Losing customers

Part of the challenge to the status quo has been posed by so-called community choice aggregations, or CCAs – local power agencies that more municipalities have embraced or considered switching to, away from legacy power utility companies. PG&E and other established players have begun to worry that too many switchers could leave remaining customers saddled with costs they can’t or won’t bear, leading to a potential death spiral for the big utilities.

“The state is ambitiously pursuing a fundamental transformation of the electric system to achieve historic greenhouse-gas reduction goals,” PG&E wrote to the California Public Utilities Commission in conjunction with two other leading companies, asking in effect for new rules that would prevent a rush to the exits, according to the San Jose Mercury News. “At the same time, the move toward customer choice through community choice aggregation, as well as other retail choice options, is accelerating.” 

Heightening the sense of urgency around appeasing customers as the hot summer months approach, PG&E suffered a frustrating mass outage event in San Francisco last Friday. “The power failure affected almost 90,000 Pacific Gas and Electric Co. business and residential customers, leaving Union Square, the Financial District, the outskirts of Chinatown and several other neighborhoods without electricity just after 9 a.m.,” as the San Francisco Chronicle reported. 

Tire pressure

Seeking to amp up energy supplies without running afoul of Sacramento’s tightening environmental restrictions, state officials have meanwhile focused renewed attention around an unprecedented technology that would harness the weight of tires in motion to produce electricity. They agreed, the Chronicle reported separately, “to fund an initiative to generate electrical power from traffic, a plan that involves harnessing road vibrations with the intent of turning the automobile, like the sun and wind, into a viable source of renewable energy.”

“The technology is peculiar but proven. Devices that convert mechanical force into electricity are used in watches and lighters and are being tested for power generation on sidewalks and runways. A San Francisco nightclub has even leveraged the pulses of a dance floor to power its lights and music,” the paper added. “Gravely helped draft the proposal approved [April 12] by the Energy Commission’s governing board, which will direct $2.3 million to two independent road projects designed to test the viability of scaling up piezoelectricity. ‘Piezo’ is Greek for ‘squeeze’ or ‘press’ and refers to using pressure to create power.”

The several-million-dollar budget will be split between “a 200-foot stretch of pavement on the UC-Merced campus” and “a half-mile of highway to potentially harvest enough power for 5,000 homes,” Jalopnik observed, with the latter effort to be spearheaded by the Pyro-E company. To capture the energy, the lengths of road “will be filled with tiny piezo arrays stacked ‘like quarters’ in the road surface,” the site noted. “Some estimates suggest that as little as 400 cars per hour would be needed to make the system economically viable.”

Uncertain reach

Joining a would-be trend that includes lawmakers in deep blue Massachusetts, Senate majority leader Kevin de León, D-Los Angeles, has unveiled a new proposal that could become California Democrats’ answer to the limits of cap-and-trade. 

“The California Senate leader has introduced legislation that would require the Golden State to get 100 percent of its electricity from climate-friendly energy sources by 2045,” the Desert Sun reported. “That’s a big step up from the state’s current renewable energy mandate, 50 percent by 2030 — a target that’s only been on the books for a year and a half, and that California is still a long way from meeting.”

“De León’s bill would require California to hit 50 percent renewable energy by 2025, five years sooner than under current law, and phase out fossil fuels entirely by 2045. It’s not yet clear whether the Senate leader will move forward the proposal, which he introduced before the state’s bill-filing deadline on Friday, almost certainly to serve as a placeholder for more detailed legislation that could be fleshed out later. Still, clean energy advocates celebrated the proposal.”

Big goals

Massachusetts lawmakers recently made a bid to make their state the first in the country to draw all its power from renewables. “Lawmakers recently introduced a bill that would require an economy-wide transition to obtaining power via clean sources like wind and solar, and 53 state legislators from both the House and the Senate have shown support for the measure,” Inhabitat observed. “The bill, SD. 1932, also known as the 100 Percent Renewable Energy Act, would set targets of electricity generation via 100 percent renewables by 2035; other sectors like transportation and heating would have until 2050 to make the switch.” 

