Watch LIVE

California's electricity crisis is so bad Gov. Newsom is ignoring carbon emissions policies to pay people to use generators instead

News
David Paul Morris/Bloomberg via Getty Images

The electricity crisis in California is so bad that the state will pay some power customers to use backup power generators and ignore their carbon emissions targets.

A drought and the less-than-smooth transition from fossil fuels to green energy is putting severe stress on the power grid among record high temperatures. California Gov. Gavin Newsom, who is also under pressure from a recall election, signed an emergency declaration Saturday in order to address the power shortages and try to avoid rolling blackouts.

The emergency measures include a provision that will pay some companies to use generators instead of relying on the power grid. From Newsom's declaration:

The proclamation suspends certain permitting requirements to allow greater energy production and creates incentives so that large energy users can move to back-up power generation, freeing up energy capacity on the grid for everyone else, during critical times when extreme heat events or the interruption of transmission lines from wildfires or other causes threaten energy supply this summer.

According to an analysis by Bloomberg Opinion energy columnist Liam Denning, one kilowatt hour of electricity produced by a backup generator uses about 13,000 BTU while the same measure produced by a modern gas-fired power plant would only use about 7,000 BTU.

The emergency measure will run through October and pay the "large energy users" $2 for each kilowatt they avoid using by running their own backup generators. Denning points out that this is 14 times the average price that industrial customers in California usually pay for each kilowatt, which is about 14.4 cents.

"Bad planning combined with extreme weather has left California in a hole," Denning concluded. "Set against the disruption caused by blackouts, paying the equivalent of $2,000 per megawatt-hour to avoid them may seem relatively cheap. Still, it is remarkable that Newsom is now offering state money to get businesses off the grid when needed."

Newsom's political fate will be decided by the voters of California in the recall election on Sept. 14.

Here's more about California's power plight:

California Gov. Gavin Newsom declares state of emergency to avert blackouts www.youtube.com

Most recent
All Articles