GLENDALE — Utility officials expressed relief Monday after the governor vetoed legislation that would have mandated that utilities use in-state resources to cut emissions 33% by 2020.
In September, state legislators passed a pair of bills that would require renewable energy — such as solar, wind and geothermal energy — to make up a third of a city’s power portfolio by 2020. The bills did not count new out-of-state contracts toward meeting that requirement, frustrating utilities like those in Glendale and Burbank that have tied their renewable energy procurements to outside projects.
“It’s too bad that we couldn’t get the legislation that would have allowed us to be much more flexible in bringing in renewable energy from out of state . . .” said Glendale Water & Power General Manager Glenn Steiger. “These bills, for the most part, were way too restrictive.”
On Sunday, Gov. Schwarzenegger vetoed the bills, which he said would restrict natural competition and drive increased consumer costs.
“California needs a regional approach that provides streamlined regulatory processes and compliance flexibility that facilitate the timely construction of in-state resources,” Schwarzenegger said in his veto message. “This legislative package does the opposite — adds new regulatory hurdles to permitting renewable resources in the state, at the same time limiting the importation of cost-effective renewable energy from other states in the West.”
Assemblyman Paul Krekorian, who sponsored one of the bills, attacked the veto Monday as blocking progress.
“The governor has set us back immeasurably in our progress toward liberating California from its dangerous dependence on fossil fuels,” he said in a statement.
The veto had been expected since last month when the governor announced his intentions and issued an executive order directing the state’s Air Resources Board to draft regulations to implement the 33% benchmark without the in-state requirement.
But Krekorian countered that without comprehensive legislation, the mandate would remain hollow. “The governor’s recent executive orders are wholly inadequate to achieve these goals without legislative solutions,” he said in the statement.
Glendale and Burbank officials did not oppose the 33% benchmark, which both utilities have already pledged to meet, but in September they joined more than 60 utilities across California in opposing the in-state requirement proposed in the legislation.
While supporters said the focus on in-state energy sources would lead to the creation of “green” jobs throughout the state, utilities countered that it would require a massive infrastructural investment — which could mean a massive consumer rate spike.
“We want to and already plan to do over 33%, but this issue of limiting them to only in-state is simply impractical,” said Burbank Water and Power General Manager Ron Davis. “It’s not that it’s a bad idea, but siting and building facilities within the state would have slowed us down in hitting 33% and would have added tremendous cost to the consumers.”
In September, Glendale Water & Power legislative analyst Lana Haddad predicted a consumer rate increase of at least 30% if the legislation went into effect. Glendale Water & Power currently gets about 23% of its energy from renewable sources, while Burbank Water and Power expects to hit 20% by early 2011. Both utilities use several out-of-state contracts.
Krekorian emphasized existing contracts could be grandfathered in, but utility officials countered that once those initial contracts expired, utilities could be left scrambling to find new sources in-state.
“The biggest single issue is a lack of available transmission within the state to get renewable energy from where it’s available to where it’s being used,” Steiger said. “As it looks right now, in order to get that kind of transmission built, we would have had to accelerate our efforts and get a significant amount of transmission built by 2020.”