A few other states have begun to gravitate toward the principle of mostly or totally renewable power. New York “wants 50 percent renewable energy by 2030,” according to the Los Angeles Times, “which is seeking 100 percent renewable energy by 2045.” De León first floated the idea of going full renewable to the Times in January. “Two years ago, California Senate leader Kevin de León pushed through a law requiring the state to generate half of its electricity from renewable sources by 2030,” the paper recalled.

Notes of caution

But while the enthusiasm has largely been couched in terms of using politics to advance moral imperatives, not all green energy advocates have embraced the idea with open arms. “[T]here’s a lot of evidence that 100 percent renewable energy is not the optimal way to decarbonize the grid,” Greentech Media noted. “Let’s say climate change requires massive government investment in clean technologies. In that case, the question shifts to one of efficacy: Since climate change justifies extraordinary measures, what is the most effective extraordinary measure to fight it? That’s where 100 percent renewables plans fall short, for both structural and practical reasons.”

Some analysts have warned that the approach pushed by de León becomes less and less effective the more ambitious it becomes. “The main economic problem facing renewable electric power is that of diminishing returns,” wrote the Niskansen Center’s Edwin Dolan. “It is possible to install great numbers of solar panels and wind turbines, and even to achieve economies of scale, measured in terms of the cost per kilowatt-hour of capacity, as the installations get larger. However, the problem remains of getting the power to users where and when it is needed. The output of solar and wind installations is variable, and the timing of output does not always coincide with the timing of demand. As the number of renewable installations attached to the grid goes up, the percentage of the potential power output that can actually be used goes down and the cost per kWh rises.”

The result could lead businesses to push technology toward arbitrary goals. “Energy companies have traditionally shied away from installing battery systems at their plants because they’ve tended to be expensive,” Ars Technica noted. “But as prices for energy storage come down and states like California require more and more intermittent renewable energy on utilities’ grids, battery installations have been on an upswing.”

Fueled by a dated system that does not always respond to market incentives or pressure, costs and surpluses of energy have both grown in California, raising pointed questions about what residents should expect from rates and regulations alike.

“California has a big — and growing — glut of power,” as the Los Angeles Times announced in a detailed report. “The state’s power plants are on track to be able to produce at least 21 percent more electricity than it needs by 2020, based on official estimates. And that doesn’t even count the soaring production of electricity by rooftop solar panels that has added to the surplus.”

“To cover the expense of new plants whose power isn’t needed […] Californians are paying a higher premium to switch on lights or turn on electric stoves. In recent years, the gap between what Californians pay versus the rest of the country has nearly doubled to about 50 percent.”

Growing outrage

The disparity has drawn steady fire from free market analysts. “In an open marketplace, gluts of products or services lead firms to slash their prices dramatically. If, say, car manufacturers produce too many vehicles, they will provide rebates or be stuck with lots full of unsold inventory,” Reason recently observed. “With California’s regulated utility system, by contrast, gluts in electricity actually raise prices for consumers because of the way utilities are paid for their investments. They need only get the approval from the Public Utilities Commission to build new plants and pass on costs to ratepayers.”

The gap between power and cost has grown to nationwide highs. November 2016 data from the U.S. Energy Information Administration, “showed California households paying 17.97 cents per kilowatt hour for electricity, or 40.9 percent more than the national average of 12.75 cents,” CNBC reported. “New England states also have high electricity costs. But out West, only Alaska and Hawaii have higher average electricity costs.”

Although controversy has swirled around the prospect of regulators approving new plants amid an energy glut, “experts say growing interest in energy storage — including battery energy storage technology — could have an additional impact on the electricity market in the nation’s most populous state,” CNBC continued. Michael Ferguson, U.S. energy infrastructure group director at S&P Global Ratings, told the network that new battery technology would help by storing surplus energy without having to produce more of it. 

Big plans

In fact, Edison and Tesla recently cut the ribbon on just such a storage system, moving from concept to execution in what utilities officials characterized as unprecedented time. “The facility at the utility’s Mira Loma substation in Ontario contains nearly 400 Tesla PowerPack units on a 1.5-acre site, which can store enough energy to power 2,500 homes for a day or 15,000 homes for four hours,” the Los Angeles Times reported. “The utility will use the collection of lithium-ion batteries, which look like big white refrigerators, to gather electricity at night and other off-peak hours so that the electrons can be injected back into the grid when power use jumps.

