Growing Renewables Targets Bump Up Against State Lines

Nevada?s and Arizona?s renewables development may stay within state lines, and California supplies will likely not be tapped to help meet those states? renewables goals. Nevada?s deadline for responses on its renewables plans is June 20. Nevada?s policy on renewables is that they must come from inside the state or have a direct transmission or distribution route into a utility interconnection in Nevada. That is similar to California?s set-up, which requires renewable electricity to be deliverable to the state. Bob Balzar, director of energy efficiency and customer strategy for both Nevada Power and Sierra Pacific Power, expects a dearth of California bidders for neighboring states? requirements because developers will get a better price for electricity in California. Residential rates in the Golden State are considerably higher than Nevada?s average of about a dime per kilowatt-hour. ?I would expect anywhere from no bidders in California to one or two small projects less than 10 MW being bid into Nevada,? Balzar said. California will need all its green power supplies to met its 20 percent green mandate by 2010, be added. ?I don?t see California being a net exporter of energy in my lifetime.? The Arizona Corporation Commission, for now, has a go-it-alone attitude and is requiring new resources to stay inside the state as it revamps its existing renewables standards. Some say Arizona?s position may be illegal. Also, some fear that the development of regional renewables programs could push up prices for the state?s ratepayers because of less competition. Heather Murphy, ACC spokesperson, said, ?Certainly, the intent is to have these projects grow within our state. That may come up for debate.? The ACC, though, could grant waivers to projects outside the state?as long as there is a partner in Arizona, she said. Briefly, the ACC is proposing that 1 percent of each utility?s kilowatt-hour sales this year come from renewables. That figure ratchets up by a quarter of a percentage point yearly through 2008, by a half percentage point yearly through 2014, and by a percentage point yearly through 2025, when it will be at 15 percent. The collections from ratepayers will funnel back to utilities to pay for renewables purchases and develop projects. Arizona?s restrictive position has drawn some negative comment. Diane Brown, executive director of the Arizona Public Research Interest Group, which favors renewables, said, ?We appreciate the sentiment of the commission to use more of Arizona?s home-grown renewable sources, like its solar and its wind. However, we believe that, in addition to using Arizona?s resources, it is appropriate to look at other states if it means using cleaner energy.? The Arizona Public Interest Research Group and several other advocates of renewables have filed a joint memorandum with the ACC indicating positions that: Significant Arizona resources will be developed no matter what. Out-of-state resources could provide competition that would lower the cost to Arizona ratepayers. The inside-the-fence stance could violate interstate commerce regulations. Arizona?s excess renewables might be shunned by other states not cottoning to a state that doesn?t want to work with them. V. John White, executive director of the Center for Energy Efficiency and Renewable Technology, thinks that California and Arizona utilities should partner to develop renewables. He described Arizona?s position as shortsighted and tied to potential legal risks. ?The Commerce Clause makes it hard to limit your purchases to only in-state resources,? he said. ?They need to . . . be less parochial and recognize that what we want to do is grow renewables throughout the Western grid and keep the coal in the ground.? White sees developing renewables as a regional undertaking. He warned that restricting renewables development to a particular area, such as within state boundaries, limits competition, which increases the cost of power. ?We work with people who are developing projects in California, but we also know that some of these guys are capable of developing elsewhere,' he said. "Nevada, Arizona, Oregon, California all have potential to be substantial contributors to a regionwide renaissance that can give economic development every bit as valuable as coal without the pollution and the global warming.? The Western Governors? Association, on the other hand, has several task forces working on various facets of Western renewables development, including transmission, that will culminate in a final report in about a year. Jack Tigott, director of renewables affairs for Calpine, also doesn?t see Arizona?s position as threatening to Western renewables, though he sees a crimp to developing large projects with economies-of-scale advantages. He favors a trading system among Western states and appreciates California?s accepting renewables, no matter the state of origin, if the electricity can be delivered to California. Meanwhile, San Diego Gas & Electric doesn?t have the option of getting its renewables from a wide area?including neighboring Arizona and Nevada. The company, landlocked by transmission constraints, was expected to rely heavily on purchasing renewables credits, policies for which haven?t been finalized in California. Ed Van Herik, SDG&E spokesperson, said that the company?s renewables sales amounted to 5.5 percent of overall sales and that SDG&E was committed to reaching 20 percent by 2010. The hitch, though, is delivery. The company probably will need additional transmission to obtain additional renewables, he said, adding, ?Inside California doesn?t do us any good if it?s not in our area.? The company has been evaluating offers in a solicitation for renewables supplies, though there is no timetable for when results will be announced. He declined to discuss how the utility might fare once the projects are evaluated. He said SDG&E plans another solicitation around late June or early July.

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Growing Renewables Targets Bump Up Against State Lines

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