Electric Shock: Why Is This California Building’s PG&E Bill Suddenly $500,000 A Year?
California's monopoly utilities have no competition... but there's a fix.
All over California, people are getting a shock when they open their utility bills.
For example: just one Berkeley city building will rack up a $500k grid energy bill this year, thanks to steep rate increases, up from $325k last year and $203k in 2021. And the same price shock is hitting buildings all over California, to the tune of tens of billions of dollars.
Fortunately there's a way out: rooftop solar and storage systems that can slash billions in grid energy costs, coupled with smarter, more efficient use of that energy.
The question is, will decision makers in Berkeley - and across California - read their bills, do the math, and take action?
It's Gonna Be An Expensive Summer.
PG&E, one of the largest investor-owned utilities in the U.S., hiked their rates almost 30% this year and has effectively doubled their rates in the Bay Area since 2019. State regulators keep letting California's monopoly utilities pass along seemingly whatever costs they want: for wildfire-protection work they should already have done, for lobbyists to fight against rooftop solar, and most of all, for protecting their profit margins (PG&E had record profits of $2.2 Billion in 2023).
For the main branch of the Berkeley Public Library, these rate hikes have driven steep cost increases. The first three months of this year's bills are running 170% of the comparable 2023 bills (see five years of bills for this building here, and my full analysis here). Which means this year's total will likely top $500k.
A bigger jump will come this summer, when the bills spike due to air conditioning usage. Originally built in 1931 and expanded in 2002, the library uses about 100,000 kilowatt-hours of power a month in summer and 60,000 or so in the winter (to run lights, computers, elevators, and a room-sized automatic book sorting machine).
Here's the 'delivery charges' page of last August's bill:
This is the fee for using PG&E's wires and infrastructure, including large 'demand charges,' triggered by usage peaks, such as AC use in summer. During summer months, this building's electricity usage increases 40-50% over winter... but the monthly bills triple!
It’s unclear whether this building is on the best PG&E rate schedule; the current B19S plan is supposedly for buildings with a battery installed (which would enable demand smoothing), but the library doesn't have one. Of course, PG&E doesn't care - they’re a monopoly!
Now here's the 'electric generation charges' page of the August bill:
These are charges from AVA (formerly called East Bay Community Energy), a non-profit established in 2016 to compete with PG&E by procuring clean wholesale energy. However, they might as well be PG&E charges: AVA keeps raising its rates in lockstep with PG&E, so it doesn't really compete on cost.
Taken together, the library's electric bill totaled $40,959 last August. The building used 90,724 kilowatt hours (kWh) that month, which comes out to 45 cents per kWh, among the highest rates in the country. And that was before this year’s price increase!
By contrast, the cost of installing commercial rooftop solar generation (for example on buildings like libraries) is currently running between three and fifteen cents per kilowatt hour, after incentives from the Inflation Reduction Act.
Why buy 45 cent electricity when you can make it yourself for 10 cents?
What Can A City Do?
To cut the library's massive energy bill, Berkeley must first pause a project underway to replace the main library's rooftop AC system, and redesign it to accommodate a big rooftop solar array.
The building's roof is 30,000 square feet - enough to accommodate a 200 kilowatt array or more. But the current AC replacement project doesn’t even mention rooftop solar. And the new AC units aren't specced to be heat pumps, which could provide heat as well as cooling, allowing Berkeley to scrap the building's gas-fired heating system, save $30k/year in gas cost, fully electrify the building, and free up even more roof space for solar.
I’m no solar design expert, but within minutes, using NREL's REopt tool, I was able to model a few different solar plus storage configurations for the building, including a 250kW array with an 172kW/885kWh battery that would cut the annual PG&E bill in half, at an up-front cost of $1M, with a 4-5 year payback period. And that didn't include the new financial incentives (e.g. direct pay tax credits) available to municipalities from the IRA for renewable energy projects.
A No-Brainer
This is what most businesses would call a no-brainer. So why isn't the city doing it?
Berkeley could certainly use the money: the library system’s already facing a budget crunch, for which officials are proposing a new parcel tax that would raise $5.6 Million more per year for the libraries, on top of their existing $25 million annual budget. And the city as a whole is also budget squeezed, despite having a $940 million annual budget ($725 for the city plus $215 for the schools).
But there's three problems:
First, Berkeley's decision makers don't see rooftop solar as a political win. They believe we've already checked the climate box because our grid energy is '100% renewable.' It isn't: AVA doesn't yet do 7/24 hourly matching, and methane gas is still the backbone of California's grid, so many of Berkeley's electrons actually come from fossil plants in Hayward and Martinez.
Second, Berkeley's decision makers don't realize that local clean generation is a key to accelerating decarbonization. The grid monopolies can't build additional capacity fast enough to meet new electrification demand (e.g. EVs); their existing wires are fragile and insufficient.
And third, Berkeley's decision makers don’t realize how fast rooftop solar and battery costs have dropped: today's numbers are totally different from even two years ago.
AVA, for its part, claims to be trying to help cities install rooftop solar. But they're not really trying that hard: their core mission after all is to help cities buy grid energy, not to unshackle them from an ever-more-expensive grid.
So Berkeley's been dragging its feet on rooftop solar and storage, doing only a few small token projects but not the buildings with the biggest electricity usage and bills. The city's total energy spending isn't broken out in its budget presentations (it should be). But I'm told the city's PG&E bill last year was well over $4 million (imagine how much it will jump this year), not counting the 20+ school buildings (I requested the schools' PG&E bills but never got them), the millions spent on fuel for city vehicles, and the many soft costs of grid and fossil energy (maintaining backup diesel generators and fossil fueled vehicles, downtime from grid outages, etc).
It's fun to imagine what could happen if Berkeley and other California cities thought bigger (and faster) about local electrification and distributed (rooftop) generation, and the upside of breaking the monopoly utility stranglehold.
A fully-electrified, rooftop and microgrid-powered, more energy efficient, zero emission and locally resilient Berkeley with ultra cheap electricity would be a really cool thing - and the planet needs it!
But lets at least start with the main library, and save that $500,000 a year.
Epilogue: Oh Honey, If You'd Just Called Me...
To obtain these and other city PG&E bills, I spent over a year filing public records requests and waiting for the city to comply. What a waste of city staff time: the city attorney apparently insisted that account numbers on each page be manually redacted, on hundreds of bills.
Only in the past week did I finally find the utility bill guru on the city staff, my PG&E bill soulmate. I cold-called her and told her what I was doing. And coincidentally, at that exact moment, she was looking at the main library's skyrocketing bills on her screen.
"Oh honey, If you'd just called me," she said when she heard about my bill quest.
I was great to talk to someone who saw the problem, and the need to address it. She’s been doing really great building efficiency projects to try to cut the city’s utility bills, including a cool LED lighting retrofit project now planned for the library which should save 150,000 kilowatts a year - awesome!
But I also sensed some battle weariness from fighting PG&E, slogging through thousands of bills to find streetlights that don't exist that they keep billing us for (yes, many individual streetlights get their own bills). Not to mention fighting for microgrid proposals that get quashed by PG&E's lawyers and lobbyists, or trying to educate city engineers and convince them to try new climate-friendly technologies rather than the grid dependent, high-emissions ones they've always used.
"Everything around here moves glacially slow," she said.
Well, maybe if the city's leaders see a $500,000 bill for just one building, things will move faster.
How about it, Berkeley?
Dave, this is a well researched and well written post. I'm amazed that a city as progressive as Berkeley wouldn't put greater scrutiny on efforts to reduce electricity costs by investing in solar rooftop. And this is a pubic building.
Where “heart” means yikes 😳