California Lawmakers Adopt Landmark Renewable Energy Plan
By Cassandra Sweet, Of DOW JONES NEWSWIRES
SAN FRANCISCO -(Dow Jones)- California lawmakers approved one of the world's
most aggressive renewable-energy mandates early Saturday in legislation that
would require the state's utilities to use renewable sources like the sun and
wind to generate a third of the power they sell by 2020.
The proposal is a centerpiece of the state's 2006 plan to combat climate
change, which has broad public support. And although it's more aggressive than a
similar federal proposal pending in Congress, the legislation could influence
decisions in Washington.
The legislation, in two bills passed by the legislature, will require approval
from California Gov. Arnold Schwarzenegger, who has been a vocal advocate for
the 33% renewable energy mandate. However, as Schwarzenegger has been under
intense lobbying pressure by some power-plant developers to veto the
legislation, raising questions about how he will react.
A spokesman for the governor said Schwarzenegger hadn't yet taken a position
on the bills and wouldn't do so until they landed on his desk.
The plan has been mired in a dispute over the extent to which utilities should
be able to buy renewable power generated in remote areas of states like Montana
and Wyoming - power they're unable to use because it's generated too far away to
be delivered. One of the bills, from the state Senate, limits such contracts.
California's investor-owned utilities currently are required to use renewable
sources for 20% of the power they sell by 2010, with no restriction on long-
distance renewable energy contracts.
The "deliverability" issue, or the extent to which utilities must buy
renewable energy that can be delivered to California, has divided utilities and
renewable energy developers. Utilities owned by PG&E Corp. (PCG) and Sempra
Energy (SRE), and the Los Angeles Department of Water & Power - the nation's
largest municipal utility - supported the legislation, while Edison
International's (EIX) Southern California Edison unit and some municipal
utilities opposed it. U.S. solar power developers Sunpower Corp. (SPWRA), First
Solar Inc. (FSLR), BrightSource Energy Inc. and eSolar supported the bills, as
did wind power developers including Clipper Windpower (CWP) and Acciona (ANA.MC)
of Spain. But Spanish wind-farm powerhouse Iberdrola Renovables (IBR.MC), which
recently received nearly $300 million in U.S. Treasury Department grants for
four U.S. wind farms, opposed the legislation, as did Calpine Corp. (CPN), the
largest U.S. geothermal power developer and one of the nation's largest sellers
of natural gas-fired power.
A trade group that represents Iberdrola and Calpine, as well as several
developers of conventional natural gas-fired power plants, asked Schwarzenegger
to veto the Senate renewable energy bill over concerns that the restrictions on
the types of energy purchases utilities are allowed to make will lead to huge
costs and will disadvantage developers of renewable energy projects in remote
areas.
"A number of our members have contracts for out-of-state renewables...and
stand to gain as much or more than anybody else from a 33%" mandate, said Jan
Smutny-Jones, executive director of the Independent Energy Producers
Association, the industry group that asked for the governor's veto. "But the
bill, in its current form, is a big problem."
But other groups that represent renewable energy developers, utilities,
consumers and environmentalists say the state needs to move forward with its
renewable energy plans and that the legislation passed Friday is a good start.
"We have an incredibly vibrant market, although we're waiting for
transmission, we're waiting for people to get their permits," said Nancy Rader,
executive director of the California Wind Energy Association, which supported
the bills and whose members include Acciona and Clipper Windpower. "To veto this
bill would bring that process to a grinding halt and set back our renewable
energy goals by years."
Rader said companies that supported the bill generally already have a foothold
in California's renewable energy market, while companies that opposed it "are
not so well positioned and are trying to kill the market for everyone else."
-By Cassandra Sweet, Dow Jones Newswires; 415-439-6468; cassandra.sweet@
dowjones.com
(END) Dow Jones Newswires
09-12-091310ET
Copyright (c) 2009 Dow Jones & Company, Inc.
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