The administration has hailed the project by Houston-based Sable Offshore Corp. to restart production in waters off Santa Barbara damaged by a 2015 oil spill as the kind of project President Donald Trump wants to increase U.S. energy production.

The state oversees the pipelines that run through Santa Barbara and Kern counties, said Democratic Attorney General Rob Bonta.

“The federal administration has no right to usurp California’s regulatory authority,” he said at a news conference. “We’re taking them to court to draw a line in the sand and to protect our coast, beaches and communities from potentially hazardous pipelines.”

But the U.S. Transportation Department agency that approved Sable’s plan pushed back on the lawsuit.

“Restarting the Las Flores Pipeline will bring much needed American energy to a state with the highest gas prices in the country,” said a spokesperson with the Pipeline and Hazardous Materials Safety Administration.

Sable did not respond for comment on the lawsuit.

Trump signed an executive order on the first day of his second term to reverse former President Joe Biden’s ban on future offshore oil drilling on the East and West coasts. A federal court later struck down Biden’s order to withdraw 625 million acres of federal waters from oil development.

The federal administration in November announced plans for new offshore oil drilling off the California and Florida coasts, which the oil industry has backed for years.

But critics say the plans could harm coastal communities and ecosystems.

Bonta said one of the pipelines Sable wants to restart burst in 2015, spilling oil along the Southern California coast. The event was the state’s worst oil spill in decades. More than 140,000 gallons (3,300 barrels) of oil gushed out, blackening beaches for 150 miles (240 kilometers) from Santa Barbara to Los Angeles. It polluted a biologically rich habitat for endangered whales and sea turtles, killing scores of pelicans, seals and dolphins, and decimating the fishing industry.

The drilling platforms were subsequently shuttered.

Sable has faced a slew of legal challenges but has said it is determined to restart production, even if that means confining it to federal waters, where state regulators have virtually no say. California controls the 3 miles (5 kilometers) nearest to shore. The platforms are 5 to 9 miles (8 to 14 kilometers) offshore.

“It’s crazy that we are even talking about restarting this pipeline,” said Alex Katz, executive director of the Environmental Defense Center, a Santa Barbara group formed in response to a catastrophic 1969 California oil spill.

The federal government’s approval to restart the pipelines ignores painful lessons the community learned from the 2015 oil spill, said California Assemblymember Gregg Hart, a Democrat representing Santa Barbara.

“California will not allow Trump and his Big Oil friends to bypass our essential environmental laws and threaten our coastline,” he said in a statement.

California has been reducing the state’s production of fossil fuels in favor of clean energy for years. The movement has been spearheaded partly by Santa Barbara County, where elected officials voted in May to begin taking steps to phase out onshore oil and gas operations.

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Under the new policy, utilities will be required to reduce the price households pay for the electricity they use every time they charge a phone or run an air conditioner. That rate cut will vary from between 8% and 18%, depending on the utility, season and time of day, according to the commission’s analysis.

To make up for the lost revenue, regulators have introduced the concept of a “fixed charge,” a break from California electric billing tradition. For decades electric bills from Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric have been the “pay as you go” variety, with households only paying for the electricity they use. 

Starting in late 2025 for SCE and SDG&E customers and in early 2026 for those with PG&E, the state’s investor-owned utilities will be able to charge customers a monthly fee regardless of how much power the customer draws from the grid. So-called fixed charges are a mainstay of electric billing across most of the country, with an average fee of roughly $11.

The new California charge will be $24 for most customers, but lower income households, who already qualify for discounted electric rates, will see fees of either $6 or $12.

The unanimous vote by the California Public Utilities Commission comes after months of heated debate that pitted Assembly and Senate Democrats and Republicans against legislative leadership and the governor’s office, advocates of rooftop solar against labor unions representing utility workers and environmental advocates against one another.

Backers of the billing change say it’s a necessary step to bring down electricity rates in California, which are among the highest in the country. California regulators want all new cars sold to be electric by 2035 and are taking steps to discourage gas-powered indoor appliances. Those goals are hard to square with sky-high electric prices.

The state’s planned “transition to all electric homes, cars and trucks is truly transformative,” said CPUC President Alice Reynolds at today’s hearing. Under the proposed change all customers “will be better off financially if they electrify — whether that’s purchasing an electric vehicle or switching out a gas appliance with an electric one.”

Opponents argue that the change in billing policy won’t move the needle for most households considering dumping their gas-powered cars and appliances, which can cost tens of thousands of dollars, but will instead needlessly discourage energy conservation efforts while punishing rooftop solar customers.

The policy is a departure from 50 years of regulatory precedent in California, which is “if you use more you pay more and that encourages conservation,“ said Loretta Lynch, a former CPUC president and critic of what she sees as a “pro-utility” bias on the current body. Reducing the penalty on high energy use will also have “huge cost consequences down the road” for a grid that already struggles to keep up with summer-time demand, she said.

