A Good Election for Onsite Generation

In Tuesday’s election, candidates who support clean generation technology fared better than their opponents, in defiance of the trend in other parts of the country. From the top of the ticket on down, we list the candidates and propositions that were up for grabs with a brief discussion of which outcome was better for onsite and/or renewable energy development. Assembly Bill 32, California’s Global Warming Solutions Act of 2006, and the proposition to undo it, Proposition 23, were at the center of the discussion for cleantech businesses. While not a litmus test, there was a strong correlation between support for AB 32 (and therefore opposition to Prop 23) and success in winning the election. A case could also be made that this is simply a partisan issue, as all the winners (AG race still pending) were Democrats, and AB 32 passed on a mostly party-line vote. But the No on 23 campaign was a bipartisan issue, with former Reagan Administration Secretary of State George Schultz co-chairing the campaign. And Prop 23 failed by numbers that greatly exceed the percentages of party registration. So an even stronger case could be made that voters were voting to support the California environment, and Republicans found themselves on the opposite side of that issue from most California voters - Republicans and Democrats alike. Governor Jerry Brown (D - 54%) over Meg Whitman (R - 41%). Brown supports AB 32 and opposes suspending it, but suggests there may need to be “adjustments” if parts of it are found to cause hardship on any industry. Whitman says she would have vetoed AB 32 and said she would suspend the law for a year, saying that the regulations “will discourage job creation and could kill any recovery.” She did however oppose Prop 23, and supports the state’s 33% renewables standard, but suspending AB 32 would complicate ARB’s regulatory implementation of the 33% standard. Brown opposed Prop 23, calling it “regressive, shortsighted and counterproductive” to development of a cleantech industry. He also supports the state’s 33% renewable energy standard. US Senate Barbara Boxer (D - 52%) over Carly Fiorina (R - 43%) Boxer’s reelection ensures that she will remain Chair of the Senate Environment Committee. Boxer has a lifelong record of environmental and clean energy advocacy. Fiorina eventually came out in opposition to Proposition 23, but it was late and ambivalent. She has railed against AB 32. Lieutenant Governor Gavin Newsom (D - 50%) over Abel Maldonado (R - 39%). Newsom is strongly in support of AB 32, and equally strongly opposed to Proposition 23. Maldonado supported Prop 23. Secretary of State Debra Bowen (D - 53%) over Damon Dunn (R - 39%). The Secretary of State will likely have little or no influence over state energy policy, but Bowen, as a former member of both houses of the Legislature, has a long and distinguished record of support and advocacy for onsite generation and renewable resources. Attorney General Still Undecided. Kamala Harris (D - 46%) v. Steve Cooley (R - 46%). Cooley declared victory Tuesday night, but two days later his lead had disappeared and Kamala leads an extremely close race that may not be decided for some time, and may need to be recounted. As of Friday the 5 th , Harris leads by 12,004 votes out of 7.3 million cast, with 2.3 million remaining to be processed. Harris had characterized herself as the better environmental candidate. Her ads attacked Cooley for disbanding the environmental unit at the LA County DA’s Office, but Cooley says it was simply a reorganization. Harris opposed Prop 23, but Cooley did not, saying he’d defend whatever position voters take on Prop 23. Cooley has taken no position on AB 32, but said he would take more of a “go slow” approach than his predecessor, AG Jerry Brown, who has for several years been warning local governments to reduce greenhouse gases in accordance with AB 32’s requirements, particularly with respect to General Plans. Cooley said “I will review every single threatening letter he’s sent.” Harris, on the other hand, said “the next Attorney General must be vigorous to take on criminals who pollute our environment, and I’ve done that work.” Insurance Commissioner Dave Jones (D - 50%) over Mike Villines (R - 38%). The Insurance Commissioner will not be a powerful voice in the energy policy debate, but both candidates are termed out assemblymen. Villines voted against AB 32 in 2006, Jones voted for it. State Treasurer Bill Lockyer (D - 56%) over Mimi Walters (R - 36%). Controller John Chiang (D - 55%) over Tony Strickland (R - 36%). Neither incumbents Treasurer Lockyer nor Controller Chiang were in the Legislature in 2006, but both of their Republican challengers were, and both voted against AB 32. The Treasurer’s Office has been instrumental in making various financing programs available for cleantech companies, especially through the California Alternative Energy and Advanced Transportation Financing Authority. Proposition 23 (39% yes, 61% no). Proposition 23 would have suspended California’s Global Warming Solutions Act of 2006 (AB 32) until such time as unemployment drops to 5.5% or less for 4 consecutive quarters. A very controversial measure supported by out-of-state oil interests, it generated a lot of opposition from Governor Schwarzenegger, environmental interests, cleantech businesses, venture capitalists, and Hollywood stars. With the collapse of climate legislation at the federal level, the eyes of the world were on this measure, and both sides wanted to send a resounding message. Proposition 26 (53% yes, 47% no). Prop 26 is a constitutional amendment requiring that certain state and local fees be approved by a ⅔ vote, including those that address adverse impacts on society or the environment caused by the fee-payer’s business. Previously, the Legislature could raise fees, where the service is more or less directly connected to the fee, with a simple majority vote, but general taxes are subject to a ⅔ vote. The Legislature was also able to enact tax “swaps,” where by one tax was raised and another was lowered in equal amounts, on a majority vote, which now will require a ⅔ vote. Fees increased by local governments will be treated like taxes are currently, and require approval of the voters (majority). The measure was supported by the California Chamber of Commerce, and oil, tobacco, and alcohol industries. Environmental groups were opposed. The Planning and Conservation League dubbed it the “Polluter Protection Act.” The Sierra Club said “it goes against the principle that polluters should pay to clean up the messes they make.” Some said Prop 26 would make it harder to set the carbon fees that are part of AB 32. But Mary Nichols, Chairman of the Air Resources Board who is charged with implementing AB 32, and herself a lawyer, said that Prop 26 would have no effect on AB 32 programs. The Budget Most of the agencies effecting regulations governing renewables and onsite generation are not funded through the General Fund, although that doesn’t make them immune from budget fights and long stalemates on passage of the budget. Intrafund transfers and loans, and employee furloughs have been some recent impacts that damage interests of programs favorable to DG. The protracted budget negotiations in the capitol have also displaced what might otherwise have been useful policy debates on energy topics. Voters passed Prop 25 , which lowers the vote on the budget from its current ⅔ supermajority to a simple majority, by 55% to 45%. It also contains provisions docking pay for legislators when the budget is late. This should make the budget easier to pass on time, as it takes Republicans out of the play. At the same time, voters made it more challenging to pass a budget by essentially cutting off revenues. Prop 24 would have repealed tax credits for business negotiated as part of last year’s budget act, but it was defeated by 58% to 42%, allowing the tax credits to stand, and eliminating $1.3 billion per year of revenue to the General Fund, or as much as $10 billion in better economic times. Proposition 22 passed 61 to 39 percent, eliminating the Legislature’s ability to raid local funds to balance the state General Fund, eliminating another $1 billion or so per year. Finally, Proposition 21 would have raised about $250 million per year via an $18 per vehicle license fee to support state parks, but failed 58% to 42%. So the voters swept all Democrats into statewide offices (assuming Harris hangs on to win), made Democrats responsible for the budget until such time as they are no longer the majority party, but at the same time limited their degrees of freedom.

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A Good Election for Onsite Generation

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