Aerial view of Lake Shasta & dam with low water.

What’s more important: High-speed rail or water? Proponents of a proposed ballot measure would force voters to choose just that.

The measure would redirect $8 billion in unsold high-speed rail bonds and $2.7 billion from the 2014 water bond to fund new water storage projects, while restructuring the oversight of those projects and prioritizing water usage in the state Constitution — a move critics say will be confusing and prone to legal challenges.

Proponents of the measure are trying to capitalize on the unpopularity of the high-speed rail project and the popularity of the water bond to substantially boost the funding for water storage projects, which they say weren’t adequately funded by the 2014 bond.

“What this initiative does is pick up where (the water bond) left off and fully funds the other necessary projects that are widely accepted as needing to be done,” said Aubrey Bettencourt, the executive director of the California Water Alliance. “There’s no new projects listed in our initiative.”

A Hoover Institution poll late last year said that 53 percent of respondents would favor scrapping high-speed rail in favor of water storage projects, with just 31 percent against. The water bond passed with 67 percent of the vote.

Constitutional Amendment

The measure would also amend the state Constitution to prioritize the usage of water, making domestic usage the most important, then irrigation and then presumably environmental usage (which is not explicitly stated).

Bettencourt says the new language is necessary to straighten out ambiguity in the current law, where “the Legislature has created more than one first-priority use of water, leaving it to the courts to decide.”

But Tim Johnson, president and CEO of the California Rice Commission, says the proposed language “is extraordinarily unclear, very confusing,” and will likely end up in court. To illustrate, Johnson posed an ambiguous hypothetical situation: What happens when a farmer uses water to decompose straw, is that agricultural or environmental?

Power Shift

The new water agency would divert decision-making authority on these water storage projects away from gubernatorial appointees, as mandated in the water bond, to a nine-member panel elected by the water districts of the four regions with one at-large member, which would likely shift power to agricultural interests over environmentalists.

Johnson argues that the water bond water commission is set to allocate funds for storage projects around 2017 and a new structure would only delay the start of those projects.

“It’s a totally different standard and a totally different group of people to present it to,” said Johnson.

Johnson added that the measure is supported by just a few central valley “fat cats” who only want more water at the expense of everyone else. Bettencourt said there was broad coalition of supporters, with only a few larger farm interests and many small farmers.

Since the beginning of the year, the California Water Alliance’s initiative fund has received $321,000 from donors. Funding came from 16 donors, with an average contribution of $20,000. Four contributions were under $10,000 and one large donation of $50,000 was from a political action committee that’s received many small donations.

The measure is sponsored by Sen. Bob Huff, R-San Dimas, Board of Equalization member George Runner and the California Water Alliance.

An earlier version of this article incorrectly stated that there was no available campaign finance data for the measure’s proponents. We regret this error.

That’s the conclusion of an article in the March-April issue of Eureka, a new periodical by the Hoover Institution at Stanford University. The word Eureka, of course, is the state motto of California.

The article is titled “The Politics of Governor Brown’s Climate Change Proposals,” by Carson Bruno, a research fellow on California at Hoover. “In fact, in 2011, allowed renewables plus nuclear and large hydro-electric accounted for 53.1 percent of California’s in-state electricity generation, easily surpassing Brown’s new target,” he wrote.

Bruno clarified in an email to CalWatchdog.com that he only looked at in-state power generation, which included allowed renewables, nuclear and large hydro generation.

And the discrepancy with the official state tally of renewables as not even 33 percent so far is because of the state’s official definition of “allowed renewables.” According to Bruno, California does not include hydro and nuclear power as “allowed renewables” even though they are non-polluting. It also hides its reliance on “dirty” imported power from other states by categorizing it as “unspecified power.”

Bruno said that, if nuclear and hydro power are included, California exceeded the 50 percent green-power threshold in 2011 when the San Onofre Nuclear Power Plant was decommissioned and a substantial amount of green solar power mainly took its place.

Moreover, adding new hydro and nuclear power would be just as clean an alternative as less steady and more expensive solar, wind or geothermal power, according to Bruno. Wind power stops on calm days; and solar power stops at dusk.

Of course, building more hydro means more dams, which is opposed by environmentalists; and more nuclear power is close to impossible after the Fukushima accident in Japan four years ago.

Electricity mix

To fact check Bruno’s numbers, CalWatchdog.com conducted its own investigation into California’s mix of electricity sources since the enactment of AB32, the Global Warming Solutions Act of 2006. Using its authority under AB32, in 2010 the California Air Resources Board mandated 33 percent renewables by 2020.

California not only does not consider hydroelectric and nuclear power as renewable but hides that the state still partly depends on imported coal power from other states that it has re-categorized as “unspecified power.” In 2013, California got 7.82 percent of its power from coal-fired power plants and 12.49 percent from murky “unspecified power,” totaling 20.31 percent.

The California Energy Commission uses this definition: “Unspecified Sources of Power generally include spot market purchases, wholesale power marketing, purchases from pools of electricity where the original source of fuel is undetermined, and null power.”

