say the legislation was a financial gift to PG&E, Southern California Edison and San Diego Gas & Electric, and will cause millions of Californians who live in small homes or apartments that use little electricity to pay more, while residents in large homes that use a lot of electricity will save money.
“If you wanted to design a policy that would send the signal that conservation doesn’t count, this would be it,” said Ken Cook, president of the Environmental Working Group.
Now, as governor-appointed members of the California Public Utilities Commission prepare to approve a $24 monthly charge at a May 9 meeting, some lawmakers who voted for the original legislation are trying to reverse it. A coalition of more than 250 environmental and community groups are also protesting the law, claiming that its approval smacks of an all too cozy relationship between utility companies, regulators and think tank researchers.
Opponents complain that the new law eliminates a $10 cap on fixed charges that had been in place since 2013, and that there is now nothing to prevent the utilities from raising it higher and higher.
“There is a trend nationwide of utilities trying to move more of the payments they extract from ratepayers into fixed fees because they get that money no matter what,” said Cook. “This is easy money.”
Terrie Prosper, the CPUC’s director of strategic communications, said in a statement that the new rate structure “makes going electric more affordable for everyone, regardless of income, geography, or the size of their home.”
Someone who powers all their home appliances and their vehicle with electricity would save an average of $28 to $44 a month compared to the current billing structure, the commission estimates. (The law does not apply to the Los Angeles Department of Water and Power or other municipal utilities.)
Prosper said customers would still be encouraged to conserve electricity in the evening hours when the grid is most stressed because the rate per kilowatt hour would be higher. This is similar to how current rates vary by the time of day, she said.
“The flat-rate design will not increase utility revenues,” Prosper said. “The flat rate is not a new fee — it simply reallocates how electricity costs are paid for on bills.”
Alex Stack, a spokesperson for Newsom, said that before the bill’s passage, the idea of the fixed fees had been repeatedly discussed at public meetings and budget hearings “as a potential solution for managing rising electric bills.”
Stack did not answer a question of whether Newsom proposed the bill at the utilities’ request.
And Prosper did not explain why the Newsom administration had introduced the fixed-fee language in a bill just days before the governor had to sign the budget and related legislation.
Already California has the nation’s second-highest electricity rates. Only rates in Hawaii are higher.
Michael Backstrom, SoCal Edison’s vice president of regulatory affairs, said the new fixed charge would ensure “everyone using the grid is paying for its operation and upkeep.”
“There is no additional cost being collected,” he said. “There’s no change to utility profits.”
PG&E and SDGE executives did not respond to several phone calls and emails seeking comment.
The inspiration for the new law came from a 2021 paper written by professors at UC Berkeley’s Energy Institute at Haas, which is partly funded by utility companies.
The paper detailed how costs for building renewable energy plants, burying power lines to reduce the risk of wildfire ignitions and compensating fire victims have pushed electric rates so high that they were discouraging Californians from buying electric cars and replacing their gas appliances.
The paper also said the rising number of homes with solar panels meant that fewer households were paying for these fast-rising expenses that go into calculating the rate per kilowatt hour charged by utilities.
The professors proposed that the rate per kilowatt hour be reduced while a new fixed charge be added to bills.
Fixed fees are considered to be regressive, since they are harder for lower-income people to pay than the wealthy. For this reason the professors proposed a fixed charge that was progressive and rose according to income.
Since 2018, Berkeley’s Energy Institute at Haas has received $205,000 from PG&E, $160,000 from Edison and $50,000 from SDGE, according to the institute.
The Solar Rights Alliance — a nonprofit that advocates on behalf of homeowners and businesses that use solar power — said the institute’s work of advising the government while receiving money from the utilities “suggests a serious conflict of interest.”
Severin Borenstein, an economics professor who was the lead author, said no organization is allowed to give more than 2% of the institute’s budget. And he said the electric companies had no influence on the 2021 paper.
“We are not doing the bidding of any of these people,” he said.
The utility companies liked the paper’s recommendations. In a March 2022 filing, PG&E argued for “swift adoption” of a fixed charge similar to what the professors had proposed.The company said legislation was needed “to either raise or ideally eliminate” the $10 cap.
