Brexit’s Energy Lesson For California, Et Al
Marita Noon  | June 27, 2016

“California’s largest utility and environmental groups announced a deal Tuesday [June 21] to shutter the last nuclear power plant in the state.” This statement from the Associated Press reporting about the announced closure of the Diablo Canyon nuclear power plant should startle you. The news about shutting down California’s last operating nuclear power plant is disappointing—not startling. What should pique your ire is that the “negotiated proposal,” as the Wall Street Journal (WSJ) called it, is between the utility company and environmental groups—with no mention of the regulators elected to insure that consumers have efficient, effective and economical electricity.

Who put the environmental groups in charge? Not the California voters. But unelected environmental groups—and their bureaucratic friends in various government agencies—have been dictating energy policy for the most of the past decade.

California has a goal of generating half of its electricity from renewable sources by 2030 and environmental groups are calling for the state officials to replace Diablo’s generating capacity with “renewable power sources.”

Bloomberg Intelligence analysts’ research concluded that Pacific Gas & Electric Co. (PG&E) “would need 10,500 megawatts of new solar installations to replace all of Diablo Canyon’s output” and that, without including potential costs of new transmission lines or back-up resources for solar, will cost $15 billion.

Actual costs, Bloomberg says: “could be lower because the company expects to compensate for lower demand and replace only part of the production.” Why will there be lower demand? The WSJ explains: “the plan calls for new power sources to furnish only a portion of the electricity that Diablo Canyon generates, assuming that greater energy efficiency in the future will also curb some power demand.”

All of this is announced while California is experiencing, and expecting more, blackouts due to “a record demand for energy” and because “there just aren’t enough gas pipelines for what’s needed,” according to CNN Money. “Southern California,” reports WSJ, “is vulnerable to energy disruptions because it relies on a complex web of electric transmission lines, gas pipelines and gas storage facilities—all running like clockwork—to get enough electricity. If any piece is disabled, it can mean electricity shortages. Gas is the state’s chief fuel for power generation, not coal. But the pipelines can only bring in about 3 billion cubic feet of working gas a day into Southern California, below the daily demand, which gets as high as 5.7 billion cubic feet.”

California’s Independent System Operator, which runs the state’s power grid, therefore, has warned that there may not be enough natural gas which could result in “outages for as many as 14 summer days.” CNN Money reports: “Natural gas has played a bigger role for California as the state has tried to phase out coal and nuclear power.”

As coal-fueled electricity has been outlawed in California, and environmental groups have pushed to close nuclear power plants, and routinely block any new proposed natural gas pipelines, black outs will become frequent.

This dilemma makes “energy efficiency” a key component of the environmental groups’ decrees—which parallels the European Union’s (EU) policies that were a part of Britain’s “exit” decision (known as “Brexit”).

In 2014, the EU, in the name of energy efficiency, sparked public outcry in Britain when it banned powerful vacuum cleaners with motors above 1600 watts. It then proposed to “ban high powered kettles and toasters” as part of the “Eco-design Directive” aimed at reducing the energy consumption of products.

When the EU’s high-powered toaster/tea-kettle ban was announced, it became “a lightning rod for public anger at perceived meddling by Brussels”—which was seen as “intruding too much into citizens’ daily lives.” Retailers reported a spike, as high as 95 percent, in toaster and electric tea-kettle sales. The European overreach became such ammunition in Britain’s Brexit referendum, that Brussels stalled the ban until after the election.

It is reported that top of the list for “leave” voters were “EU Rules and Regulations.” Matthew Elliot, chief executive of the Vote Leave campaign said: “If we vote remain we will be powerless to prevent an avalanche of EU regulations that Brussels is delaying until after the referendum.”

Brussels’ toaster and tea-kettle ban, which were perceived as an assault on the British staples, has been called “bonkers” and “too barmy to be true.” Specifically addressing the ban, Elliot said: “The EU now interferes with so many aspects of our lives, from our breakfast to our borders.” David Coburn, a UK Independence party MEP from Scotland, who recently bought a new toaster and tea kettle grumbled: “I think I must have bought a euro-toaster, I have to put bread in it five times and it’s still pale and pasty. Perhaps it’s powered by windmills. And the kettle? Watching a kettle boil has never been so boring.”

While energy efficiency directives banning Keurig coffee makers would be more likely to draw similar ridicule from Californians, there is a lesson to be learned from the Brexit decision: too much regulation results in referendums to overturn them. It is widely believed that, with Brexit and new leadership, many of the EU’s environmental regulations, including the Paris Climate Agreement, will be adjusted or abandoned.

More and more Americans are reaching the same conclusion as our British cousins about the overreach of rules and regulations. As Coburn concluded: “What we want is to let the free market reign, not this diktat by bureaucrat.”

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