State promotes renewable energy at all costs

June 15, 2012

By Joseph Perkins

The California Public Utilities Commission routinely rubber stamps renewable energy projects without discussion. But that was not the case this past Thursday, when Commissioner Michael Florio objected to a solar project that came before the state agency.

It was part of a deal between San Diego Gas & Electric and Sol Orchard, a Carmel company, to buy 50 megawatts of locally produced solar power from 21 individual ground-mounted photovoltaic plants — solar orchids rather than trees — in San Diego County.

The cost of the project, which ultimately will be passed along to the utility’s ratepayers, was 40 percent higher than other such deals the CPUC considered during its meeting. “An expensive and dubious project such as this one simply does not merit our approval,” Florio argued.

Florio’s fellow commissioners ultimately overruled him.

They approved the SDG&E deal with Sol Orchard for 50 overpriced megawatts along with another SDG&E deal to buy 200 megawatts from Mount Signal I Solar Farm in Calexico and a deal by Southern California Edison to buy 250 megawatts of solar power from a McCoy Solar development in Riverside County.

The CPUC’s motivation to approve even the most questionable solar projects is attributable to a state mandate, the so-called Renewable Portfolio Standard, requiring SDG&E, Southern California Edison and Pacific Gas & Electric to generate a third of their electricity from renewable sources such as solar, wind and geothermal by 2020.

If the RPS mandate wasn’t ambitious enough, Gov. Jerry Brown made it even more so with his Clean Energy Jobs Plan. 

Toward the goal of adding 20,000 megawatts of renewable energy capacity over the next eight years, the plan calls for 8,000 megawatts of utility-scale generation of solar, wind and geothermal, as well as 12,000 megawatts of localized generation close to consumer loads and transmission and distribution lines.

Considering that renewable energy sources account for less than 15 percent of in-state electricity generation, according to the California Energy Commission, it seems highly doubtful the big three utilities will meet the 2020 RPS mandate, much less the governor’s unrealistic goal for local generation of renewable energy.

The problem is that the state’s target for renewable energy generation is far ahead of the market for such energy. In fact, private R&D funding for renewable energy is $1 billion less than it was 10 years ago, according to the state energy commission.

That’s because, for all the promise of renewable energy, the price of electricity generated by solar, wind, geothermal and other renewable sources remains higher than the price of electricity generated by natural gas and nuclear power, which, between them, continue to generate 70 percent of the Golden State’s electricity.

That’s why lawmakers have mandated an artificial share of the state’s electricity market to renewable energy. That also is why the state government continues to directly and indirectly subsidize renewable energy.