Two months later, on May 13, 2022, Newsom released a 175-page revision to his proposed budget. In a paragraph on Page 63, he said he was proposing legislation “to adjust electricity rates to predetermined fixed charges.” That change, he said, would “enhance widespread electrification efforts.”
The state’s legislative tracking system shows the proposed language to do that first appeared on June 26, 2022. That’s when a measure, Assembly Bill 205, was amended to add pages of proposed energy legislation. Part of the bill allowed the state to buy power from the aging Diablo Canyon nuclear plant and to approve solar and wind farms over the objections of local governments.
It also contained language that eliminated the $10 cap and ordered the utilities commission to establish a fixed charge on an “income-graduated basis.”
AB 205 was what is known in Sacramento as a trailer bill to the state budget. The trailer bills are meant to enact law changes required by the governor’s proposed budget. But politicians have sometimes misused them to get complicated or controversial legislation passed with little public notice.
Lawmakers’ use of the trailer bills surged after voters passed Proposition 25, pushed through by Democrats and public employee unions in 2010, which said the budget and any related legislation would need just a majority vote, rather than two-thirds. Democrats now dominate the state’s legislature.
When AB 205 was introduced, a Democratic lawmaker called it “a crappy trailer bill that was dumped on us on late Sunday night.”
The next day, AB 205 and 28 other trailer bills addressing issues ranging from cannabis regulation to reproductive rights, were presented at a hearing of the Assembly Budget Committee.
According to a transcript, the committee’s leaders limited public discussion to one hour. The fixed electric charge was not mentioned.
“Unfortunately, having this one hearing for one hour mere hours after budget bills materialized is certainly not adequate,” said Assemblymember Vince Fong, a Bakersfield Republican, at the hearing.
The full Assembly and Senate passed the bill two days later. Newsom signed it the next day.
Last year, the three electric companies said that in accordance with AB 205 they were proposing fees as high as $128 a month for households with incomes over $180,000. Those earning $69,000 to $180,000 would pay a fixed monthly fee of as much as $73. Those making less than $69,000 would pay $15 to $34, depending on which company supplied their power.
The three companies said they would seek to increase the fixed charge if there was a “revenue imbalance” of 10%. Such an imbalance might occur if estimates of how much they would collect in fixed charges did not cover what they were losing in the lowered rates per kilowatt hour.
The companies’ proposal outraged some legislators.
A letter to the commission from 18 Democratic members of Congress pointed out that the average electricity consumption of each California resident had stayed nearly flat since the 1970s because of energy efficiency efforts.
“Imposing a high fixed charge may undercut these decades of progress by forcing people to pay their utility company before they even turn on the light switch,” the California representatives wrote.
In January, Assemblymember Jacqui Irwin, Democrat from Thousand Oaks, proposed a bill named AB 1999 to reverse much of what Newsom’s bill had done.
With criticism growing in late March, the commission said it was proposing a more modest monthly fixed charge of $24.15. Lower-income people would pay either $6 or $12 a month based on their circumstances.
But the commission’s proposal did not stop the complaints from households across the state or the coalition opposed to the new rate structure.
In an analysis conducted for the coalition, Josh Plaisted of Flagstaff Research estimated that households using more than 6,000 kilowatt hours a year would save more as they increased their electricity use. For example, a 2,500-square-foot home with a swimming pool might save more than $300 a year, he said.
“I think this is a surprise to most people,” Plaisted said. “You have low energy users subsidizing current high energy usage.”
The opposition was angered even more when Speaker Robert Rivas (D-Hollister) and other Assembly leaders stopped debate on Irwin’s bill late last month with a procedural move that shelved it for the legislative session.
Cynthia Moreno, the speaker’s press secretary, disputed claims that the Assembly leaders had killed the bill.
“We are continuing work on the issue this year, including possible amendments to ensure any changes in the fixed charge are revenue neutral for utilities and not a means to increase their profits,” she said.
Moreno said that Rivas appreciated the “legislative scrutiny of the PUC and the governor’s plan, and that oversight will continue.”
Billionaire Larry Ellison has stepped up, agreeing to personally guarantee part of Paramount’s bid for rival Warner Bros. Discovery.
Ellison’s personal guarantee of $40.4 billion in equity, disclosed Monday, ups the ante in the acrimonious auction for Warner Bros. movie and TV studios, HBO, CNN and Food Network.