“Tesla and Edison sealed the deal on the project in September as part of a state-mandated effort to compensate for the hobbled Aliso Canyon natural gas storage facility. They fired up the batteries in December.”

Unless the utilities rejigger rates and storage, they could find pressure mounting to scale back their plans for a big outlay for electric transportation investment. “Southern California Edison would spend $19.45 million on six ‘priority review’ pilots and $553.8 million on a five-year charging infrastructure buildout,” according to the plan, UtilityDive noted. “San Diego Gas and Electric wants $18.19 million for six priority review pilots and $225.9 million for residential charging. And Pacific Gas and Electric has proposed $20 million for priority reviews and $233.2 million for two five-year charger buildouts. In all, it comes to $1.07 billion for a wide-ranging list of programs from heavy-duty transport electrification to incentives for Uber and Lyft drivers.”

This price system, critics say, results in unforeseen consequences. A recent investigative report found that California’s utility companies have been involved in a power-plant building spree, even though Californians have significantly cut their electricity usage over the same time period. In three years, the state is projected to be producing 21 percent more electricity than it needs, without counting the growth in rooftop-solar applications, reported the Los Angeles Times.

Last year, the California Independent System Operator had 24 percent in actual reserves – far above the targeted 15 percent goal. Even that 15 percent goal is 50 percent higher than what’s necessary to protect the system from disaster and blackouts, according to some experts.

As the Times’ report put it, “California has a big – and growing – glut of power.” It’s a matter of incentives. Because utilities are guaranteed a 10.5 percent rate of return on each new plant they build, regardless of whether customers actually need it, they can make more money building new plants than they could buying power from existing competing plants.

In an open marketplace, gluts of products or services lead firms to slash their prices dramatically. If, say, car manufacturers produce too many vehicles, they will provide rebates or be stuck with lots full of unsold inventory. With California’s regulated utility system, by contrast, gluts in electricity actually raise prices for consumers because of the way utilities are paid for their investments. They need only get the approval from the Public Utilities Commission to build new plants and pass on costs to ratepayers.

The regulated utility model, which dates back to the 19^th century, puts government regulators in charge of looking after consumers’ best interests. But a fairly recent California utility scandal has illustrated the dangers of what Nobel Prize laureate George Stigler refers to as “regulatory capture,” when the oversight agencies are dominated by the industries they regulate.

As the Mercury News reported in 2015 regarding the investigation of a deadly 2010 explosion of a PG&E natural-gas pipeline in San Bruno:

“Additional evidence of the close relationship between PG&E officials and leaders of the agency that regulates the utility emerged late Friday in a new batch of emails long sought by the city of San Bruno … .”

Some say the current system also crushes the emergence of a functioning electricity market. The Times article tells the story of an energy company that built a $300 million privately funded facility in Sutter County:

“Independents like Calpine don’t have a captive audience of residential customers like regulated utilities do. Instead, they sell their electricity under contract or into the electricity market, and make money only if they can find customers for their power.”

But soon after the construction of that plant, the California Public Utilities Commission approved PG&E’s application to build its own power plant. PG&E gets paid no matter the consumer demand, so it was hard for a true private enterprise to compete with that subsidized model. Calpine shuttered its facility halfway into its useful life.

“A monopoly franchise removes the incentive to innovate to increase market share,” explains my R Street Institute colleague Devin Hartman, in an August study of the nation’s electricity markets. “Guaranteed cost recovery for ‘prudently incurred’ expenses diminishes the incentive to control costs. The regulated model also insulates utilities from market risks and most policy risks, such as changes in fuel prices or government subsidies.” This provides a safe place for investors, he added, but gives them little incentive to manage risks or control costs.

These analyses also highlight a point that might seem counterintuitive to many environmentalists: competitive markets often lead to better air-quality outcomes. Here, we see utilities overbuilding natural-gas-fired power plants even as consumer demand suggests the plants aren’t necessary. Because of the utilities’ rate-of-return-based payment, they can stick with older technologies and avoid looking at alternative-energy models that might trim their costs.

The current distorted market is, to some degree, a reaction to the botched energy deregulation plan former Gov. Pete Wilson signed into law in 1996, which provoked a statewide crisis in 2000. The state deregulated the price of wholesale energy, but capped its retail price. The population had been growing and regulators had not approved the construction of new power plants for years. After a hot summer and market manipulations by energy companies gaming the new system, the state’s wholesale prices soared above those retail caps.

