State Seeks $2B for Greenhouse Reductions

By Published On: May 2, 2008

State voters are set to be asked this November to approve a $2 billion bond measure to support greenhouse gas reductions and increased energy efficiency measures, under a bill passed 6-2 by the Assembly Natural Resources Committee April 28. The general obligation bond proposed in AB 2003, by Assembly member Lori Saldana (D-San Diego), also includes an annual $130 million dollar tab over 30 years to pay for debt services. The bill, sponsored by a fuel cell company, Bloom Energy, specifically gives $1 billion to the California Energy Commission for power projects that help meet the carbon reduction goals under AB 32–the state’s greenhouse gas reduction law. The other billion dollars would be split. Half would be aimed to fund unidentified entities for energy savings measures in low-income communities. The other $500 million would go to the Department of General Services to increase energy efficiency in state buildings and public schools. Some question whether a three-decade long general obligation bond is the proper mechanism to increase efficiency and curb global warming gases. These types of bonds are traditionally used for long- term infrastructure projects, not for shorter term fuel cell, solar, wind, and geothermal power projects. In addition, the cash-strapped state is already burdened with $43 billion in general obligation bonds, with a debt service per year of $5 billion, according to the committee’s bill analysis. In addition, the governor is planning to seek approval from voters for another $38.3 billion this November and another $9.8 billion during the November 2010 elections. The committee analysis also noted that venture capitalists have invested over $100 million in Bloom Energy. AB 2003 is set to be heard next in the Assembly Appropriations Committee. Other bills on the watch list: AB 1973 takes some authority away from both the governor and the president of the California Public Utilities Commission. By Ira Ruskin (D-Redwood City), the legislation “reduces direct intervention of the governor” in CPUC affairs, according to Assembly staff. It requires Senate confirmation for the CPUC president. It also has the commission as a whole, rather than the CPUC president, directing the commission’s executive director. AB 3058 allows the CPUC to oversee Department of Water Resources’ energy contracts. The department has been trying to get out of the energy business that it was kicked into during the 2000-01 energy crisis. At that time, utilities were unable to pay for power and DWR was put in the position of contracting for electricity. This bill, by the Assembly Utilities & Commerce Committee, aims at decreasing costs of legacy contracts. It passed through Appropriations April 30. The context of AB 3058, according to sources, is that legislators are upset with DWR’s renegotiation of its contract with Calpine. When Calpine was in bankruptcy, DWR kept the contract, but instead of maintaining it as a base-load supply for 1,000 MW, DWR agreed to a dispatchable amendment for 180 MW–basically giving the state control over the Los Esteros plant that feeds into PG&E territory. Legislators, however, are concerned that PG&E ratepayers have to pay more to make up for the difference in supply.

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