How much raising the renewable energy bar to 33 percent will cost is anyone’s guess but legislation setting a one-third alternative power mandate passed the Senate Energy, Utilities & Commerce Committee on a 6-3 vote March 3. Reaching 33 percent by 2020 could cost $10 billion a year, raising utility bills 30 percent a month, Division of Ratepayer Advocates analyst David Aschukian told the committee. The California Public Utilities Commission’s cost projections he referenced also estimate that new transmission lines required to attain the higher green energy target would tally an additional $10 billion. Aschukian urged that renewable energy costs be transparent and that ratepayer protections be put in place. Others agreed. “We need a mechanism to keep costs in check, or a check on us,” said Senate energy panel chair Alex Padilla (D-Pacoima). Senator Joe Simitian (D-Palo Alto) refuted the CPUC’s cost estimates, saying it was guesswork and failed to factor in the costs of relying on limited fossil-fueled plants. Simitian, one of the key authors of the green energy bill, SB 14, said it reflects that a robust renewable industry is intertwined with a robust business climate. “This is an opportunity to create clean jobs here in California.” Senate President pro Tem Darrel Steinberg (D-Sacramento) has made early passage of the bill a priority but many of its provisions continue to generate controversy. Under the latest amendments, SB 14 specifies that the one-third renewable mandate is a floor not a ceiling for private and public utilities and energy service providers. The state’s current Renewable Portfolio Standard law--which requires investor-owned utilities to meet one fifth of their power needs with wind, solar and other alternative energy resources by 2010--would remain in place under the bill. So would a three-year grace period that gives utilities until 2013 to hit 20 percent. However, after utilities meet the 20 percent standard, they would become subject to new rules under the pending bill, although it also would allow a three-year grace period for making the 33 percent green power requirement. That’s because power projects come online in different spurts. Simitian told the committee that changing renewable rules for utilities before they reached their 20 percent mandate would create “perverse incentives.” Padilla disagreed. “It is not the best approach to allow utilities to play by different rules when they hit 20 percent.” The 20 percent renewable portfolio rules are considered overly complex by renewable developers, in part because renewable supply costs are measured against a fluctuating market price referent. Utilities would be able to count their current hydropower, wind, and solar resources towards the 33 percent standard under SB 14. If utilities do not need new power supplies, they would not be required to buy renewable energy. The small muni in Trinity County, for example, meets all of its needs with its existing hydropower, thus is exempt from buying additional renewable supplies. Unresolved is the role for renewable energy credits--the green attribute of a renewable project and not the actual juice--in meeting the 33 percent mandate. They are expected to be limited so that in-state wind, solar, geothermal, and other projects are built. Also in flux is the language detailing how the California Energy Commission shall regulate munis. Provisions curbing the CPUC’s authority were deleted to ensure the renewable energy mandate is the measure’s focus (Circuit, Feb. 13, 2009).