The end result: Rolling electricity blackouts, a statewide crisis that led to the bankruptcy of PG&E, and the recall of Gov. Gray Davis. Though Wilson signed the legislation, Davis was blamed for indecision as parts of the state went dark. Since then, state officials have avoided anything smacking of deregulation or market competition and have been cranking up supply even if it’s not necessary. Other states, such as Texas, deregulated their electricity markets and have watched electricity prices go down as California’s have increased.

The Times only touches on another issue of long-term importance: solar energy and the utility companies’ fear of a “death spiral.” California law allows for net energy metering. “Customers who install small solar, wind, biogas and fuel cell generation facilities … to serve all or a portion of onsite electricity needs are eligible for the state’s net metering program,” explains the Public Utilities Commission. “NEM allows a customer-generator to receive a financial credit for power generated by their onsite system and fed back to the utility.”

Utilities must buy back the electricity at market rates, but they still have this vast – and growing – infrastructure of power plants and utility lines to finance and maintain. The more the utilities raise their rates to pay for these “stranded costs,” the more consumers opt out and install solar panels. That raises the per-capita costs of maintaining that infrastructure, which raises electricity prices – and leads to more people opting out of the system. Advances in battery storage could further diminish the need for power plants that are financed 30 or 40 years into the future.

Steven Greenhut is Western region director for the R Street Institute. Write to him at sgreenhut@rstreet.org.     

The deal was announced earlier in the day and was approved by dinner after a longstanding battle between legislative leadership, who had a long list of ways to spend the money, and Brown, who had yet to give his blessing.

“California’s combating climate change on all fronts and this plan gets us the most bang for the buck,” Brown said in a statement when the deal was announced. “It directs hundreds of millions where it’s needed most – to help disadvantaged communities, curb dangerous super pollutants and cut petroleum use – while saving some for the future.” 

Forty percent of cap-and-trade revenue will go to a general fund for programs to reduce greenhouse gas emissions. The rest is doled out with 25 percent going to high-speed rail, 20 percent for affordable housing and sustainable communities grants, 10 percent for intercity rail capital projects and 5 percent for low-carbon transit projects.

Low revenue and legality

The spending plan comes at an interesting time for the cap-and-trade program, which allows businesses to purchase at auction GHG emission credits to exceed state-imposed limits. The money is to be spent on programs that reduce GHG emissions.

The last two quarterly auctions have fallen flat, greatly missing revenue targets, and the program itself faces legal challenges as opponents argue it’s an illegal tax.

Earlier this week, the Legislature approved a measure to add an oversight committee of the California Air Resources Board. CARB created the cap-and-trade program.  

The deets

Specifically, the plan passed Wednesday allocates the funding as follows:

• $368 million to the Air Resources Board, including:
  • $133 million to the Clean Vehicle Rebate Program.
• $80 million to the Enhanced Fleet Modernization Program, Plus-Up Pilot Project and up to $20 million of this amount may be used for other light-duty equity pilot projects.
• $150 million for heavy-duty vehicles and off-road equipment investments.
• $5 million for black carbon wood smoke programs.
• $140 million to the Office of Planning and Research for the Strategic Growth Council to provide transformative climate communities grants.
• $135 million to the Transportation Agency for the Transit and Intercity Rail Program.
• $80 million to the Natural Resources Agency for the Urban Greening program.
• $65 million to the Department of Food and Agriculture, including:
  • $50 million for the early and extra methane emissions reductions from dairy and livestock operations.
• $7.5 million for the Healthy Soils Program.
• $7.5 for the State Water Efficiency and Enhancement Program (SWEEP).
• $40 million to the Department of Forestry and Fire Protection, including:
  • $25 million for the Healthy Forest Program.
• $15 million for urban forestry programs.
• $40 million to the Department of Resources Recycling and Recovery for waste diversion and greenhouse gas reduction financial assistance.
• $20 million to the Department of Community Services and Development for weatherization and renewable energy projects.
• $10 million to the Department of Transportation for the Active Transportation Program.
• $2 million to the Office of Planning and Research for the Strategic Growth Council to provide technical assistance to disadvantaged communities.

