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Environmental

California's Governor threatens to veto alternative energy legislation; alleges he can enact via executive order

Both the California Assembly and the Senate have passed AB 64 [http://www.leginfo.ca.gov/pub/09-10/bill/asm/ab_0051-0100/ab_64_bill_20090921_enrolled.html] and SB 14 [http://www.leginfo.ca.gov/pub/09-10/bill/sen/sb_0001-0050/sb_14_bill_20090915_enrolled.html]. Both bills increase the percentage of California’s electricity that must be generated by renewable sources. The Governor threatens the veto the bills despite sharing the basic goal of the legislation to raise the so-called Renewable Portfolio Standard (RPS) from 20% to 33%. Instead of signing the bills, the Governor vows to implement the 33% goal by issuing an Executive Order that would order the higher RPS, but without burdening the state's utilities with what he considers unreasonable restrictions on their ability to meet the standard through importing power from other states. As has been noted in the media, a number of large-scale solar projects are under consideration for development in the deserts of Nevada and Arizona.
 
The two bills would raise the RPS so that by 2020 the state's retail electric sellers would have to obtain 33% of their supply of power from renewable sources. The bills would also extend the RPS to cover publicly owned utilities; currently, the RPS applies only to investor owned utilities (IOUs), and requires them to meet a 20% RPS by 2010. In addition to establishing the 33% ultimate RPS goal by 2020, the two bills acknowledge the difficulty that the State's IOUs are having in meeting the current 20% standard by moving the date for all retail sellers to meet that goal to 2013.
 
Ironically, the Governor, the utilities, the state's major businesses, and environmental groups all agree with these RPS deadlines. The disagreement is over importation of power from outside the State. The bills limit the percentage of such out-of-state renewable power to 20% of each provider's RPS obligation. The legislators and environmental groups claim that without such a limit the bills would fail to encourage the development of solar, wind, and other renewable power in California and therefore fail to create new green investment and jobs in the state. The business community complains that this limit on out-of-state generation threatens to make it much more difficult and expensive for the utilities to fulfill their RPS obligation. These opponents also argue that the restrictions in the two bills could violate the Interstate Commerce Clause of the U.S. Constitution, and may actually harm California's environment due to the need to site new transmission lines to transport new California-generated power.
 
There is not insignificant legal question whether by executive order the Governor can implement all of the complex changes necessary to effect the RPS changes needed.
 
Stay tuned.