Maybe this is finally the year

The California Air Resources Board’s second-ever auction was yesterday, and while full results will not be released until Friday of this week, we do know that the minimum bid price was raised from $10 in the first auction to $10.71. The Air Resources Board this week and next will be holding workshops around the state to discuss its draft plan to place the proceeds of the cap and trade auctions. The ARB’s “Cap-and-Trade Auction Proceeds Investment Plan Draft Concept Paper ” was released February 15 th , and the ARB is accepting comments up until March 8 th . After some public outreach, the Department of Finance (DOF) will submit the Investment Plan to the Legislature along with the May Revision to the Governor’s Budget. The Legislature will then decide which of the recommended appropriations to various state departments will be enacted, with the Governor’s concurrence and signature. The investment plan must identify near-term and long-term greenhouse gas emission reduction goals and targets; analyze gaps in current state strategies for meeting greenhouse gas reduction goals; and identify priority investments that facilitate greenhouse gas reductions. Eligible investments include: “Reduce GHG emissions through energy efficiency, clean and renewable energy generation, distributed renewable energy generation, transmission and storage, and other related actions, including, but not limited to, at public universities, state and local public buildings, and industrial and manufacturing facilities.” Revenues from the program are not guaranteed, as they depend on many factors, most notably price and volume. The first auction netted $285 million. The funds will be distributed to a variety of categories according to a set of principles. While distributed generation is a specified category, a well-presented case by the industry would likely increase the size and longevity of the distribution. The draft Concept Paper is a highly-recommended 22-page addition to your reading list. Meanwhile, Proposition 39 funds are in the process of being appropriated for various purposes. We reported previously in these pages on the DOF-proposed methods to use the funds, some $450 million each of the next 5 years. We also reported in that same article that the non-partisan and well-respected Legislative Analyst’s Office (LAO) has “serious concerns with the Governor’s Proposition 39 proposal” citing DOF’s proposal to shift the funds to schools, displacing other funds, and thereby helping balance the budget. DOF’s job is to present a balanced budget. The problem is that this conflicts with several parts of the new law enacted by Proposition 39, according to the LAO. It is interesting, then, that the Legislature has constrained this tendency in the DOF by requiring them to present to the Legislature this “Cap-and-Trade Auction Proceeds Investment Plan” written in conjunction with the ARB. Several items in the news and other recent developments indicate that this year is shaping up to be a distracting one for the energy industry generally, from which DG interests may benefit. To wit: Decades-long battles with utilities over power purchase agreements are in the process of settlement ; Interconnection issues, which also have been a long-running battle with utilities, are at least becoming more of a known quantity, with the development of “ cost certainty proposals .” We also note the announcement by the Energy Commission of the formation of the Smart Inverter Working Group. Perhaps technology can solve what political interaction has struggled with for decades. The PUC’s decision on long-term procurement planning finally enforces California’s well-meaning but often-compromised “Loading Order.” It will force SCE to procure between 200 – 1400 MW of energy efficiency, demand response, distributed generation including combined heat and power, and stunningly, at least 50MW of energy storage. Fracking has come to California , and several bills have been introduced to deal with some aspect of it, and there is some regulatory activity under existing law. This not only will involve large segments of the energy industry, but will involve the energy industry in California’s longest-running political feud, the water wars, escalating the number and type of combatants on the field. The Investor-owned utilities will have their hands full and their political budgets committed as an initiative measure has been cleared for signature-gathering that would submit to a vote of the people the idea of abolishing IOUs entirely, replacing them with a publicly owned California Electrical Utility District. The Energy Commission just adopted its 2012 Integrated Energy Policy Report Update . If you wrote this document yourself to favor renewables and onsite generation, you would be hard pressed to do a better job. This combined with aggressive clean energy policies in place in the Governor’s Office, the PUC, the ARB, existing statutes and the Legislature, makes for a very favorable clean energy business climate. So with the nose of the camel under the tent, a feast prepared, and the Sheik out of the tent fighting other battles, why shouldn't the camel partake of the feast? Maybe this is the year.

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Maybe this is finally the year

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