Speaker Anthony Rendon, D-Paramount, said talks have died for the year, largely because of Gov. Jerry Brown’s insistence to include provisions that would speed up development by relaxing requirements in the approval process — an idea that angered many local government officials.

Rendon told The Sacramento Bee on Thursday that there wasn’t any support for the Democratic governor’s proposal in the Assembly Democratic Caucus. The death of the talks was later confirmed by the Los Angeles Times.

“Linking it … has sort of backed us into a corner,” Rendon told The Bee. “It doesn’t look like the negotiations are going any further at this point.”

Brown included $400 million worth of low-income housing subsidies in his budget proposal this summer, but since then talks have made little progress. Earlier this month, environmental and labor groups backed out of the negotiations. 

It’s unclear how Brown will proceed — a spokesman did not immediately respond to requests for comment. 

The deal’s apparent demise comes as legislative leaders are negotiating with Brown over the release of $1.2 billion in unallocated funds from the state’s controversial cap-and-trade program, where businesses can buy credits at auction to exceed emissions caps. 

On Wednesday, Senate President Pro Tem Kevin de Leon introduced a gut-and-amend bill that would spend the $1.2 billion on projects throughout the state, including a Clean Vehicle Rebate Project, mass transit projects and even a healthy tree program that includes pest and diseased tree removal. 

According to a Public Policy Institute of California poll released Wednesday, a majority of Californians support government efforts to improve the environment, despite possible rises in energy costs and ongoing debates about the legality and effectiveness of the state’s environmental policies.

The study, which surveyed around 1,700 California residents about various environmental concerns, found that the majority of Californians supported existing plans to combat global warming, and were willing to expand these laws, even if that means paying more for gasoline and electricity.

“We find strong support today for the state’s greenhouse gas emissions targets set 10 years ago,” PPIC president Mark Baldassare said. “The commitment to help reduce global warming includes a surprising willingness on the part of majorities of Californians to pay higher prices.”

Big dreams for a cleaner California

Sixty-nine percent of Californians approved of plans to reduce greenhouse gas emissions to 1990 levels, as laid out in AB32, one of the state’s landmark environmental laws.

But government plans to reduce emissions have been met with mixed results. The cap-and-trade program, created by the Air Resources Board in response to AB32, places carbon emission limits on businesses and allows them to purchase credits for exceeding those limits. But at May’s quarterly auction, businesses purchased only 2 percent of the anticipated revenues.

The program faces legal challenges as well. A lawsuit by the California Chamber of Commerce claims the program is actually an illegal tax on businesses, requiring a two-thirds vote to become law.

Critics have complained about how the cap-and-trade revenue is spent – that the money doesn’t often fund projects that meet the required emission reduction goals. Assemblyman Adam Gray, D-Merced, said he is concerned about how the revenues are spent, calling the program “a feeding frenzy for a multitude of pet projects,” according to The Sacramento Bee.

And though there has been a decrease in greenhouse gas emissions, some say the lower levels may reflect outside factors like business scale-backs during the Great Recession.

“The jury’s really out on whether we’ve seen a lot of reductions caused by cap-and-trade,” James Bushnell, an energy economist at UC Davis, told the Los Angeles Times. 

Despite varied expert opinions, 54 percent of respondents in the PPIC survey approve of the cap-and-trade program – after the surveyors gave a brief explanation to the 55 percent who had never heard of the program before.

Respondents also support a proposed new law that would ramp up AB32’s plans to control emissions, which would exceed AB32’s reduction goals and extend the program to the year 2030.

And 58 percent of those surveyed believe local and state governments should devote more resources to other environmental issues, as well – electric cars, solar power and drought management.

A big paycheck for California residents

Californians know that reducing greenhouse gas emissions could raise energy costs – and they are ready to foot the bill.

The majority of respondents said they would be willing to pay more for gas (63 percent) and solar- or wind-generated electricity (56 percent). The Legislative Analyst’s Office estimates that gas prices would rise 11 cents as a result of the cap-and-trade program.

But this widespread support of energy reforms comes alongside equally widespread opposition by those who prioritize economic concerns over the environment.

