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California Governor Signs 33% Renewable Bill for 2020

A goal of having 33% of the state's electricity come from renewable resources by 2020 was formally codified into California law by Gov. Jerry Brown Tuesday while he helped open a new solar equipment manufacturing site in the East San Francisco Bay area by Sun Power.

Late in March the lower house Assembly passed the measure (SB 2X) by a 59-19 margin (see Daily GPI, March 31), sending it to the new governor for his consideration. The signing makes the nation-leading 33% renewable portfolio standard (RPS) goal official and takes away the uncertainty of its status for the past two years after being established as a governor's executive order, which does not carry the same legal standing as an act passed by lawmakers and ratified by the governor.

In signing the bill, Brown acknowledged that he sees 33% as a "floor, not a ceiling," and that a 40% goal is probably doable in a reasonable time frame. He also said there are some problems with SB 2X's language that will cause implementation problems, so he is urging the legislature to immediately begin to work on added clean-up legislation.

"This bill will bring many important benefits to California, including stimulating investment in green technologies in the state, creating tens of thousands of new jobs, improving local air quality, promoting energy independence, and reducing greenhouse gas emissions," said Brown in his signing message.

California's top regulator, Michael Peevey, president of the California Public Utilities Commission, said the new state law will decrease the state's use of fossil fueled generation and improve the environment. Peevey pledged to work with the state legislature to make what he called "refinements" to make it a smoother path to achieving the 33% goal.

"We will continue to oversee the work of the state's utilities to ensure that they achieve our groundbreaking renewable energy goal," Peevey said.

Since its passage March 30, at least one major energy utility, San Francisco-based Pacific Gas and Electric Co. (PG&E), remained opposed to the measure, but it did not urge a veto from Brown. The utility pledged to work on clean-up legislation to address what it called "multiple concerns [about SB 2X] related to customer costs, the transition to the new program, and uncertainty concerning banking rules [for renewable buying above the goals]."

A clean energy/environmental lobbying group in Sacramento, Environment California, hailed Brown's signing as "taking a giant step forward down the path toward repowering California with clean, renewable energy." The group's chief Sacramento lobbyist, Bernadette Del Chiaro, called the new law "a huge victory for anyone who cares about clean air and energy independence."

Southern California Edison Co. (SCE) said the governor's action "significantly revises" the state's renewable program and goals. SCE noted that in 2010 it broke its own previous record for renewable project deliverability, signing 58 new contracts totaling 852 MW of renewable-based power supplies.

In Northern California, PG&E announced that Oakland, CA-based BrightSource Energy closed the financing needed to complete its three-phase Ivanpah solar thermal project in the Southern California desert region near the Nevada border and the interstate highway going to Las Vegas. PG&E was the first utility to sign a long-term contract with BrightSource for the project's output back in 2008.

Earlier this month PG&E officials told the governor SB 2X could have "many unintended consequences," such as creating a "seller's market" for renewable power supplies that could create undue costs for California's retail power customers. PG&E thinks the state's new law needs to be modified to incorporate "lessons learned from the past" in regard to transitioning to the higher goal.

Similar measures passed two years ago in the legislature but were vetoed by then-Gov. Arnold Schwarzenegger, who considered them counterproductive for establishing provisions for hitting the renewable target that would be what some of the major utilities at the time thought were "overly restrictive and too costly" (see Daily GPI, Nov. 10, 2009). In addition, the measures that were vetoed by Schwarzenegger in favor of a second executive order were considered too risky to grid reliability longer term, he said.

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