Green Energy Bill Headed to Gov.

MARCH 30, 2011


A bill that would increase California’s energy costs by $7 billion finally made it through the Assembly on Tuesday. It’s headed to Gov. Jerry Brown’s desk for his signature.

The bill is SB X1 2 by Sen. Joe Simitian, D-Palo Alto. It had been presented twice previously and has ignited much controversy over the mandated levels of renewable energy produced, as well as the overall cost to the state’s utility ratepayers.

In what several legislators have referred to as his “legacy,” Simitian’s bill requires Investor Owned Utilities, Publicly Owned Utilities and Energy Service Providers to increase purchases of renewable energy so that at least 33 percent of retail sales are from renewable energy resources, by December 31, 2020.

“This bill establishes California as the national leader in clean energy, improving the environment and stimulating the economy while protecting ratepayers from excessive costs,” Simitian said.

However, the California Public Utilities Commission has warned that increasing the renewables standard would cost utility companies in the state “tens of billions of dollars” and increase electricity costs to ratepayers. In its 2009 Legislative Summary, the CPUC wrote about Simitian’s previous bill, SB 14, “[A]s drafted this measure would make it more difficult and costly to achieve this very important goal,” and “adds new regulatory hurdles to permitting renewable resources in the state, at the same time limiting the importation of cost-effective renewable energy from other states in the West.”

Shocking Ratepayers

Republicans have been steadfast in opposition to the measure because of future high increases to ratepayers, as well as the increasing regulations on public and investor-owned utilities.

But Democratic legislators have championed the bill all along. Democratic Assemblyman Jared Huffman of San Rafael on Tuesday called it “one more important piece of public policy.” The bill has now passed through the Senate and made it out of the Assembly on Tuesday, with nearly a party-line vote in both houses.

And while supporters insist that the strengthening of the state’s commitment to increasing renewable energy would create business opportunities and help attract jobs, several Republicans denounced the claims that it will be a boost to business.

Assemblyman Dan Logue, R-Linda, told Assembly colleagues on Tuesday that 120,000 jobs were destroyed in the state last year. “This body has created hostility for most of California,” said Logue. He warned that more businesses will pack up and leave the state when faced with skyrocketing energy costs. “This type of legislation destroys the businesses of the state.”

And Republican Assemblyman Curt Hagman of Chino Hills said that the increased costs to California’s existing businesses outweigh the attraction of new green energy businesses.

Congratulations were offered to Simitian several times by fellow Democrats. “I want to congratulate Sen. Simitian for his tenacity,” said Democratic Assemblyman Wesley Chesbro, of Humboldt. “The bill has gotten better as it goes along.”

Simitian has testified in recent committee hearings that the implementation of SB X1 2 will provide better air quality in the state, reduce greenhouse gas emissions and reduce the state’s reliance on foreign oil, while providing more opportunity for investment in businesses that provide green jobs.

Earlier this month, at a joint hearing of the Assembly committees on Accountability & Administrative Review, and Local Government, Simitian presented SB X1 2. His similar bills were killed in committees this year, or last year were vetoed by then-Gov. Arnold Schwarzenegger. At that hearing, opponents testified that the increased renewable standard was unrealistic, and even retroactively puts the renewable standards into place, ultimately penalizing energy producers.

Hurting Investor Utilities.

One energy expert shared concern that publicly owned utilities don’t face the same threat as investor-owned utilities, which have to make the very expensive investments into plant infrastructure out of profits and operating costs. By contrast, public utilities just keep coming back to the California Public Utilities Commission to ask for more taxpayer money.

And he said that, because of threats to protected species, environmentalists have been preventing wind and solar farms from operating at full capacity, or even from being built.

But legislators have still pushed for the higher renewable energy standards on energy producers, and finally passed Simitian’s bill.

Assisting the passage of the renewable energy mandates were four Assembly Republicans: Cameron Smyth of Santa Clarita, Nathan Fletcher of San Diego, Jeff Miller of Orange and Katcho Achadjian of San Luis Obispo.

“I support the measure, but oppose RPS [Renewable Portfolio Standard] in part,” Smyth said. “But if we do not take the bill and move forward, 33 percent will still be done by unelected boards and commissions without proper vetting. I would rather vote for a bill here today, than vote no.”

In a state where we cannot yet produce enough electricity for our own use, the mechanics of achieving this level of renewable energy is rarely discussed.

Based on a recent interview I had with an energy expert, I recently wrote in Energy Prices Are Going Up, “In the entire history of energy in California, the state has never been able to create enough electricity to keep up with our own usage. This means that California buys 20 to 30 percent of its energy on the energy market from out-of-state energy sources, which leads to criticism of the stringent renewable energy standards. Many in the state say that increasing renewable energy standards will kill private business, as well as investor owned utilities.

“The other catch is that California legislators have imposed regulations on how much of the renewable energy is purchased outside the state, leaving many in the energy business to say that it can’t be done given how much energy we already purchase from other out-of-state sources, and because wind and solar power are not reliable.”

Nothing has changed since then. And the state has learned nothing from the electricity crisis and blackouts of a decade ago.

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