The Folks Behind the PGC- Coalitions, Mixed Markets and People Power

Retrieved from Water.ca.gov

 

The Folks Behind the PGC- Coalitions, Mixed Markets and People Power

by Miles Ten Brinke

Miles, Peak Water columnist and avowed Hydrophilic energy-head, has found his way to Britain where he’s lost his California perma-tan and is studying an Energy Policy MSc at the University of Exeter on a Fulbright.

California is a like a nation-state unto itself with particular brand of policymaking and political culture. In every major arena there is a multitude of different actors and institution contending for the greatest influence over the shape and direction of policy. Coalitions are formed and broken in a landscape sometimes defined by cooperation, sometimes competition or contention. Its a place rife with endless acronyms, inspiring the most inebriating of drinking games. Let’s delve in shall we.

There are three main groups of actors involved in historical and ongoing development of the PGC: regulatory and policy agencies, the utilities (public and private) and the governors of the state (not just the legislature and executive but the voters themselves).  That is, so far as I’ve found now.

Both the electricity and water retail markets in California have a mixed structure, between Public Owned Utilities (POUs) and Investor Owned Utilities (IOUs). Although an early pioneer in privatisation of electricity in the 90s the state has moved to a more mixed ownership and management paradigm. In fact the water and electricity markets are inverse of one another, with electricity 80%-private 20% public and water 20% private- 80% public.

Though there are many, six key agencies dominate the water-energy nexus: the Air Resources Board (ARB), Public Utilities Commission (CPUC), Energy Commission (CEC), Natural Resource Agency (CNRA), Department of Water Resources (DWR)  and Water-Energy Team of the Climate Action Team (WetCat).

The first two are most important; the ARB through its regulation of air emissions in California spearheads climate change mitigation and the CPUC regulates all water and energy utilities. The next most important agencies deal directly with energy and water respectively- the CEC and DWR. All energy-water-climate change nexus policymaking, whether interconnected or in silo, flows from and through these groups. The last one is a coalition of folks from local, state and federal agencies charged  by the ARB through its 2008 Scoping Plan to develop and implement the most effective climate change policy at their disposal. WetCat itself is the cornerstone of efforts to develop truly strategic nexus policy, ensuring the smooth exchange of information and inter-agency cooperation.

The proportion that stood out most to me when I was doing my research is that 80% of water in California is public owned. Its surprisingly high in an era of ever increasing public goods privatisation. Most of the water is managed municipally, a subject I’m sure my Peak Water colleagues can speak to in great detail. My personal experience is limited to having paid the water bill to the East Bay Municipal Utility District (EBMUD) at my flat in Berkeley. Ideally this means that the resource is managed there in the interest of the public rather than shareholder returns while maintaining the efficiencies of a mixed market (assuming of course that state run enterprises are less efficient, which is open to contention). The key to the PGC is that it could operate as a price signal for water conservation in this semi-privatised market and provide a steady source of funding for sustainable water management.

The electricity market is dominated by three large companies which on their own account for nearly all that 80% private market share- San Diego Gas & Electric (SDG&E), Pacific Gas & Electric (PG&E) and Southern California Edison (SCE).  On a side note, the Big 3 have made interesting progress on renewables procurement  in 2012 with 20.3%, 19.3% and 20.6% of total electricity generation respectively. Though still nowhere near where it should be to avoid the worst effect of climate change, compare that to only 11.7% in the UK at the end of 2012. Food for thought, though of course comparing apples and oranges (but still, SCE is nearly double the UK!). Though this market is heavily dominated by these three firms, there are many other smaller companies and a fair share of POUs still operating. As with water, most of them are municipal.

Finally, you have the decision makers. The role of the legislature is obvious, the impact of the executive much less so. Both the current state governor, Jerry Brown, and his predecessor (Arnold Schwarzenegger) have been champions of climate change mitigation. When in 2011 the state legislature failed to renew the electricity PGC as it passed its sunset mark Governor Brown sent an official letter to the CPUC asking that it use its mandate to ensure that the vital programs funded by the PGC continue into 2012, to find new funding for the year (which the CPUC did). As is common with American politicians he framed the issue around job creation and clean energy.

The most intriguing category of actors in the state to me however has to be the electorate. Its a very imperfect system, heavily influenced by big money and special interests but the California referendum system has been and will continue to be full of promise and potential. In California if you get enough signatures and the right funding your initiative can get onto the ballot in any local or statewide election. Ideally the sheer weight of multitudinous ballot propositions will create a more informed and engaged electorate. The jury’s still out.

Democracy is messy and chaotic, no more so than when the people themselves have a direct say on how they are to be governed. When done right though, there is nothing more democratically legitimate than a policy the people themselves have voted into effect. Or in the case of 2010′s Proposition 23, when the people overwhelming vote a proposition down. Its a particularly proud moment in my career, being a part of the massive grassroots campaign to refuse a ballot initiative which would have smothered California’s climate policy in its cradle. People power is a beautiful thing.

Today you can watch another movement unfold, as around the United States students are rising up to demand that their universities divest from fossil fuels. In fact this spread across the country beyond universities to cities and a national campaign modelled on Apartheid divestment in the 80s. Its with particular pride I can point to the efforts at my alma matter, where the Cal student senate has voted to divest its $3 million investment portfolio with pressures mounting to convince the UC Regents to divest the whole UC system. Nexus policymaking will have to contend with this people power as it evolves, hopefully channelling the most constructive elements into truly sustainable resource management.

Perhaps in the near future these coalitions, mixed markets and active state residents will come together to forge a new suite of Energy-Water PGCs.

~ Miles on Water

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