How it’s playing in 2016

Alternative energy plans come with a cost – and according to Assemblywoman Cheryl Brown, the Inland Empire may not be able to afford it. In 2015, the San Bernardino Democrat opposed a petroleum-reduction provision of Senate Bill 350, another key piece of California’s environmental policy, citing concerns that potential rising energy costs could harm lower-income families.

However, some voters said Brown’s opposition amounted to a rejection of the entire clean energy campaign and retribution was swift. Protests, rallies and criticisms from other officials have threatened Brown’s re-election, while the campaign has become a proxy war between Big Oil and Big Environment. 

“Do you ever feel that something is not going quite right?” Brown asked the Los Angeles Times in March. “They are after me, and I still don’t know why. I don’t know who ‘they’ are. But I will find out soon.”

Concerns about the impracticality of California energy reforms are reflected in the PPIC survey, as well. The majority of respondents supported clean energy programs like electric cars and charging carports, with 68 percent in favor of tax credits for purchasing electric cars, and 77 percent supportive of infrastructure for charging the vehicles.

But less than half (47 percent) are actually considering purchasing an electric car themselves, suggesting that good intentions may not match up with environmentally conscious decisions.

California regulators have made preparations to close Diablo Canyon, the state’s last remaining nuclear power plant, in a move quickly characterized as a turning point in the nation’s approach to energy production and use.

“Pacific Gas and Electric Co. announced Tuesday it will close California’s last nuclear plant, Diablo Canyon, in 2025, ending atomic energy’s more than a half-century history in the state,” noted the San Francisco Chronicle. “The move will shutter a plant whose construction on a seaside cliff surrounded by earthquake faults helped create the antinuclear movement. And yet, some conservationists have fought to keep Diablo Canyon open, arguing California needed its output of greenhouse gas-free electricity to not exacerbate global warming.”

In fact, nuclear power has staked a claim to greater efficiencies than other forms of energy such as wind, driving critics of prevailing environmentalist policies to cast Diablo Canyon as a relatively smarter way to meet anti-carbon objectives hard to dislodge from Sacramento. “Nuclear energy is a huge source of clean power that doesn’t release the greenhouse gases that are changing the climate,” according to the U-T San Diego editorial board. “And unlike the San Onofre plant in San Diego County that closed in 2012 because of severe problems with steam generators and more, the Diablo Canyon plant appeared to be functioning well.”

Key players in the state’s environmentalist movement, however, determined that nuclear power represented more of an obstacle to their agenda than a source of potential allies. The proposal to shut down Diablo Canyon, “part of an agreement with environmental and labor groups, is intended to help meet California’s aggressive clean energy goals, which have already transformed the power mix with a large and growing renewable energy fleet at a time of slowing electric demand,” the New York Times reported. “It also comes after years of public pressure to close the plant, near San Luis Obispo, because of safety concerns over its location, near several fault lines, and its use of ocean water for cooling.”

Final approval for the change must come through the California Public Utilities Commission. “The agreement calls for PG&E to withdraw its pending application to extend the licenses for another 20 years, and to replace the plant’s 2,240-megawatt capacity with a combination of efficiency improvements and renewable sources,” as the Los Angeles Times’ Michael Hitzlik noted. “Among the deal’s unique features are provisions for $350 million in retention, severance and retraining payments to existing workers and $49.5 million in payments to San Luis Obispo County as compensation for the loss of a major source of employment and taxes.”

As legacy players in the public and private sector have haggled over the costs and benefits of nuclear power production, innovators have pushed the conversation in a different direction. Although advances in the efficiency of solar power production and retention have become something of a political football in recent years, with Democrats at the state and federal level bent on subsidizing businesses geared toward solar and other nontraditional power sources, alternate-energy entrepreneur Elon Musk has forged ahead with what appear to be plans for a dramatic new play in the space. 

With his Tesla company’s bid to acquire SolarCity, as Fortune suggested, “a fully vertically integrated energy company—from energy generation to installation to storage to application—could create a massive Elon Musk Energy Empire. It would be a company that generates power from the sun, stores energy in batteries, and uses those batteries to power cars and buildings.”

“And it would all be provided by a brand that consumers increasingly know and are excited about. Tesla’s brand is starting to be so powerful that it’s as if Apple decided it wanted to be a full-fledged power company (oh wait, it’s kind of doing that). But never before has the energy industry had such a player that so was so attractive to consumers and also so willing to act disruptively.”

