What have you always wondered about the economy? Tell Us

What might PG&E — and its customers — get from partnering with Tesla?

Andy Uhler Jul 30, 2020
Heard on:
HTML EMBED:
COPY
The more efficient storage facility should make it cheaper for PG&E to produce energy, which should, eventually, trickle down to ratepayers. Kevork Djansezian/Getty Images

What might PG&E — and its customers — get from partnering with Tesla?

Andy Uhler Jul 30, 2020
Heard on:
The more efficient storage facility should make it cheaper for PG&E to produce energy, which should, eventually, trickle down to ratepayers. Kevork Djansezian/Getty Images
HTML EMBED:
COPY

PG&E and Tesla announced this week that they have broken ground on a huge lithium-ion battery energy storage facility. The system will be designed, constructed and maintained by both companies, and owned and operated by the California power utility.

But, didn’t PG&E just get out of bankruptcy? Does this investment makes sense for the company and for ratepayers in the long run?

One reason PG&E was motivated to build this storage facility in Monterey County, California, is that it’s mandated by the state to provide energy storage capacity. And Mark Specht, an energy analyst at the Union of Concerned Scientists, said, from the utility’s perspective, this partnership makes a lot of sense.

“Tesla is quite advanced with their battery technology, and PG&E was looking for someone who can supply them with good batteries,” Specht said.

The batteries will be used by PG&E to provide power to customers. When the facility comes online, the utility can shut down inefficient natural gas power plants it has wanted to take offline for years. That efficiency should make it cheaper for PG&E to produce energy, which should, eventually, trickle down to ratepayers.

But, “it’s not clear how much and when utility ratepayers will actually start seeing savings in their bill,” said Paul Denholm, with the National Renewable Energy Laboratory.

He said that’s because power systems are multibillion dollar assets that are paid for over several decades.

Marketplace is on a mission.

We believe Main Street matters as much as Wall Street, economic news is made relevant and real through human stories, and a touch of humor helps enliven topics you might typically find…well, dull.

Through the signature style that only Marketplace can deliver, we’re on a mission to raise the economic intelligence of the country—but we don’t do it alone. We count on listeners and readers like you to keep this public service free and accessible to all. Will you become a partner in our mission today?

Your donation is critical to the future of public service journalism. Support our work today – for as little as $5 – and help us keep making people smarter.