California needs to diversify its energy portfolio and shield ratepayers from rising costs, according to Jennifer Granholm, a former U.S. secretary of energy who spoke last week at the REACH Central Coast Ideas and Action Summit. 

Speakers discussed energy, housing, emerging technologies and education at the annual event, which was held at UC Santa Barbara on Friday.

Granholm was energy secretary in President Joe Biden’s administration and is a former governor of Michigan.  

California has high electricity costs and is facing big increases in demand from data centers and electrification of vehicles, Granholm said. 

The state should be looking at policy responses to “prevent the increased demand from being shared among ratepayers,” she said.

Peak electricity demand is expected to grow 15% by 2030. 

Granholm, who sits on the Southern California Edison Co. board of directors, said large load users such as data centers could bring electricity rates down for everyone if they’re required to bring capacity to the grid. 

Those operators could also agree to dial it down in moments when the grid is nearing capacity, such as times of extreme weather, or add long duration storage, she said.

Data centers could be positive for economic development if added with “guardrails,” she said.

“California electricity rates are ridiculously high, the second highest in the nation behind Hawaii, so there should be a reason there is a total focus on this in addition to other cost-of-living reasons,” she said.

Last week, a California watchdog released a report urging policymakers to manage the data center industry’s impact on the power grid and electricity prices.

“The costs that data centers impose on the electrical grid should be paid by the centers themselves, not by average California families already struggling with high utility bills,” said Pedro Nava of Santa Barbara, chair of the Little Hoover Commission, the independent bipartisan body that produced the report. 

Diablo Canyon Nuclear Power Plant

Granholm was one of the people responsible for approvals to allowing the Diablo Canyon Power Plant to continue operating, noted moderator Kate Gordon of California Forward. 

“Nuclear should be part of the mix” of the state’s energy portfolio, Granholm said.

She added that a commercial fusion plant is likely years away but is the “holy grail.” 

Diablo Canyon provides many well-paying jobs to the region, and is the largest single energy source in the state.

The plant was going to close, but now plans to continue operating until at least 2030. PG&E has been collecting approvals from state agencies, including the Central Coast Regional Water Quality Control Board, the San Luis Obispo Tribune reported.

In November, many local leaders urged the California Coastal Commission to approve Diablo Canyon’s permits to continue operating. They said it is a vital economic and energy-producing source in the region. 

“Santa Barbara County suffers from some of the largest wealth gaps in the state and the nation,” county Supervisor Bob Nelson said, adding that Diablo Canyon and PG&E are some of the largest employers in the North County region and provide head-of-household jobs. 

“The state has mandated homes and cars and the state become electrified, and how do we do that if we don’t have Diablo online?” Santa Maria Mayor Alice Patino asked at the meeting. 

Battery Storage and New Technologies 

“If I were investing today, I would be investing in long-duration energy storage like right now” because of the demand that data centers are placing on it, Granholm said at the UCSB event.  

She said that is “despite the Moss Landing issue.”

That battery storage facility fire caused public health and environmental damage in Monterey County. The Moss Landing plant used an old technology, she said. 

The Santa Barbara County Board of Supervisors has approved several solar projects on county-owned land and did not include battery energy storage systems over safety concerns. The board also voted to pursue more local authority regulating battery storage systems. 

Granholm said the new, efficient, lower-cost technology associated with clean energy gets her excited about the future, including next-generation solar panels and lower-cost batteries for electric vehicles. 

Federal policies lowered demand for electric vehicles, but the movement to EVs is “a one-way ratchet: Once you get one you’re not going back,” she said. 

“So, the lowering of costs in all of these, and of course the future stuff like fusion, wave energy, all give me huge hope that we in California will be driving the clean energy future for the country, and that includes nuclear,” Granholm said.