The ultimate impact of the policy change may be more muted than either side wants to admit, said Merideth Fowlie, a UC Berkeley economist and one of a handful of researchers to initially float the idea in 2021 of an income-graduated fixed charge as one way to pay for reduced electricity rates. 

The three-tiered CPUC-approved change doesn’t vary much by income and its promised rate reductions are relatively modest, said Fowlie.

“Clearly, I’m disappointed, because I don’t think it comes close to where I think we should be in terms of reductions,” she said. “If this forces another conversation — which is, ‘Why are we paying for wildfire risk mitigation, which is essentially climate change adaptation, or some of these major investments in decarbonisation, on bills?’ — I think that’s an important conversation to have.”

Winner and losers in new California utility fee

Though utilities won’t earn any more revenue or profit as a direct result of the change, there will be winners and losers under the new billing program.

The reduced price of electricity will likely save money for people who use a lot of electricity, such as a large household in an AC-dependent part of the state or the owner of an electric SUV, a heat pump and an induction stove. That reduction will be more than enough to offset the cost of the new fee. Many, if not most, low-income households who qualify for the discounted fixed charge will also emerge as financial winners.

But there are sure to be plenty of losers, too. Smaller households, Californians living along the temperate coast, energy conscious customers and people with solar panels on their rooftops are all more likely to see their total utility bills rise. 

That group makes for a powerful political bloc that has fiercely rallied against the regulatory change for months. Many showed up or called in at the commission hearing. 

“The big utility tax will increase monthly utility bills on four million households while doing nothing to encourage electrification,” said Yvette DeCarlo, speaking on behalf of a coalition of environmental nonprofits, tenant rights groups, liberal advocacy organizations and anti-tax activists. 

Severin Borenstein, another Berkeley economist who co-authored the 2021 study with Fowlie, said modeling suggests that the lower electricity rates under the policy will only increase electric vehicle purchases by roughly 5% above what they would otherwise be. 

“It’s in the right direction, though, and I think that we can’t get to where we need to go unless we start,” he said.

The fixed charge policy was included in a budget proposal by Gov. Gavin Newsom’s administration in 2022, but it wasn’t until last year that many state legislators woke up to it. Twenty-one coastal Democrats, led by Thousand Oaks Assemblymember Jacqui Irwin, introduced a bill ordering the CPUC to reverse course. So too did Senate Republican leader Brian Jones. Both efforts were quietly put on ice at the behest of legislative leadership.  

In a letter Jones and the rest of the Senate GOP caucus sent to CPUC president Reynolds earlier this week, the San Diego Republican expressed some skepticism that the state regulatory body could be trusted to keep the fixed charge at its current level.

“We are particularly concerned that this will only be the beginning,” the letter said. “The CPUC has been granted unchecked power to increase this new charge at any time. If the $24.15 plan is approved, the next proposal may see the fixed charge hiked to $50, $100, or even higher!”

More shade directed at the rooftop solar industry

For California’s residential solar industry, the vote is just the latest regulatory broadside. 

Over the last two years, the CPUC has slashed the payments that utilities are required to give to single family homeowners, apartment buildings, schools and businesses that install solar panels. 

That’s based on the argument, advanced by the commission, the regulated utilities and many energy economists, that relatively well-to-do solar customers have been overcompensated in California since the early 2000s, which has had the effect of off-loading the costs of running the grid onto non-solar households.

Advocates for the fixed charge say assigning solar customers an unavoidable monthly charge is yet another way to balance out who pays for major utility line items like wildfire prevention, subsidies for low income households, EV charging networks and distribution system upkeep. 

“What the fixed charge does is ensure that we’re no longer going to have freeloaders,” Scott Wetch, a lobbyist who represents many unionized workers employed by California’s for-profit utility companies, told CalMatters earlier this month.

Outraged homeowners with solar panels were well represented among those who called in to give public comment.

“I have solar panels on the home, which we got right away to cooperate with California’s move to have 100% renewable energy. But yet we’re getting hit with this unfair tax,” Joy Frew, a self-described senior citizen from San Diego County, told the commission over the phone.

“People that really invested in solar trying to do the right thing for the planet — all of a sudden we’re being slapped in the face for doing it,” said a caller named Steve Randall from San Clemente.

Not that every Californian with a solar panel above their head is opposed to the fixed charge. Fowlie, one of architects behind the idea, said her family hopped on the solar bandwagon as a way to bring down their monthly utility bill. 

“I’m gonna be the biggest loser under this proposal,” she said, prior to today’s vote. “I would be in that higher income bracket and I have solar, so my bills would go up. But I think it’s a win for California, so I’m a big supporter.”

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Allan J. Feifer | Contributor

My first blush takeaway from the mid-terms is how disaffected so many of us are. Feeling poorer through inflation is just depressing. This includes the psychological damage felt when your loved ones are also hurting. Our society is inarguably in steep decline with no end in sight.

But what if there was a way to immediately change such a negative outlook? I can conceive of a way to fix the most basic problem that led us to where we are today. One which won’t have the Treasury print more worthless dollars in an attempt to make you feel better or that supports the bastards that did this to us in the first place?

