Policy: Environment & Energy

California renewable energy mandate boosts consumer costs, fuels litigation

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Op-Eds,California,Analysis,Energy and Environment

Despite the national rise in low-cost natural gas production, renewable energy remains the rage in 36 states. California leads by implementing a 2011 law, signed by Gov. Jerry Brown.

The law mandates that 33 percent of the state’s electricity must come from “renewable” sources by 2020. That means geothermal, biomass, solar and wind production.

The state likely will make the 33 percent quota, according to Robert Michaels, an energy economist with the California State University, Fullerton, who has testified before Congress. “But it's going to be messy,” he said.

According to Anthony Earley, CEO of Pacific Gas & Electric, the state’s largest utility, the mandate will boost consumers’ bills by from 1 percent to 1.5 percent.

Implementation is complicated by state and national issues. Michaels pointed to a lawsuit in U.S. District Court in Colorado over that state’s 30-percent renewable mandate by 2020.

In April, the court ruled against Colorado laws that favored in-state producers. The lawsuit, brought by the American Tradition Institute, contended that the commerce clause of the U.S. Constitution required free trade in renewable energy among the 50 states.

A similar decision was handed down in June by the Seventh Circuit U.S. Court of Appeals in Chicago. KCET.org reported the ruling “may force California to buy renewable energy from out of state whether it wants to or not, potentially spurring energy development in the desert areas east of the California state line.”

Judge Richard Posner wrote in the court ruling, “Michigan cannot, without violating the commerce clause of Article I of the Constitution, discriminate against out-of-state renewable energy.”

Currently, 27 percent of renewable generation used in California comes from other states. The court rulings indicate that proportion likely will not be reduced.

Another consideration is environmentalists vs. environmentalists. Although environmentalists generally favor advancing renewable energy, doing so creates its own environmental hazards.

The most visible hazard is wind power killing birds that fly into the giant propellers. The American Bird Conservancy maintains it “supports wind power when it is bird-smart, and believes that birds and wind power can co-exist if the wind industry is held to mandatory standards that protect birds.”

Another major threat to renewable expansion is the opposition of homeowners who live next to the construction of new power lines. About two-thirds of California renewables come from the steady power sources of geothermal and biomass.

But the problem stems from the one-third of power sources, wind and solar, that are intermittent. For these sources, dual power lines must be built: one line for the intermittent renewables; and a second line for traditional power sources, such as natural gas and coal, that must be turned on when the sun doesn’t shine or the wind doesn’t blow.

This problem shocked Southern California Edison in July when homeowners in Chino Hills, a bedroom community northeast of Los Angeles, successfully halted giant, 200-foot electrical towers from being erected near their homes. The lines would have brought power from SCE’s Tehachapi Renewable Transmission Project, but now will be diverted.

SCE announced the diversion “sets a cost-cap of $224 million of extra costs to be borne by all customers.” SCE investors will be let off the company’s mistake.

The Tehachapi Wind Energy Storage Project is another SCE renewables project. The total is budgeted to be $55 million, of which nearly half, $25 million, will come from U.S. taxpayers as part of President Obama's 2009 stimulus package.

So all Americans will be paying for the project even if they don’t go to Disneyland.

John Seiler is managing editor of CalWatchDog.com.
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