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The Senate Rules Committee June 4 approved Mary Nichols as chair of the California Air Resources Board, the agency charged with carrying out the state’s climate change law, AB 32. During her testimony, Nichols dismissed a proposed cap-and-trade program for the power industry recommended by the California Public Utilities Commission and California Energy Commission earlier this year in response to concerns it would transfer money from the public to investor-owned utilities. “We will not adopt a program like that,” said Nichols, formerly chair of the Los Angeles Department of Water & Power board. “I’ve asked the CPUC to not send another thing that looks like a decision. What we need is their staff work.” Nichols’ confirmation was approved on a 3-1 vote, as was the appointment of Dr. John Balmes to the Air Board. Nichols disavowed the plan from the energy agencies in response to concerns voiced by Senator Alex Padilla (D-Los Angeles). He warned that it would require public power agencies like LADWP to clean up emissions and buy emissions rights to operate their power plants. The plan, according to Padilla, could stymie the department’s effort to move to renewable energy and greater reliance on conservation. The energy agencies proposal placed “first deliverers” of power to the state’s grid under an emissions cap and required them to obtain emissions allowances to operate power plants. Money used to purchase the allowances would have been redistributed to utilities under a plan devised subsequently. Public utilities claimed that they might get less money back than investor-owned utilities, resulting in a wealth transfer to the private companies. Senator Bob Dutton (R-Riverside) pressed Nichols and Balmes regarding the cost of reducing greenhouse gases, particularly if a cap-and-trade system is used, noting that history has shown such emissions trading markets are manipulated. “We don’t want to have a failed experience,” he said. Dutton voted against confirming the pair without indicating why. Nichols responded that more analysis is needed before the board makes any decision regarding cap-and-trade, “particularly in the area of economics.” She said that analysis and public meetings to discuss options for cutting greenhouse gas emissions would continue into the fall before the Air Board issues a final draft plan for carrying out AB 32. An initial draft is due out this month. She also said she met with Governor Arnold Schwarzenegger and briefed him on the concerns and complications involved in a carbon cap-and-trade program to carry out AB 32. Balmes--a practicing San Francisco area physician and professor of environmental and pulmonary medicine at the University of California at San Francisco--said he thought a carbon trading system offers the potential to cut the cost of reducing greenhouse gas emissions. However, he said it should be used only in conjunction with a host of other strategies to cut greenhouse gases, including direct regulation. “The reality is Congress is going to pass a national climate bill,” Nichols said. Her confirmation hearing came as the full U.S. Senate took up climate change legislation for the first time. It would create a federal cap-and-trade program. Nichols, an attorney, has spent almost 40 years working in the environmental field. She previously chaired the Air Board under Governor Jerry Brown, chaired the state Resources Agency under Governor Gray Davis, and headed the air pollution control office at the U.S. Environmental Protection Agency under President Bill Clinton. Schwarzenegger appointed her to chair the Air Board last summer after the previous chair Robert Sawyer resigned abruptly. He said at the time that the Governor’s office ordered him to step down. The full state Senate must approve the appointments. At this week’s hearing, both appointees received wide support from environmental groups and some industries.

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