The California Supreme Court Sept. 28 denied hearing a case involving a challenge to the California Air Resources Board’s plan for carrying out the state’s climate protection law AB 32. The Association of Irritated Residents, an environmental justice group, challenged the plan on grounds it did not consider sufficient alternatives to a carbon cap-and-trade program to meet California Environmental Quality Act requirements. A trial court agreed, ordering the agency to redo the plan. The Air Board appealed and succeeded in getting the court to lift a stay the trial court had placed on going forward with its plan. Meanwhile, it went ahead and redid its plan anyway, adopting the new blueprint this past summer. The state Supreme Court’s action puts the matter to rest for now, but leaves the group free to continue to argue its case before the appeals court. * * * * * Proving the old adage it’s never over till it’s over, utilities and energy industry companies continue to wrangle over the final details of the California Air Resources Board’s carbon cap-and-trade program rules under AB 32, the state’s climate change law. In comments filed Sept. 27, energy industry players raised familiar issues, including concerns about granting greenhouse gas emissions reduction credits for tradable renewable energy credits and the potential for “wealth transfer” from generators to Pacific Gas & Electric. Language regarding tradable renewable energy credits creates “an inconsistency between AB 32 and the recently signed 33 percent renewables portfolio standard mandate,” wrote Eugene Mitchell, Sempra Energy Utilities vice president for state government affairs. The Air Board, he said, needs to revise the current draft of the rules to make sure utilities get greenhouse gas reduction credit for purchasing tradable green tags, which are sold apart from the electricity generated by wind, solar, and other renewable energy producers. Panoche Energy Center asked the Air Board to lean on PG&E to negotiate “an equitable solution” to the company’s inability to pass along the cost of complying with AB 32 (namely, purchasing carbon allowances to cover its emissions) under its long-term contract with the utility. Panoche Energy Center general manager Don Burkhard noted that all generators with long-term contracts pre-dating AB 32 face a similar problem. He suggested the Air Board resolve it by requiring utilities to hold and surrender sufficient allowances to cover the emissions of long-term contract suppliers. Without this change in the rules, Burkhard said the cost of purchasing allowances “will have a substantial negative impact on the financial viability of our facility.” PG&E environmental affairs director and counsel John Busterud maintains, though, that the Air Board’s proposed limit on how many allowances utilities can hold to transfer to their contract generators should be loosened. He urged the Air Board to “revisit the holding limit” to make sure utilities can hold onto enough allowances to cover contract power suppliers and “sufficiently hedge future obligations.” Part of the problem, noted Burkard, is that suppliers like Panoche provide peak and reliability power to the utility, the amount of which can vary based on yearly demand, weather, and other factors. Consequently, their emissions can vary significantly. The issue remains on the Air Board’s table as it races to adopt final amendments to its cap-and-trade rules on Oct. 20 and schedule a first carbon allowance auction next year. * * * * * In what could be one of the last reports of its kind—with the demise of the public goods surcharge on utility bills—the California Energy Commission issued a study Sept. 27 under its public goods charge-funded Public Interest Energy Research program. It concludes that California faces numerous barriers in attempting to adapt to climate change in the decades ahead. The barriers, according to the report by Lawrence Berkeley National Laboratory, go beyond technical and financial limitations when it comes to things like coping with sea level rise. They also include hurdles in the realm of psychology, social relationships, politics, culture, and organizational and institutional structures and relationships. For instance, the report notes that traditionally the response to hazards has involved short-term mitigation steps. When it comes to sea level rise, this typically would entail preparations by emergency authorities for potential flooding—like establishing an evacuation system—and public works-oriented agencies building a sea wall along an eroding beach. However, the researchers point out that once a sea wall is built, it would eliminate beach areas on which a community might depend for its livelihood and identity. The report attempts to identify such conundrums to stimulate governments and communities to begin thinking deeply about how to handle coming adaptation decisions. * * * * * The U.S. Environmental Protection Agency relied on the climate change science of other agencies when reaching its finding that carbon dioxide emissions endanger public health, according to a report by the EPA Inspector General. Earlier, the U.S. Supreme Court ruled that the EPA has authority over greenhouse gases if it finds the emissions to be a public health threat. “This review did not meet all [the Office of Management and Budget] requirements for peer review of a highly influential scientific assessment,” states the Sept. 26 Inspector General report. “We did not assess whether the scientific information and data supported the endangerment finding,” it added. EPA responded that at issue were the “process and procedure.” In a Sept. 28 statement the agency added, “While EPA will consider the specific recommendations, we disagree strongly with the Inspector General’s findings and followed all the appropriate guidance in preparing this finding.”
