CEC Wants to Focus Solar Subsidies

The California Energy Commission approved the 2006 Renewable Energy Investment Plan February 1, placing a greater priority on subsidizing the state's Million Solar Roofs initiative. The change would come at the expense of supplemental energy payments for new renewable energy facilities built to meet the state's renewable energy portfolio standard. However, the CEC said it would ask the Legislature, which must approve the plan for 2007-12, to allow it to shift funding allocations mid-course to address changes in the energy market. "These dollars are being redirected into areas the governor has specifically identified," said Joe Desmond, commission chair. He said that the commission will seek flexibility from lawmakers to reallocate - without legislation - the $750 million in funds the CEC expects to spend under the plan over the next five years. However, others said that shifting subsidies from geothermal plants, wind farms, and other large renewable energy operations will likely prevent the state from achieving its goal of a 20 percent renewables portfolio by 2010. "The RPS goals may not be achieved," said Steven Kelly, Independent Energy Producers policy director. To meet the goals, investor-owned utilities will have to enter contracts for new renewable energy facilities that cost more than they have in the past. Those contracts may require more supplemental energy payments, Kelly said. The proposed shift would affect how the CEC allocates money for promoting renewable energy collected from California electricity ratepayers through the public-goods charge. Under the Energy Commission's new plan, funding for new renewables would be cut from 51.5 percent under the current five-year plan to 38 percent. New renewables projects would be considered those built after the program is reauthorized. The commission would increase the share of subsidies for emerging renewables - largely the governor's and now the California Public Utilities Commission's solar plan - from 26.5 percent to 48 percent. Existing renewables - mostly older biomass and solar thermal plants - would lose, taking a cut from 20 percent to 10 percent of the funds. The plan would hike funding of consumer education programs from 1 percent to 4 percent of the money. "Nobody has a crystal ball" about how best to promote renewables, said commissioner John Geesman. The plan, he said, is based on the best information the commission has at this time. For the CEC's renewable energy program to continue, the Legislature must reauthorize it before the end of the year. Lawmakers asked the CEC to report its recommendations for the next five years by March 31. In other action, the commission formally approved the Renewables Portfolio Standard Procurement Verification Report showing that two utilities are running behind in meeting the state's green energy goals (Circuit, Dec. 9, 2005). The revised report shows that Pacific Gas & Electric and Southern California Edison are lagging behind their procurement targets. The revisions were in response to utility concerns that the report contained miscalculations. PG&E missed its 2004 incremental procurement target by 425,110 MWh and Edison by 382,623 MWh. San Diego Gas & Electric exceeded its target by 229,928 MWh. The commission also deemed that applications by Edison Mission Energy to build two new power plants in Edison territory, one in the City of Industry and one in Romoland, are complete (Circuit, Dec. 16, 2005). The Energy Commission will join in a $14 million U.S. Department of Energy program to conduct pilot projects in the Western states to sequester carbon dioxide emitted by burning fossil fuel, including in power plants. Carbon dioxide could be captured at a cost of $40 per ton by retrofitting California power plants, said Larry Myer, CEC technical director for the project. The project is known as the West Coast Regional Carbon Sequestration Partnership. The partnership, with participation of some 70 organizations from Western states, will establish a pilot carbon dioxide sequestration site in rock formations in northern Arizona. It also will look at potential sequestration sites in California, from forests to geologic formations.

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CEC Wants to Focus Solar Subsidies

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