Ellison, whose son David Ellison is Paramount’s chief executive, agreed not to revoke the Ellison family trust or adversely transfer its assets while the Warner Bros. transaction is pending. Paramount’s $30-a-share offer remains unchanged.
Warner‘s board earlier this month awarded the prize to Netflix. The board rejected Paramount’s $108.4-billion deal, largely over concerns about the perceived shakiness of Paramount’s financing.
Paramount then launched a hostile takeover, appealing directly to Warner shareholders, offering them $30 a share. Paramount on Monday extended the deadline to Jan. 21 for Warner investors to tender their shares.
“We amended this Offer to address Warner Bros. stated concerns regarding the Prior Proposal and the December 8 Offer,” Paramount said in a Monday Securities & Exchange Commission filing. “Mr. Larry Ellison is providing a personal guarantee of the Ellison Trust’s $40.4 billion funding obligation.”
Warner Bros. Discovery did not provide an immediate comment.
Warner stock jumped 3.5% on the news to $28.75. Paramount shares climbed 4.2% to $13.61 and Netflix fell 1.2% to $93.23.
The Ellison family acquired the controlling stake in Paramount in August. The family launched their pursuit of Warner Bros. in September but Warner’s board unanimously rejected six Paramount proposals over the last three months.
Paramount started with a $19 a share bid for the entire company. Netflix has offered $27.75 a share and only wants the Burbank studios, HBO and the HBO Max streaming service. The Netflix bid is a mix of cash and stock. It envisions Warner Bros. spinning off its linear cable channels, including CNN, into a new publicly traded company, Discovery Global, by the middle of next year.
Paramount upped its all-cash offer to $30 a share Dec. 4, in the waning hours of the auction.
That night, Warner Bros. Discovery’s board voted unanimously to accept Netflix’s $72-billion offer (the total value of the deal is $82.7 billion). The company, in regulatory filings, has cited Netflix’s stronger financial position.
Since then, Paramount executives launched their hostile bid and held meetings with Warner investors in New York, where they echoed the proposal they’d submitted in the closing hours of the auction.
On Monday, Paramount also agreed to increase the termination fee to $5.8 billion from $5 billion, matching the one that Netflix offered. Paramount would have to pay Warner that amount should the deal collapse.
Three Middle Eastern sovereign wealth funds representing royal families in Saudi Arabia, Qatar and Abu Dhabi have agreed to provide $24 billion of the $40.4-billion equity component that Ellison is backing.
The Ellison family has agreed to cover $11.8-billion of that. Initially, Paramount’s bid included the private equity firm of Jared Kushner, President Trump’s son-in-law, but Kushner withdrew his firm last week. Previously, Paramount dropped the Chinese firm Tencent from its financing consortium over regulatory concerns.
“In an effort to address Warner Bros.’s amorphous need for ‘flexibility’ in interim operations, Paramount’s revised proposed merger agreement offers further improved flexibility to Warner Bros. on debt refinancing transactions, representations and interim operating covenants,” Paramount said in its statement.
Paramount confirmed that the Ellison family trust owns about 1.16 billion shares of Oracle common stock and that all material liabilities are publicly disclosed.
“The Ellison Trust has financial resources well in excess of what would be required to meet its commitments to be entered into in connection with the Offer and the second-step merger [with Paramount], including, among many other assets and financial resources available to it,” Paramount said.
Paramount has been aggressively pursuing Warner Bros. for months, yearning for the scale the Warner assets would bring the company that, before the Ellison takeover, had suffered from years of under-investment.
David Ellison was startled earlier this month when the Warner Bros. board swiftly agreed to a deal with Netflix for $82.7 billion, including some of Warner’s debt, for the streaming and studio assets. He alleged during a CNBC appearance that the Warner Bros. board had failed to seriously consider the merits of his family’s bid.
Paramount subsequently launched its hostile takeover offer in a direct appeal to shareholders. The Warner Bros. board urged shareholders to reject Paramount’s offer, which includes $54 billion in debt commitments, deeming it “inferior” and “inadequate.” The board singled out what it viewed as uncertain financing and the risk implicit in a revocable trust that could cause Paramount to terminate the deal at any time.