According to the CEC, “Null power refers to power that was originally renewable power but from which the renewable energy credits have been unbundled and sold separately. Null power is not attributable to any technology or fuel type.”

Renewable Energy Credits

Renewable Energy Credits are also known as Green Tags.  Instead of trading tons of carbon, REC’s trade kilowatt-hours of wholesale electricity from untrackable sources because electrons from coal and green power are all the same.

RECs are a way for municipal power departments and new municipal Community Choice power buying cooperatives to “green wash” their purchases of imported power from outside California. It is a way of allowing imported coal power, that technically doesn’t add to California’s air pollution, to count as “green” and “clean.”

Yet entirely clean nuclear and hydropower are not considered clean.

When RECs are considered in the state green power mix for both in-state and imported power, California already nearly met or exceeded its 50 percent green power goal in 2009 (49.89 percent), 2010 (50.37 percent) and in 2011 (56.55 percent).

Conversely, when RECs are considered as fossil-fueled power instead of “greenwashed,” the proportion of California’s power from fossil fuel sources has shown no substantial reduction.

Percentage of California Power from Fossil Fuels — 2007 to 2013

In-State and Imported Power

California is meeting its current 33 percent green power goal by including solar, wind and geothermal power as green, excluding hydro and nuclear power as green, reducing nuclear power output and “greenwashing” imported coal power from other states.

Finding the above numbers buried in the CEC’s database may be a Eureka moment. But learning that California hasn’t much reduced its proportion of fossil-fueled power after spending billions of dollars on green energy validates Bruno’s conclusion that California’s green energy policy is “not about climate change, it’s about politics.”

The document comes as Gov. Jerry Brown has called for reforming teachers’ pensions — which need $4.5 billion more a year from the general fund to remain solvent — but only after the 2014 election.

The conference was co-hosted by Hoover Senior Fellow Josh Rauh; David Crane, who advised former Republican Gov. Arnold Schwarzenegger on pensions; and Joe Nation, a former Democratic assemblyman who has been a leader on pension issues. The latter two are scholars at the Stanford Institute for Economic Poilcy Research.

With the hosts, the bi-partisan conference included 39 attendees from across the political spectrum. Others were Democratic Mayor Chuck Reed of San Jose, who is working to put a pension reform initiative on the ballot; and Michael Genest, who served as the director of the state Department of Finance under Schwarzenegger.

The report mainly comes in the form of discussion responses. The first topic concerned the “California Rule” on pensions. Pension legal scholar Amy Monahan, who attended the conference, wrote a paper in 2011 which described the “California Rule”:

“[P]ension benefits for current employees cannot be detrimentally changed, even if the changes are purely prospective….  This Article illustrates that in holding that benefits not yet earned are contractually protected, California courts have improperly infringed on legislative power and have fashioned a rule inconsistent with both contract and economic theory.”

At the conference, three-fourths of the attendees agreed with the statement: “Amending the ‘California Rule’ to allow the state and/or localities to adjust pension benefits going forward would make meaningful reform more likely.” (See chart above.)

If such a change is not made, the only reform possible is what we have seen so far: changing pensions for new hires, which creates a two-tiered system in which old employees enjoy much better pension benefits than newer employees.

Value vs. promises

The attendees were evenly divided on whether emphasis on reform should be put on a) the value (generosity) of the pensions — that is, making sure retirees adequately were taken care of; or b) keeping the promises made to the employees.

On the generosity factor, it noted:

“The generosity of benefits has become problematic. For instance, in 2012, over 31,000 state retirees received pensions of $100,000 (71% higher than California’s 2012 real median household income).”

But if promises are examined, generosity also actually would be a part of the discussion:

“For example, if California legislators or local officials had to fully fund pension plans, the true cost of such plans would immediately be apparent. This would either result in cuts to other services or re-negotiated benefits. Therefore, requiring that promises are fully honored could also lead to more reasonable benefit generosity.”

The split in the attendees’ positions indicates that this will be a difficult issue to address. But another deep recession, with former taxpayers thrown out of work, could highlight again the high pension amounts.

Risk-free

Consensus also was strong for ensuring that pension funds and boards use a “risk-free” rate of return in their projections. Three-fourths of attendees agreed with the statement:

“Requiring state and local pension boards to use a risk-free rate of return, contribute 100% of ARC (actuarially required contributions), and publicly post user-friendly financial statements is a prudent step toward the financial health of pension benefits.”

Even pension funds have been moving in that direction. Just Tuesday, reported the Sacramento Bee:

“The state’s annual contribution to its massive pension fund is about to go up substantially, and much sooner than expected.

“In a victory for Gov. Jerry Brown and his get-tough approach, the CalPERS board on Tuesday set the stage for a rate increase that will cost the state treasury around $400 million beginning July 1. The increase will be phased in over three years and will ultimately cost the state an extra $1.2 billion a year. That will bring the state’s annual payout to CalPERS to around $5 billion.”

Unions