The Public Advocates Office (PAO) is supposed to be the California Public Utilities Commission’s (CPUC) internal ratepayer advocate. In reality, they are yet another government agency that is captured by the big utilities.
The State Auditor recently slammed them for failing at their core job of checking out-of-control utility spending. Now, instead of doing their job and holding utilities accountable, PAO is actively spreading utility-cooked lies about rooftop solar.
The Public Advocate is not a real independent agency. They are a political arm of the CPUC and the Governor.
PAO misrepresents itself as an independent consumer group. They are not. Their director is a political appointee of the Governor. They are funded with public dollars (ratepayer dollars to be exact). Their office is inside the CPUC building. They have no members, no citizen Board of Directors, and no public accountability from donors.
This means PAO answers to the Governor and the CPUC alone, not the public.
The Public Advocate has one job, and they are failing.
California’s unaffordable electricity bills didn’t just happen for no reason. They are a result of decades of out-of-control spending by the utilities combined with lax oversight.
- 92% of rate hikes since 2014 are a direct result of utility spending increases on poles and wires.
- Spending on poles and wires has skyrocketed, increasing by more than 300% since 2002 even though peak electricity demand has been flat.
- Utilities are incentivized to overspend for one big reason: the government guarantees them an 8-10% profit on every dollar they spend on new power lines.
- The utilities are in turn reporting record profits, and rates keep rising to match.
Much of the data cited here was prepared by energy economist Richard McCann at M.Cubed Consulting.
Where were the PAO and the CPUC while the utilities were spending like drunken sailors? Asleep at the switch.
Utility overspending has been going on for years, without any meaningful oversight:
- 60% of transmission infrastructure spending is self-approved, which means the regulators don’t even scrutinize it.
- And the state’s Auditor has faulted the CPUC and PAO for failing to scrutinize and hold the utilities accountable for overspending on distribution infrastructure.
- For years, utilities and state regulators knew that rooftop solar was reducing electricity demand and the need to spend on poles and wires. They ignored this trend and overspent anyway. (Chart prepared by Richard McCann, M Cubed Consulting).
Now, instead of owning up to their failure to protect the public, PAO joined the utilities in blaming rooftop solar for rising rates.
The utilities don’t want you to focus on their out-of-control spending. So instead they created the lie that rooftop solar users are responsible for rising rates. That is utter nonsense.
But PAO and the CPUC have a strong self-interest in perpetuating the utilities’ lie because they are just as much to blame as the utilities for unaffordable electricity bills. Scapegoating rooftop solar helps deflect attention away from their failures.
When PAO’s sloppy math is corrected, it actually shows that rooftop solar saves ratepayers $1.49 billion in 2024.
The PAO recently released a fact sheet making the incredible claim that rooftop solar users are making other ratepayers pay $8.5 billion more in 2024.
But energy economist Dr. Richard McCann unpacked the PAO’s math, and found it riddled with errors and omissions. When those issues are corrected, the so-called “cost shift” becomes an $1.49 billion savings to all Californians in 2024.
Here are the errors and fraudulent assumptions the PAO made
- Phantom costs that don’t actually exist: The PAO assumes that every ratepayer is obligated to pay the utility whether or not they need the electricity. Their math counted the solar energy consumed “behind the meter” as a cost to other ratepayers. This is like saying that people who grow their own vegetables are responsible for raising prices at the grocery story. Dr. McCann removed this “phantom cost shift” from the math and reduced the PAO’s claim by $3.989 billion alone.
- Incorrect background numbers: The PAO used the wrong rates that solar users actually pay and also miscalculated the actual amount of solar generated by our panels. Dr. McCann corrected these numbers and further reduced the PAO’s claim by $2.457 billion.
- Incorrectly assuming solar users have zero electricity bills: Of course, most of us still pay electricity bills that already cover the utilities’ fixed costs. Dr. McCann corrected this and further reduced the PAO’s claim by $1.420 billion.
- Omitting how solar users on CARE save ratepayers money: 15% of all solar users are on CARE, a subsidized energy program for low income residents. When CARE customers make their own solar energy, this reduces how much other ratepayers subsidize them. Including this further reduces the PAO claim by $719 million.
- Ignoring how rooftop solar reduced the utilities’ costs: The PAO didn’t account for the fact that rooftop solar displaced 15,000 megawatts of peak load and 23,000 gigawatt-hours of energy since 2006. In plainer language, this is the amount of electricity that the utilities didn’t have to make and deliver thanks to your solar. Including this further reduces the PAO claim by $2.165 billion, for a total net savings of $1.49 billion!
The PAO seems to believe that we are obligated to pay the utility whether we use their service or not.
Only an agency that is completely captured by the utilities would say this. The utility does not have an inherent right to take your money. They are simply providing a service that you are free to use, or not.
The PAO is scapegoating working and middle class people who are simply protecting their families from utility greed.
More than half of all solar users are middle and working class, and 53% of all solar users are people of color. PAO didn’t do enough to protect them from utility rate increases, so solar users took matters into their own hands. It is unconscionable that PAO is now turning these everyday people into the bad guys.
California’s 2 million rooftop solar users are heroes. They are reducing strain on the grid, protecting the environment, and helping to save all ratepayers money. They should be thanked, not vilified!
Instead of shilling for the utilities, PAO ought to hold the utilities accountable for their out-of-control spending. Otherwise, they are more accurately named The Utility Advocates Office.
The PAO already failed the public once by dropping the ball on rate increases and utility spending accountability. Now they are failing the public again by attacking everyday people for making energy from the sun on their own property.
They should start serving the public. Until they do, they should be disregarded as simply another tool of the monopoly utilities.
