Thursday, October 16, 2008
Pro: Prop. 7 Is a Serious Tool for Producing Much-Needed Renewable Energy
by Tam Hunt, energy program director and attorney for the Community Environmental council in Santa Barbara and lecturer in renewable energy law and policy at the Bren School of Environmental Science and Management at UCSB.
Say what you will of Al Gore, he does have a vision. On July 17, he called for the nation to embark on a man-on-the-moon effort to achieve 100 percent "renewable and other truly clean carbon-free" electricity in just 10 years. He's right: The global and domestic energy situation requires that we act with a seriousness of purpose and focus exceeding the efforts behind the moon landing.
My organization set a very ambitious goal of its own five years ago: to wean our region from all types of fossil fuels (not just fossil-fueled electricity, as with Gore's vision) by 2033 or sooner. Weaning ourselves from fossil fuels will require a lot more electricity than we currently use, because of electric cars and plug-in hybrid electric cars.
This is why we need serious tools for achieving higher levels of renewable electricity in our region. Proposition 7, the Solar and Clean Energy Act, will require all the state's utilities-public and private-to achieve 50 percent renewables by 2025. Prop. 7 is not a meaningless mandate. It contains a number of tools for achieving much higher levels of renewables, following a "big carrot" approach more than a "big stick" approach, including:
• A feed-in tariff that promises to be highly effective because it is similar to a law in effect during the '80s and '90s that resulted in almost all the renewable energy we have up and running in California today. (Very little has been added in the last decade).
• A major change in how the "market price" is calculated. This is a very important benchmark set by state agencies. Prop. 7 requires that the state consider the "value and benefits of renewable resources," something that is explicitly not allowed in the current California Public Utilities process.
• A 10 percent boost for renewable energy contracts, above the market price. With the revised market price process, and this 10 percent boost, many more renewable energy projects should be viable.
There are many other carrots, but these are the highlights.
Prop. 7 also increases the penalties that may be assessed against utilities by eliminating the current $25 million cap imposed by the CPUC. Prop. 7 reduces the cents/kilowatt hour penalty, but by eliminating the cap, the actual effect is to increase penalties in almost all scenarios.
Some opponents have also pointed to a potential exclusion for small energy projects in Prop. 7. This argument is simply wrong. Prop. 7 doesn't change current law on this issue. Any project may compete for contracts. The confusion has arisen over Prop. 7's expedited permitting process for renewable energy projects and transmission lines. This expedited process only applies to projects 30 megawatts and up.
By the way, my organization has not received any compensation from the Prop. 7 campaign, nor will we accept any compensation. Our advocacy work is independent.
Con: Seriously Flawed Initiative Would Cripple Renewable Energy Production
by Cliff Chen, a senior analyst in the Union of Concerned Scientists' Clean Energy Program.
Prop. 7 is the Solar and Clean Energy Initiative in name only. Supporters mean well, but this seriously flawed initiative would hinder renewable energy development in California. The Union of Concerned Scientists (UCS) and dozens of environmental, labor, consumer, and clean energy trade organizations urge voters to reject it. Even renewable energy companies, which have the most to gain from a well-designed initiative, oppose Prop. 7.
Decades of experience have taught UCS the formula for a successful energy policy, as well as the recipe for disaster. It is one thing to set lofty goals for renewable energy. It is quite another to get the policy details right so that those goals can be achieved. Unfortunately, Prop. 7 fails to do so.
• Prop. 7 would create loopholes that release utilities from their renewable energy obligations, including one that merely allows them to show a "good faith effort" to meet their targets. This "good faith" language is especially problematic because it would allow utilities to comply by merely signing a contract, whether or not they actually were using renewable energy sources. The California legislature rejected similar loopholes in the existing statute because there are susceptible to utility manipulation. If the loopholes become law, it would be virtually impossible to meet Prop. 7 targets.
• The initiative would add tremendous complexity and uncertainty to the process for siting new transmission lines, and at the same time arbitrarily shorten the permitting schedule. Rather than expedite renewable energy project construction, that likely would prompt costly litigation and inevitably result in delays.
• Prop. 7 would establish inflexible cost caps on each renewable contract, which would not apply to electricity generated by fossil fuels. This restrictive policy would especially hamper large solar projects.
• Finally, Prop. 7 would discourage small-scale solar projects. Given the faulty way the initiative is worded, it would likely shut out of the market solar projects that generate less than 30 megawatts-which amounts to 60 percent of the projects currently under contract. Solar energy companies and other small producers are opposing Prop. 7 for this very reason.
Prop. 7's considerable flaws doom it to fall far short of its overly ambitious goal of generating 50 percent of California's electricity from renewable sources by 2025. Moreover, it would require a two-thirds majority in the legislature to amend the law, making it next to impossible to fix. Californians would be saddled with this onerous policy for years to come.
Fortunately, there is a better alternative. The legislature and the environmental community are currently working on a bill that would set an aggressive 33 percent renewable energy requirement by 2020 while strengthening and improving the existing statute.
Instead of an exciting target with fatal flaws, we need an aggressive and responsible policy that lays the groundwork for genuinely achieving 50 percent renewables and beyond. A pro-renewables vote is a "No" vote on Prop. 7.