Legislature ponders raising state’s share of renewable energy to 50%, cutting oil use 

Source: Debra Kahn, E&E reporter • Posted: Thursday, April 9, 2015

A major legislative push to raise California’s share of renewable energy to 50 percent by 2030 had its first hearing before a panel of largely receptive lawmakers yesterday.

The Senate Energy, Utilities and Communications Committee took up Senate President Pro Tem Kevin De León’s (D) S.B. 350, which would implement Gov. Jerry Brown’s (D) inaugural January pledge to boost renewables, lower petroleum use by half and double energy efficiency in buildings (ClimateWire, Jan. 21).

Billionaire political activist Tom Steyer was on hand to lend support, although De León appeared confident he wouldn’t need it. De León swept into the hearing, exhorting the committee members to “Smile, enjoy life!”

“Is that a way to solicit votes?” asked committee Chairman Ben Hueso (D).

“I don’t think I have to do that, Mr. Chair,” De León replied.

The bill is largely modeled after the state’s existing renewable portfolio standard, set at 33 percent of retail electricity sales by 2020. It would apply to investor- and public-owned utilities, as well as municipal electricity purchasing programs, and would establish interim targets up until 2030: Utilities would have to reach 40 percent renewables by 2024, and 45 percent by 2027.

It also establishes quotas for electricity that actually enters the state’s grid in real time, as opposed to being purchased in the form of renewable energy credits, which represent electricity generated elsewhere.

A wide swath of the state’s labor unions and renewables industry lined up to praise the bill, as did members of environmental and public health groups. Steyer, a bankroller of past political campaigns to advance the state’s climate policies, said the bill would create jobs and would cement California’s position as a leader on climate.

In 2010, Steyer led a campaign against a ballot initiative to overturn the state’s 2006 climate law, A.B. 32, and in 2012, he spent $32 million on a ballot initiative to reshape the state’s tax code to send more corporate tax revenues to energy efficiency improvements (E&E Daily, Jan. 21).

“It is always difficult to imagine a better future. That’s the dangerous lure of inertia,” he said. “S.B. 350 is our opportunity to do it again.” The bill would “dramatically reshape the state’s economy,” he said.

A staffer for Steyer’s political action committee, NextGen Climate, said he appeared at the hearing at De León’s request.

Utilities want more flexibility

The state’s major utilities stopped short of taking a position on the bill but proposed that they be allowed to meet a 2030 emissions target in whatever way they saw fit, rather than complying with specific electricity procurement guidelines. That could include energy efficiency, electric vehicles and hydrogen-fueled vehicles, in addition to renewable energy, they said.

“We want to be empowered to choose the best way to reduce greenhouse gases,” said Fong Wan, senior vice president of energy procurement for Pacific Gas and Electric Co. “Mandated programs, in our opinion, do not foster innovation.” The target for 2030 should be 300 million tons of carbon dioxide statewide, he said, in line with an existing executive order setting a 2050 target of 80 percent below 1990 levels, which would equate to 100 million tons.

The bill also contains language mandating a 50 percent reduction in the transportation sector’s petroleum use and a doubling of efficiency in existing buildings, all by 2030.

Those sections are less specific. The petroleum language instructs the state Air Resources Board to adopt cost-effective and technologically feasible regulations to reduce the use of petroleum in motor vehicles by half by 2030, but it does not specify a base-line level of use. It would apply to light-, medium- and heavy-duty cars and trucks; off-road vehicles; construction and farm equipment; locomotives; portable fuel containers and spouts; and, where not pre-empted by federal law, marine vessels.

Industry representatives lined up to register their opposition to the bill, particularly the petroleum section, which they criticized for lacking detail.

Oil companies want regulatory specifics

“Add some specifics so the public can meaningfully engage,” said Eloy Garcia, a lobbyist for the Western States Petroleum Association, which includes BP, Chevron Corp., Exxon Mobil Corp. and Shell as members. “They can’t engage if you’re just kicking it over to the air board to make decisions.”

The efficiency language directs the Energy Commission by January 2017 and every three years thereafter to adopt policies to double the efficiency of residential and nonresidential buildings by 2030. It instructs the agency to consider a wide range of policies, including “a broad range of energy assessments, building benchmarking, energy rating, cost-effective energy efficiency improvements, public and private sector energy efficiency financing options, public outreach and education efforts, and green workforce training.”

The bill passed the committee on a party-line vote of 8-3 and will be heard next in the Senate Environmental Quality Committee later this month.

The committee also advanced two other bills to the Senate Environmental Quality Committee on a party-line vote. S.B. 180, by state Sen. Hannah-Beth Jackson (D), would direct state electricity agencies to set a maximum emissions limit for all power plants that supply the state’s grid. It would replace the current limit, which applies only to baseload power plants, with two standards that are tailored to “peaking” and “nonpeaking” plants. The bill was opposed by utilities, power plant owners and business groups and supported by environmentalists.

S.B. 687, by state Sen. Ben Allen (D), would establish a greenhouse emissions standard for natural gas suppliers. Similar to the state’s existing low-carbon fuel standard for transportation fuels, it would set targets for reductions in carbon intensity every three years through 2030, at which point renewable gas would make up 10 percent of in-state retail natural gas use. It is intended to spur development of a market for biogas from sources like landfills, dairies and wastewater treatment facilities.

Utilities and industry groups opposed the bill, saying it could raise prices for natural gas and would not be guaranteed to produce enough supplies to meet the targets. Committee members were also skeptical, instructing Allen to bring it back before the committee later this spring.