Warner added that its shareholders also would have equity in the new Discovery Global, which Warner believes could fetch about $3 a share. Paramount has said its deal is more straightforward. The Ellisons, who enjoy friendly relations with Trump, have told shareholders their deal would face a smoother regulatory review.
Larry Ellison and Trump are on friendly terms, and Ellison’s software company Oracle is part of a consortium taking over social media app TikTok. That deal is expected to close next month.
Trump’s support was also key to the Ellison family’s takeover of Paramount. Before that deal was approved, Paramount agreed to pay Trump $16 million to settle a lawsuit over “60 Minutes” edits that most legal experts called frivolous.
Trump has said that he wants CNN to be included in the Warner Bros. sale. Trump has long chafed over CNN’s coverage.
In the past, the president indicated that he favored Paramount’s pursuit of Warner Bros. — but he has been more circumspect in recent weeks, making complimentary comments about Netflix Co-Chief Executive Ted Sarandos.
Executives from both Paramount and Netflix have argued that they would be the best owners and use the Warner Bros. library and movie and TV production capabilities to boost their streaming operations.
Netflix also announced Monday that it has refinanced part of a $59-billion bridge loan with cheaper and longer-term debt.
Bloomberg contributed to this report.
When Mr. Trump signed an executive order in March that promised to restore the Smithsonian Museum “to its rightful place as a symbol of inspiration and American greatness,” historians and other observers were anxious about what he meant.
Months later, the president confirmed their worst fears.
“The Smithsonian is OUT OF CONTROL, where everything discussed is how horrible our Country is, how bad Slavery was, and how unaccomplished the downtrodden have been,” he wrote in a social media post in August.
The post, which came a week after the White House ordered a review of the museum’s exhibitions, offered the most candid look to date at what many of Mr. Trump’s executive actions on diversity have targeted: the history and experience of Black people in the United States.
High-profile Black leaders have been fired as the president builds an overwhelmingly white administration. Federal websites have been scrubbed to sanitize the country’s history of slavery and discrimination. And other government agencies, like the National Park Service, have also removed exhibits on slavery. At the same time, Mr. Trump has reinstalled statues that glorify Confederate soldiers.
In his first year, Mr. Trump has set out to rewrite the nation’s history by erasing the scars of its original sin.
Photographs by Al Drago, Doug Mills, Maansi Srivastava and Bettmann Archive, via Getty Images.
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More than 80,000 service members who went missing in action in previous conflicts are still unaccounted for. However, through research and new technology, the Defense POW/MIA Accounting Agency estimates the remains of 38,000 fallen veterans could be recoverable. Nonprofit organization Project Recover is working with the agency to bring some of those service members home through complex underwater missions.
“This is a great American story here,” former Navy Rear Admiral Tim Gallaudet said. “Our work is to use technology, like underwater drones and scuba diving gear, to find the platforms that these members perished on and then do the DNA analysis of detecting and recovering their remains and matching them to those that are missing.”
Project Recover members stand with folded American flags during a ceremony honoring fallen World War II aviators. (Project Recover)
Gallaudet also serves as a Project Recover advisory council member. The group was founded by Dr. Patrick Scannon. He came up with the idea in 1993 when he was touring the Palau islands with his wife and discovered a downed plane from World War II.
“That 65-foot wing essentially changed my life,” Scannon said in an interview with GoPro.
NEWLY RELEASED AMELIA EARHART DOCUMENTS REVEAL VIVID DETAILS OF JAPAN’S ROLE IN SEARCH FOR DOOMED AVIATOR
Project Recover teams have located dozens of aircraft sites around the Palau islands associated with nearly 100 service members who went missing in action.
“The recovery is difficult. We first have to find the aircraft or ships,” Gallaudet said. “And then we’ve got to go determine if there are any remains there and then ID them, match them to the service members. “
In 1944, U.S. officials determined the Palau islands were a crucial part of a larger mission to liberate the Philippines. The effort to capture the island of Peleliu ended up being a costly effort for the U.S. Located around 500 miles away from the Philippines, the island held an airfield, which U.S. officials believed could be used to launch an attack during their larger mission. More than 10,000 Japanese troops were stationed on Peleliu at the time.
