Renewable energy at what price?

By CMTA Staff

Capitol Update, Sept. 4, 2009 Share this on FacebookTweet thisEmail this to a friend

Two competing but similar Renewable Portfolio Standard bills are poised to move out of the Legislature to the Governor’s desk.  As currently drafted, AB 64, Paul Krekorian, (D-Burbank), and SB 14, Joe Simitian (D-Palo Alto), would be excessively and unnecessarily expensive for ratepayers, and would actually hurt the state’s efforts to achieve the state’s AB 32 goals.  

CMTA has consistently maintained that poor implementation of the State’s 33 percent RPS goals will exacerbate California’s industrial electricity rate differential with other states (80 percent higher than our neighbors and 45 percent higher than the national average). A recent CPUC Energy Division Report on the cost of implementing a 33 percent RPS goal supports CMTA’s claim.  According to the report, a best-case scenario would require a 7 percent annual premium in electric rates over an already high baseline estimate, and a much larger premium is likely if state policies limit access to the most cost-effective renewables throughout the western states.  

A prime example of SB 14 and AB 64’s costly effects is a provision that allows the sum cost of renewable generation to exceed the then current Market Price Referent prices by between $1.3 billion and $1.6 billion for the three privately-owned electric utilities.  This is one of many reasons the RPS legislation as written must be vetoed if it gets to the Governor’s desk.

CARB and other agencies should be encouraged to pursue a 33 percent RPS policy under existing authority in a manner that is cost-effective, technologically feasible and designed to assure that barriers to meeting the goal are surmounted.  

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