Senate energy bill leads CA down wrong road

By Michael Shaw

Capitol Update, April 2, 2015 Share this on FacebookTweet thisEmail this to a friend

On Wednesday, April 8th, the Senate Energy, Utilities and Communications Committee will hear SB 350 by Senate President Pro Tempore Kevin de León that gives blank check authority to the California Air Resources Board (ARB), the California Public Utilities Commission (PUC), and the Energy Commission to adopt a series of goals for dramatically reducing petroleum-based fuel use and increasing renewable energy procurement and building energy efficiency in a short 15 years.

SB 350 requires the three regulatory agencies to adopt and implement undefined policies in pursuit of:

  • 50 percent reduction in the use of petroleum-based fuels;
  • 50 percent of electrical power generation from renewable sources; and
  • 50 percent reduction in energy use by existing buildings.

By imposing a bunch of sector-specific goals, SB 350 takes California further from the well-designed Cap-and-Trade system that most economists believe is the most cost-effective way for California and the world to reduce global GHG emissions. The resulting increase in energy and fuel costs will lead to a leakage of emissions and jobs to other states and nations.

50 percent petroleum reduction would cost jobs and threaten tax revenues for roads: Without a cost-effective and technologically feasible way to achieve this goal, CMTA remains very concerned about the negative effect on jobs and the increasing cost of goods movement for industry. To make a bad situation worse SB 350 also exacerbates California’s existing lack of a sustainable transportation funding system.

Higher renewable energy targets will threaten affordability and reliability: Simply mandating more renewables jeopardizes the affordable, reliable energy upon which California manufacturers depend. First and foremost is the intermittency of most renewable energy sources, including solar and wind, which place their peak generation outside of the times of highest demand. This high degree of intermittency also creates challenges regarding what to do with overgeneration and the need for backup power generation (peaking) when the sun does not shine as much or the wind does not blow as strongly as anticipated.

Energy efficiency targets must account for steps already taken: California manufacturers remain the most efficient in the world. Doing more with less has long been a way to remain competitive in California. However, SB 350 sets another major goal in reducing energy use of existing buildings, but does not provide any detail in how California will get to this goal.

Bottom line: SB 350 threatens California manufacturers with higher energy costs and unreliable supplies. CMTA opposes SB 350.

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