Bills Give Direction to Agencies While State Energy Policy Lags

By Published On: April 17, 2004

Amended legislation that would require the California Public Utilities Commission to factor economic impacts into its decision making passed out of the Assembly Utilities and Commerce Committee on April 12. Votes were postponed on bills that would prohibit insolvent private utilities from paying out executive bonuses, such as Pacific Gas & Electric did last year, and require the California Energy Commission to prioritize the siting of modernized power plants. Meanwhile, legislators, regulators, and others eagerly await word from the governor on what the state?s energy policy will be. A measure sponsored by the Chamber of Commerce that would require the CPUC to exercise discretion about whether to assess the economic benefits and burdens of its decisions passed on a 10-0 vote. AB 2803 by Jerome Horton (D-Inglewood) originally sought to create an Office of Economic Development within the commission but would have provided no additional funding. Several lawmakers saw the proposal as adding another ?layer of bureaucracy? that would further bog down the commission and/or result in more legal challenges to CPUC decisions. The reworked bill omits the new office but requires the CPUC to include in its final decision findings on whether it was appropriate to conduct an economic impact assessment without accompanying funding. AB 2303 by Mark Leno (D-San Francisco), which would foreclose bankrupt investor-owned utilities from paying retention bonuses to company executives with ratepayer funds, got mired in debate over whether the bill would interfere with utility employee contracts guaranteeing bonuses if certain performance criteria were met. Leno said he doubted his bill would reach beyond special executive bonuses but agreed to amend it to ensure the legislation is limited to that purpose. PG&E lobbyists steered clear of the bill. The legislation may come up for a vote next week. A bill that would give priority to repowering projects generated considerable debate and resulted in a postponement of a vote on the matter. AB 2652 by Patricia Bates (D-Laguna Niguel) would make prioritizing the fossil-fuel plant repowerings state policy. It faced considerable opposition from Sempra and Calpine, who asserted the bill would give one set of generators a leg up, thus skewing competition. ?This bill would discourage the permitting of new clean generation,? said Kassandra Gough, Calpine lobbyist. Bill proponents NRG Energy and Dynegy expected their proposal to create considerable controversy. They said the bill achieved the desired result?highlighting the need to create a level playing field in the generation arena. ?We welcome competition, but let?s look at it on a total cost basis,? said Greg Blue, Dynegy?s governmental affairs director. By including not just the cost of the power plant but also transmission losses and costs, new lines or upgrades, and voltage support, a non-utility-built plant could cost less than what is currently considered by regulators when making decisions about utility-sponsored plants, which have favored utilities. NRG governmental affairs manager Jesus Arredondo added that Sempra?s Otay Mesa proposal involved $125 million in new lines and Southern California Edison?s Mountainview plant included $110 million in upgrades, figures not factored in when project costs to ratepayers are compared. NRG and Dynegy own and manage, through a company called West Coast Power, the El Segundo plant, which has been certified for repowering. Their two other facilities, Encina and Long Beach, may seek licenses from the CEC to allow significant upgrades. Committee chair Reyes said the financial hit on ratepayers resulting from power plant projects?both repowered and new proposals?will be given a broader and deeper look during next week?s hearing on AB 2006. The bill by Assembly speaker Fabian N??ez (D-Los Angeles) would establish a core-noncore market for direct access to nonutility providers. Jenny Oropeza?s (D-Long Beach) AB 2685, which proposes creating a new Energy Independence Board to help advance renewables projects rated at less than 50 MW, was overhauled and passed on a 12-0 vote. Rather than creating a new entity, the bill would reactivate the Office of Planning and Research?s role in facilitating the development of wind, solar, and biomass proposals. During former governor Gray Davis?s administration, staff in the OPR helped renewables developers get their proposals off the ground, particularly at community colleges, according to Gary Matteson, former OPR staff member. The new governor eliminated this section of the OPR. Republican committee members, along with the chair, took issue with the bill?s definition of renewables projects as only those defined as ?green? under state law. They objected to excluding large hydro projects from the category.

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