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California Lawmakers Weigh Controversial Energy Bill

An effort by utility unions and other stakeholders is under way in the waning days of the California legislature's current session that could mandate an expanded market for geothermal power generation at the expense of existing natural gas-fired and renewable-based generation.

As the state lawmakers begin their last few days of this year's session, which is scheduled to adjourn Aug. 31, a proposal from a San Diego state senator (SB 1139) is attempting to force the state's three major private-sector electric utilities to collectively buy an additional 500 MW of geothermal energy from the Imperial Valley in the far southeast corner of California, which is part of Sen. Ben Hueso's district.

Representatives on both sides of the issue were waiting Thursday for a vote by the full lower house Assembly in the next day or so. From there it would go back to the state Senate for concurrence.

The utilities, renewable energy organizations, state energy officials and a host of other stakeholders are opposing the measure as "unfair and uneconomic," potentially forcing some existing gas-fired and renewable projects to shut down over the next 10 years, the time frame used in the electrical workers union-backed bill.

While the geothermal industry and unions claim that SB 1139 would bring more jobs and cheaper energy supplies, opponents, including the California Public Utilities Commission (CPUC), are calling the proposal "a wolf in sheep's clothing."

"Despite the rhetoric of the authors and sponsors, we don't need the additional power, and if it passed, we will not have the need for a near-equivalent amount of power from existing sources, who as a result will cease operating and lay off potentially thousands of workers throughout the state," said a Sacramento-based lobbyist for one of the major power utilities.

The motivation for the unions is the prospect of creating more federally regulated power projects with larger authorized profit levels that the workers' pension funds can invest in longer term, according to the opponents of SB 1139.

This bill also comes at a time when California already accounts for 80% of the geothermal power produced in the country with more than 3,000 MW supplied to the same utilities mandated to buy more by this proposal.

The CPUC's latest report released on Tuesday said each of the three major utilities is receiving more than 20% of its power supplies from renewable sources -- mostly solar and wind, but including geothermal -- and they are on track to meet the state's 33% requirement by 2020.

Critics of the measure point out that under the state's existing renewable energy policy, geothermal projects can compete against others to win utility contracts through the traditional competitive bidding process. They argue that this is the right way to do business and not have the government mandate an expanded market.

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