Activists are furious with the PUC’s 2014 decision to make ratepayers of Southern California Edison and San Diego Gas & Electric cover 70 percent of the $4.7 billion cost of shuttering the facility, which had severe problems with steam generators that forced its closure. After the decision, it was discovered that the parameters of the deal had been worked out clandestinely in 2013 in a meeting in a Warsaw, Poland, hotel room between an Edison executive and then-PUC President Michael Peevey.

Both the state and federal governments have launched criminal investigations of Peevey over his failure to disclose contacts with utility executives and his alleged attempts to pressure utilities for favors in return for his support on some regulatory decisions.

But while the criminal division of the state Attorney General’s Office is pursuing the criminal probe, the civil division of the office is supporting Gov. Jerry Brown in his fight against disclosing emails between his office, the PUC and utilities during the period decisions were being made about how to pay for the costs of closing San Onofre.

Recent coverage of the case in the San Diego media has featured sharp criticism of Harris’ dual role in dealing with the scandal.

“In this case, for the [attorney general] to investigate the communications with the [California Public Utilities Commission] while representing a potential witness who is a potential subject of the investigation is a conflict,” former San Diego County District Attorney Paul Pfingst told KPBS.

“One of the problems with the conflict is it invites the attorney general to narrow the investigation to avoid the conflict,” former San Diego City Attorney Mark Aguirre told the San Diego public broadcasting affiliate.

“If the investigation into the Public Utilities Commission involves the nuclear power plant, and that is something that’s the subject of the governor’s emails they are trying to keep secret, then I think there is a conflict,” Georgetown University law professor Paul F. Rothstein told the Union-Tribune. “The Attorney General’s Office should probably turn over one or the other of these cases to an independent counsel.”

“Government works best when it shines light on problems, not seeks to keep the public in the dark,” University of San Diego law professor Shaun Martin told the newspaper, criticizing Harris for helping efforts to keep public records from being released to the media.

‘Ethical firewall’ said to separate AG branches

Harris’ aides deny there is any conflict and depict their actions in working with the governor on email requests as routine:

A Harris spokesman said there’s an ethical firewall between the attorney general’s civil division representing the governor’s office and its criminal section responsible for the investigation into the California Public Utilities Commission and the state’s energy companies.

That’s from KPBS’ coverage.

We just got back from Klamath, where Gov. Jerry Brown signed an agreement to remove four dams along the Klamath River.

Brown said the removal was about “correcting mistakes,” a nod to the indigenous people who inhabit the area and have for years suffered from the ill effects the dams cause on the river and its fish. How much does a correction cost? California could contribute anything from zero dollars to as much as $250 million.

And while Wednesday’s event was a joyous occasion for all who attended, some locals are not pleased with the deal.

CalWatchdog has more.

In other news:

• A Democratic assemblywoman has introduced a bill that would establish “supervised consumption sites,” where drug users could go get high under the care and supervision of local health officials, according to the Orange County Register. There will likely be some opposition to this bill.

• Speaking of drugs, the Public Policy Institute of California is urging state lawmakers to develop a single, highly regulated marijuana market for both medicinal and recreational pot (assuming recreational use becomes legal). Capitol Weekly has more.
• A new poll shows business tycoon Donald Trump (still) leading the Republican presidential field in California, reports The Sacramento Bee.

• The Clovis Unified School District voted to drop its gender-specific dress code after months of debate and pressure from groups like the ACLU, which means boys are now allowed to have long hair and wear earrings, reports The Fresno Bee.

CLARIFICATION: In yesterday’s Morning Read, we said Democrat Joaquin Arambula likely avoided a November run-off for a Fresno Assembly seat after his victory in Tuesday’s special election. While it’s true he avoided a run-off, Arambula will still have to compete in the June primary and possibly in the November general, as he’s filling out the term of the assemblyman he replaced.

Assembly:

Session begins at 9 a.m. A committee will discuss improving female participation in STEM.

Senate:

Session begins at 9 a.m. There’s a full slate of hearings.

Gov. Brown: 

Will speak at the 26th Annual Crime Victims’ Rights event in Sacramento.

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