Aggressive Renewable Energy Standard About To Hit California

As state Senator Mark DeSaulnier said to me a few weeks ago, on a majority-vote basis, California remains in the vanguard of the country. The Legislature is poised to prove that by the end of the session, if they manage to get to the Governor's desk the most aggressive renewable energy standard in America, with a target of getting 33% of all energy from renewable sources by 2020. Most stakeholders appear to be on board with this standard, including the utilities, who won't reach the current RES goal of 20% by 2010 (Southern California Edison Co. is at 15.5%, Pacific Gas & Electric Co. is at 11.9% and San Diego Gas & Electric Co. only at 6.1%, as of last year). They are confident that the transmission grid, helped along by federal stimulus money, will allow them to transfer renewable energy freely enough to reach the 33% standard. The question, posed today by the LA Times, concerns where that energy will come from.

The main argument is over how much of the new green power must be generated within California's borders. Another point of contention is which is more expensive: in-state renewable energy or wind and solar power from facilities elsewhere in the West [...]

Unlike the current 20% renewable energy law for 2010, the two proposed bills with goals for 2020 have enforcement provisions, including financial penalties for failing to meet renewable energy procurement levels.

They also broaden the requirements to include publicly owned utilities, such as the Los Angeles Department of Water and Power.

A big sticking point in the debate is how much renewable power the state's utilities are allowed to buy or generate out of state. The current law has no limit.

The utilities favor that, but labor unions and their allies want a provision in pending legislation that at least 80% of the power be generated in California.

Unions and their supporters say that most of the new power plants should be built in state so that California workers could snag most of the new green jobs and other benefits involved. "If the people of Wyoming receive the jobs, the tax revenue and the infrastructure, what benefit are Californians going to get other than higher electric bills?" said Matt Freedman, an attorney with the Utility Reform Network, a ratepayers' group. "The question is, 'Who is going to benefit from the 33% standard?'"

First of all, I can't believe that the 2006 law has no enforcement provisions. At the very least, there has to be some incentive to get the utilities to meet the standard, otherwise, as we're seeing right now, they'll slow-walk it.

To answer the man from the Utility Reform Network who asked, "Who is going to benefit from the 33% standard," the answer is that we all will, both by lower emissions and by setting a marker for other states to follow. Renewable energy is extremely popular, and if California acts boldly to set a high standard, they will see a residual benefit. There's probably a sweet spot in between no limit to out-of-state production and 20%, that can benefit both the environment and job creation in California. Perhaps a small tariff for importing renewable energy could be created to level the playing field.

Regardless, we're very likely to see this precedent-setting standard this year.

The bill numbers are SB 14 (Simitian) and AB 64 (Krekorian).