PUC Eyes Emissions Limits for Utilities

From Bloomberg News

Edison International, PG&E; Corp. and other suppliers of electricity in California will be required by state regulators to cut greenhouse-gas emissions.

Power companies in the most populous state will face a cap intended to bring emissions down, possibly to 1990 levels, according to a measure approved Thursday by the California Public Utilities Commission.

Gov. Arnold Schwarzenegger said last year that he wanted the state to cut greenhouse-gas emissions to 1990 levels by 2020. The state would be the first to regulate emissions by electricity providers.

“It’s a very positive first step in the right direction,” said Dan Kalb, the California policy coordinator for the Union of Concerned Scientists, which works on environmental issues. “Once we see the details and we combine what the PUC is considering doing with what the state is considering doing, then it could have a positive impact on reducing greenhouse-gas emissions.”


Details on how the emissions caps will be imposed and the level of pollution the electricity companies will be limited to has not been decided, the commission said.

“This decision states our intent to develop a cap on greenhouse-gas emissions,” said Michael Peevey, president of the utilities commission. “It lays the foundation.”

Although Schwarzenegger’s targets are achievable, California has yet to pass any laws that would give the government the tools to enforce the greenhouse-gas emissions goals, Kalb said.

The standards contemplated by the commission will be applied to utilities such as Edison International’s Southern California Edison Co., PG&E;'s Pacific Gas & Electric Co., Sempra Energy’s San Diego Gas & Electric Co. and other companies that supply electricity within the utilities’ service territories.


“We support the concept of what the commission did,” PG&E; spokesman John Nelson said. Curbing emissions will bring benefits to the public health and economy that should outweigh implementation costs, Nelson said.

Utilities owned by governments or local communities aren’t subject to commission regulation and would not face a cap on emissions unless mandated by the state legislature.

The state plans to allocate emissions allowances to the private power suppliers instead of auctioning the allowances and will not immediately set up a system for trading them. The caps will be based on the level of electricity supplied rather than generated.

Nine Eastern states, including New York, also are considering regulating greenhouse gases. Governors of seven of the states agreed last month to create a framework for restricting emissions from power plants -- the second-largest producer of greenhouse-gas emissions in California after automobiles, the commission said.


In other action, the commission approved a settlement requiring PG&E; shareholders to pay $6.5 million to resolve an investigation into a 2003 substation fire that knocked out power to 100,000 customers in San Francisco. Also, SDG&E; won approval to buy $739 million of power over 10 years from a plant being built by Calpine Corp.