U.S. Air Force B-52 bombers are parked on a military airfield. (B-52 Bomber Down)
The battle was expected to last just a few days but ended up going on for 74. The U.S. began its bombardment by dropping more than 600 tons of bombs, but the Marines had little intelligence on enemy positions. Japanese troops hid in coral caves and mine shafts around the islands. The initial aerial attacks had little impact unless pilots flew dangerously close to the island.
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On Peleliu, 1,800 Americans were killed in action and more than 8,000 were wounded or missing. Nearly all the 10,000 Japanese troops were killed in action. Across the Palau islands, the U.S. had carried out nine major air campaigns in which around 200 aircraft were lost.
Now Project Recover is working to bring some of those service members home.
“There were three service members on the aircraft that perished, a lieutenant and then two enlisted crew members. And over the last few years, we were able to recover the remains of all three. And we didn’t identify them all at the same time. It took forensic analysis and DNA. Technology. But the last one was finally identified,” Gallaudet said.
Lt. Jay Manown, AOM1c Anthony Di Petta and ARM1c Wilbur Mitts took off for a bombing mission in September 1944. They were conducting pre-invasion strikes in preparation for the invasion of Peleliu when their plane spun out of control and crashed into surrounding waters.
“The plane was hit by enemy fire, and it burst into flames,” Di Petta’s niece, Suzanne Nakamura, said in an interview with Media Evolve.
Project Recover located the plane in 2015. After more than a dozen dives to investigate the wreckage, teams began removing the remains of the three service members. Lt. Manown was the last to be repatriated.
“We held the ceremony in his hometown in West Virginia, and the relatives of all three service members came to that final ceremony,” Gallaudet said.
The three nieces of the men have become especially close.
A diver examines a wreck during an underwater mission to locate and recover missing U.S. service members. (Project Recover)
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“We’ve communicated beautifully and become friends through this experience and almost a sisterhood of type,” Manown’s niece, Rebecca Sheets, said in an interview with Media Evolve.
“We’ve talked so much by phone and feel so close,” Mitt’s niece, Diana Ward, told Media Evolve. “This is just a joy to meet each other in person, and we’re just sharing the emotion we’ve felt about bringing our uncles home.”
The three women have also connected over how their grandmothers, or the mothers of Manown, Di Petta and Mitts, may have felt about their sons finally coming home.
“We have a connection because our uncles were involved in not only defending the freedom of the United States, but as human beings who fought together and died together,” Nakamura said.
AMELIA EARHART MYSTERY EXPEDITION HALTED AS RESEARCHERS SEEK ANSWERS ON MISSING PLANE
Including their work in Palau, Project Recover has completed more than 100 missions across 25 countries. They have repatriated 24 missing Americans and have located more than 200 missing in action awaiting further recovery efforts. The group is raising money for a mission it hopes to complete in 2026 — the search for a B-52 aircraft that disappeared during a training accident.
“It’s off the coast of Texas. We’ve not yet found the aircraft. And of those eight service members, they all had families,” Gallaudet said. “There are about 32 of those family members still alive today who want the answers to know what happened to their loved ones.”
In addition to the more than 80,000 missing-in-action service members, 20,000 are missing from training accidents. The Defense POW/MIA Accounting Agency is not permitted to allocate funds toward a search effort for the eight men who disappeared along with their B-52 because the crash occurred during a non-conflict training accident.
“Not having found the wreck yet, we don’t know what the cause of the failure was. And so it’s our goal to find that wreckage and then take the remains and repatriate them to the families,” Gallaudet said.
U.S. Air Force B-52 crew members pose for a group photo. (B-52 Bomber Down)
The Air Force Bomber was on a routine training mission in February 1968 when it disappeared from radar and radio contact. The Air Force immediately conducted an extensive nine-day search of the flight path but found no trace of the bomber. As the military concluded its search, determining it went down in an unknown location, three pieces of debris washed ashore in Corpus Christi, Texas.
“This B-52 off the Texas coast hasn’t been located yet, but we think we know where the area is. We’re going to find it,” Gallaudet said.
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More than $300,000 has been raised for the mission so far. Project Recover estimates another $200,000 is needed to search for the eight men. If the organization can locate the remains, the Defense POW/MIA Accounting Agency will be able to allocate resources for a recovery effort.
You can learn more about Project Recover and the missing B-52 and donate to help with the search on Project Recover’s website.
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