Renewables Shortfall Prompts Calls for Reform

By Published On: July 7, 2008

The shrinking percentage of green power is driving the reform of the state’s renewables portfolio standard, particularly since it became a cornerstone of California’s draft climate change plan late last month. While the California Energy Commission discusses replacing the existing green power procurement process with a feed-in tariff for renewable energy, Governor Arnold Schwarzenegger and lawmakers are discussing possible changes to the renewables law to promote online alternative energy supplies, sources say. “Investor-owned utilities as a group have made backwards progress,” said Ryan Wiser, a Lawrence Berkeley Laboratory scientist who specializes in energy markets and policy. “It certainly is discouraging,” Utilities and state regulators treat renewable energy like “a green salad on the greasy burger plate. It needs to become the main course,” said V. John White, Center for Energy Efficiency and Renewable Technology executive director. White advocates that the state drop the market price referent as a criterion for utility green power contracts. The referent, he said, has been based on artificially low projections of future natural gas prices. Even though the referent is artificially low, utilities can use it to disqualify renewable energy suppliers from contracts based on price. White also suggested that utilities be required to make multi-year commitments to green power in place of the annual request for offers process they have followed since the renewable energy law was enacted in 2002. He also suggested that the state shift ultimate enforcement of the renewable energy requirement, set at 33 percent in the draft climate change plan, to the California Air Resources Board. Under such a change, utilities might be required to file plans with the Air Board for reaching the 33 percent target, as well as milestones along the way. The Air Board would have to approve those plans and then would be able to fine utilities if they missed milestones. “Far more aggressive action on all fronts will be required going forward if 33 percent [renewable energy] becomes the state’s objective,” said Wiser. Schwarzenegger has endorsed the 33 percent renewable energy target, which would be mandated under pending legislation expected to pass.

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