While there are no hard estimates, an early analysis presented to state energy policymakers last Tuesday indicates the costs to California’s retail energy utility customers will increase up to 30% to pay for stepped up renewable and energy efficiency programs enabling the state to meet its highly touted goal of reducing its overall greenhouse gas (GHG) emissions to 1990 levels by 2010.
Two unanswered questions regarding the climate change initiative as it impacts the electric and natural gas utilities are (a) the quantity of emissions reductions available at what cost, and (b) if there are other sizable reductions from energy efficiency and renewable programs beyond California’s current goals.
Julie Fitch, the strategic planning director at the California Public Utilities Commission (CPUC), presented the overview with the next major milestone being in August when final recommendations from the CPUC will be due to the California Air Resources Board, which has overall responsibility for implementing the state global climate change law (AB 32).
Fitch got a lot of attention from two veteran state energy officials — CPUC President Michael Peevey and California Energy Commission member John Geesman — on the overall estimate of a 30% hike in energy utility rates over the next 12 to 13 years.
However, when looking backward to the early 1990s rates overall during increased much more than 30%, according to Peevey and Geesman.
The good news Fitch relayed was that the analyses so far indicate that the utility energy sector can get back to 1990 GHG emission levels through the stepped up energy efficiency programs and 33% renewable target for electricity supplies by 2020. But the tougher question at this point is exactly how much more is it going to cost and who is going to pay for it.
“It will not be free,” Fitch assured the state officials.
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