California’s Governor Warns Climate Change Pressuring Utilities

California Gov. Gavin Newsom delivered his first State of the State address Feb. 12 before a joint session of the California Legislature. It was wide-ranging, with Newsom talking early in the speech about “the tough calls we must make together on rail, water, and energy.” According to the prepared text on the governor’s website, he promised to cut back on the state’s high-speed rail project.

“I have nothing but respect for Governor Brown’s and Governor Schwarzenegger’s ambitious vision. I share it. And there’s no doubt that our state’s economy and quality of life depend on improving transportation,” he said. “But let’s be real. The project, as currently planned, would cost too much and take too long. There’s been too little oversight and not enough transparency. Right now, there simply isn’t a path to get from Sacramento to San Diego, let alone from San Francisco to LA. I wish there were. However, we do have the capacity to complete a high-speed rail link between Merced and Bakersfield.

“I know that some critics will say this is a ‘train to nowhere.’ But that’s wrong and offensive,” Newsom continued. “The people of the Central Valley endure the worst air pollution in America as well as some of the longest commutes. And they have suffered too many years of neglect from policymakers here in Sacramento. They deserve better. High-speed rail is much more than a train project. It’s about economic transformation and unlocking the enormous potential of the Valley.”

He promised to continue regional projects north and south and to finish Phase 1 environmental work. “We’ll connect the revitalized Central Valley to other parts of the state, and continue to push for more federal funding and private dollars. But let’s just get something done,” he said. “For those who want to walk away from this whole endeavor, I offer you this: Abandoning high-speed rail entirely means we will have wasted billions of dollars with nothing but broken promises and lawsuits to show for it. And by the way, I am not interested in sending $3.5 billion in federal funding that was allocated to this project back to Donald Trump. Nor am I interested in repeating the same old mistakes. Today I am ordering new transparency measures. We’re going to hold contractors and consultants accountable to explain how taxpayer dollars are spent – including change orders, cost overruns, even travel expenses. It’s going online for everybody to see. You’re also going to see some governance changes, starting with my pick for the next chair of the High-Speed Rail Authority, Lenny Mendonca, my Economic Development director. Because, at the end of the day, transportation and economic development must go hand in hand.”

Newsom commented on the PG&E bankruptcy, saying, “We are all frustrated and angry that it’s come to this. PG&E didn’t do enough to secure dangerous equipment or plan for the future. My administration will work to make sure PG&E upholds its obligations. I have convened a team of the nation’s best bankruptcy lawyers and financial experts from the energy sector. They will work with my strike team to develop a comprehensive strategy that we will present within 60 days. We will ensure continued access to safe affordable power. We will seek justice for fire victims, fairness for employees, and protection for ratepayers. We will continue to invest in safety, and we will never waver on achieving the nation’s most ambitious clean energy goals.

The governor then pointed out that climate change is putting pressure on all of California’s utilities, public and private, and that two recently had their credit ratings downgraded. “This pressure comes at a time when the entire energy market is evolving. From roof-top solar and wind generation to smart grid technologies. From Community Choice Aggregators to direct access service. More and more of our electricity now is procured outside of investor-owned utilities,” he said. “Regulations and insurance practices created decades ago didn’t anticipate these changes. We must map out longer-term strategies, not just for the utilities’ future, but for California’s energy future, to ensure that the cost of climate change doesn’t fall on those least able to afford it.”
California’s Governor Warns Climate Change Pressuring Utilities, by Environmental Protection Staff, Environment Protection, February 14, 2019.
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