What can we do that would change the current dynamic and slay the inflation monster in no more than a year or two? See the cost of oil and natural gas decline to what they were before the Biden election.

We must recognize that we are in an economic war with some very bad actors. We’ve made some unforced errors that have now come home to roost. High oil and gas prices – high energy prices – have pulled the rug out of the American economy and our psyches in several key ways:

1. A lack of energy independence forces us into unwanted and unacceptable globalist practices

2. High energy prices translate into more government authority and power

3. Expensive energy causes, by itself, a significant slice of our inflation

4. Expensive energy prices lead to a loss of jobs at home, both from the energy production side and the manufacturing sector

5. Our nations become poorer when energy prices are high

6. There is no substitute for oil, no matter what politicians would have you believe

These points are not a secret, kept away from policymakers and others that pull the levers of power. So, why is it this way? Politicians and those always present Destroyers must hold your attention, making you ever fearful, dependent, and despondent so that you continue to be easy to manipulate to accept their policies and actions. Such people are your enemies.

We are kissing up to the likes of Nicolás Maduro of Venezuela, the Ayatollah Khamenei of Iran, Putin in Russia, and MBS in Saudi Arabia. These are terrible options for our democracy caused by awful policy mistakes made by Biden. Inevitably, concessions were/are being made against our best interests. Dealing with outright enemies, or even potential enemies carries a cost that cannot honestly be quantified or verified. We are bearing our throats to some of the worst actors in the world. What good can come of that?

Wouldn’t we rather not be forced to make that Devil’s bargain in the first place? We should be independent of foreign energy, both in peacetime and especially when we are at war. But, did you know that Biden has now drawn down half of our Strategic Petroleum Reserve to boost his favorables? Even more threatening is the dramatic reduction of our reserve of Diesel Fuel; that is down to 25 days! If the supply of Diesel for trucks and engines were cut off tomorrow, widespread panic would ensue in many urban environments.

Ever heard of the term Stalking Horse? The government uses energy price issues to divide us along our various fracture lines. On the Left, high energy prices work to force people into the use of “Green Energy”, already a lightning rod issue. On the Right, enforced high energy prices represent the government reordering our economy in a manner that most find unacceptable.

It does not help when President Biden tells us what he intends. On November 6th, Biden said “No more drilling and plans to shut down coal power all across America.” Coal, oil, and gas represent 79% of our total energy use today. These are the words of a raving maniac, who believes it is better to live in the dark than maintain our place in world markets.

High energy prices dramatically affect our cost of living. Not just for gas or heating oil, but also all the derivative products like plastics, pharmaceuticals, shipping, and travel to name a very few of the tens of thousands of petroleum-based products we need to maintain our standards of living.

The path forward to much less expensive oil is an innovative, “all of the above” Marshall Plan.

1. Announce to our citizens (and the world) a Presidential Directive announcing a National Emergency on Energy. That action, plus a freeze on many existing regulations would unleash energy companies to produce more oil, natural gas, and other technologies as if we were at war and such supplies were needed for our survival. Which they are!

2. I would further subsidize new, near-term technologies such as nuclear to better help us become energy independent. Such actions should be national priorities, irrespective of your beliefs on global warming. Take a look at Lockheed’s Skunk Works project for a truck-mounted and safe nuclear generator. Why don’t we hear more about this? Look at how France has historically built and used nuclear power safely and at much less expense and in half the time we do.

3. Sponsor innovation through a system, not of grants, but of rewards based on meeting short, intermediate, and long-term goals that will ease our dependence on any one source of energy.

4. Guarantee our allies’ energy independence as well, so they also are not dependent on the bad actors of the world. Only through energy independence of the free world will world tensions start to recede. Energy must no longer be a club or a bargaining chip to be used on other nations. We must position ourselves to guarantee supply. This must be a mission we must move to accomplish at light speed.

5. Our nation has the largest provable coal reserves in the world must learn how to turn coal into an acceptable fuel (for example) once again. Our Chinese enemies are still building dirty new coal plants at a rate of 2 a month, while we contemplate shutting down ours without replacing the base load energy they provide.

It’s a dangerous world out there and this is how to fix it, even if President Biden is unlikely to follow any of these policies. If there were less competition around the globe for energy supply, we might actually have less war, less suffering, and peace to give way to a better world for all. This is an aspirational goal everyone should be able to get behind.

We used to do the hard and necessary things but we seem to be unable to do them any longer. I suggest that this be our next moonshot. Let us serve the world with bountiful energy at affordable prices, while making a profit for shareholders.

There are two worlds we can live in. One that is fanciful and does not exist. The other may not be as easy, but it’s the hard decisions that make a difference and challenge us to be our best. Which will we choose?

The fact that we have a President who won’t do any of these things is not important. We must be a nation of ideas so that we can have debates that can change minds. The marketplace of ideas will eventually win.

God Bless America!

Allan J. Feifer: Author, Businessman, and Thinker. Read more about Allan, his background and his ideas to create a better tomorrow at www.1plus1equals2.com

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