Governor’s State Address Gives Nod to Energy Issues

By Published On: January 10, 2004

In Governor Arnold Schwarzenegger?s “state of the state” address this week, he criticized energy agencies for being uncoordinated and too numerous but at the same time proposed creating a new entity. In his January 6 speech, Schwarzenegger outlined creating a ?green bank.? This new institution is supposed to seek out a variety of funding sources, including private investment, commercial and institutional lenders, and revenue bonds, to back loans for energy-efficiency retrofits of commercial and multifamily residential buildings. One source of funding mentioned was $170 million in potential bonds from the California Alternative Energy and Advanced Technology Financing Authority (CAEFTA). CAEFTA is within the state treasurer?s office, and the hoped-for funding is not an actual pot of money but represents bonding authority. Schwarzenegger promised that a task force will be created to develop a loan package for building owners. It is likely that green power loans will subsequently be made available to homes and small businesses because of the payback from energy savings, said Terry Tamminen, the new California Environmental Protection Agency secretary. Tamminen is the point person for the governor?s green energy plan, which includes encouraging builders to install solar power systems on new homes. The energy action plan is also tied up with his boss?s environmental initiatives, which include development of the ?hydrogen highway??a plan to increase the use of low-tailpipe-emission hydrogen fuel for vehicles. The green building plan is similar to a project launched by the California Power Authority (CPA) last year. While the governor?s plan is aimed at residential and commercial buildings, the CPA focused on state buildings. The CPA project was never funded, according to CPA chief executive officer Laura Doll, because of a confluence of developments, including a pinch on nearly every state agency?s funds. Doll, however, said that the governor?s plan could dovetail with her agency?s legwork on its project. ?They could easily be consolidated in one program,? she said, adding that the agency has begun discussions with the administration and that such a plan would be set up quickly. Other than that measure, the governor reiterated earlier energy policy goals, including reducing the number of state agencies, which add up to an unlucky 13, according to his calculations, as well as reforming the energy market and re-renegotiating the state?s long-term power contracts. He also pushed, without specifics, to lower costs for large energy customers because of high retail energy prices, presumably via a rekindling of direct access. ?If we do not act now, California will face energy shortages as early as 2006,? Schwarzenegger warned. He plans ?to create a coherent strategy and reorganize bureaucracy.? In spite of his tough talk, there have been virtually no discussions about the state?s energy policy with state lawmakers, say some Capitol insiders. The state chief also urged the CPUC and the California Independent System Operator to set reserve requirements, something in the works for a good length of time by these and other agencies, including the California Energy Commission and the California Power Authority.

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