California Renewable Energy Standard to be Set by Regulation, Not by Law

With the solar power array at Rancho Cordova in the background, Governor Schwarzenegger signed an Executive Order directing the California Air Resources Board to adopt regulations increasing California's Renewable Portfolio Standard to 33 percent by 2020 - the highest standard in the nation.

"With this action, we will ensure that California remains the pioneer in clean energy and clean jobs," the governor said, issuing the order.

Last November, Governor Schwarzenegger, a Republican, established the 33 percent RPS with another Executive Order that also streamlined California's renewable energy project approval process.

The governor then called on the Democratically-controlled legislature to pass a measure increasing the state's Renewable Portfolio Standard to meet that target. In May, he sent lawmakers leaders a letter outlining what would need to be included in legislation, most importantly, he said, that it increase the state's renewable energy portfolio standard while protecting ratepayers and creating a healthy market.

From left, Governor Arnold Schwarzenegger, California Secretary for Natural Resources Mike Chrisman, Independent Energy Producers Association Executive Director Jan Smutny-Jones at the executive order signing. (Photo by Justin Short courtesy Office of the Governor)

State lawmakers approved two renewable energy bills early Saturday morning in the last moments of the legislative session.

California Assembly Speaker Karen Bass said then, "After a year of close work and cooperation the California Assembly and Senate passed landmark bipartisan legislation that will ensure one-third of our state's energy comes from clean, renewable sources by 2020. This will help California address the many challenges of global warming, it will make our air healthier to breathe and it will put us at the forefront of the emerging green economy - and the new jobs that will come with it."

Labor unions, consumer advocates and environmental groups supported the bills, but manufacturers and independent energy-generating companies opposed them.

Schwarzenegger said Tuesday that he will veto the Democratic bills, which were supported by some but not all of the state's utilities.

In support of the bills are the Los Angeles Department of Water and Power, Pacific Gas & Electric Co. and Sempra Energy, with its fleet of natural gas and solar power plants. But Southern California Edison Co. and the Sacramento Municipal Utility District prefer the regulatory route and had requested the vetoes.

"Unfortunately, the bills the legislature recently passed are unnecessarily complex, would substantially increase costs on Californians and California's businesses," the governor said.

If those bills are enacted, he said, the state standard could be held up in legal battles because the bills violate the U.S. Constitution's commerce clause by restricting the sale of energy across state lines.

The legislation would have allowed utilities to buy a renewable energy credits from out-of-state energy producers to promote the development of clean power, even if that power would not reach California markets.

But the legislation written by State Senator Joe Simitian limits the use of those credits to foster the creation of green jobs in California.

The governor says utilities should have complete flexibility to buy the credits without limits.

Proponents of the legislative approach favor it because it cannot be as easily overturned by future administrations, but independent energy producers support the regulatory approach.

"Once again, the governor is moving California toward a cleaner, greener, more renewable energy future," said Jan Smutny-Jones, executive director of the Independent Energy Producers Association, representing companies that provide 80 percent of California's renewable energy. "We're proud to be part of this important effort."

The nonprofit advocacy group Environment California urged Schwarzenegger to reconsider his threatened veto. Bernadette Del Chiaro said, "The legislature passed a good renewable energy package with SB 14 and AB 64 that would have made a 33 percent by 2020 renewable electricity standard law. It is for this reason that we urge the governor to reconsider his veto and sign these bills."

In response to the governor's veto threat, Speaker Bass said Tuesday, "We welcome the governor's call to return to the bargaining table. These two issues are critical to the future infrastructure of California but the negotiations can't be my way or the highway. The governor needs to compromise so we can protect our economy and have the resources we need for the future."

Copyright Environment News Service, ENS, 2009. All rights reserved.