The Color of Money
While interest groups fight it out over Prop. 7, will solar energy be left on ice?
Thursday, October 23, 2008
If elected president in November, Barack Obama pledges to “ensure 10 percent of our electricity comes from renewable sources by 2012, and 25 percent by 2025.” But California, a leader in global warming legislation, has Obama’s target beat: 11 percent of our energy currently comes from renewables, and a state law requires 20 percent by 2010.
Prop. 7 aims to take it further, requiring all electric utilities to buy half their power from renewable sources by 2025. There would be little to no cost to taxpayers; permit fees would cover the estimated $3.4 million in annual administration costs.
Yes on 7 Campaign Chair Jim Gonzalez, who has a political consulting firm in Sacramento, says Prop. 7 would give California’s economy a nice jolt. “If we bring on 10,000 more megawatts of renewable energy in the next 10 years at a reasonable rate, we will create 370,000 construction jobs alone,” he says.
But surprisingly, the big progressive and green groups that should be Prop. 7’s natural allies have come out against it. Sierra Club California, Natural Resources Defense Council, Union of Concerned Scientists, California League of Conservation Voters and Environmental Defense Fund shun the proposition, as do the state’s Democratic, Green, Libertarian and Republican parties, the AFL-CIO and California Solar Energy Industries Association.
The crux of the green opposition is that Prop. 7’s authors are well-intentioned but naïve tycoons who lack a basic understanding of California’s energy regulations.
“What [Prop. 7] is going to do is cause confusion in its interpretation,” says Jim Metropulos, senior advocate for Sierra Club California. “In the growth of solar and renewable and clean power, you’re going to see a hesitation, a stopping point and a stalling. Utilities are gonna sue, and it’ll stall the development of renewables in California until they figure out what is the law.”
THE ENVIRONMENTALIST DEBATE OVER PROP. 7 BOILS DOWN TO FAITH IN SACRAMENTO’S ABILITY TO REDUCE GREENHOUSE GAS EMISSIONS FAST ENOUGH TO MAKE A DIFFERENCE.
The anti-7 campaign’s $27.72 million overshadows pro-7’s $7.35 million, according to campaign finance reports filed with the Secretary of State. But while most of the anti-7 opinion pieces are written by representatives of big enviro groups, three private utility companies are funding the entire opposition campaign. Pacific Gas & Electric contributed $13.90 million; Edison International, $13.72 million and Sempra Energy, $104,000.
Prop. 7 supporters are mostly individuals, including California Democratic Party Vice-Chair Alice Wang, United Farmworkers Union Co-founder Dolores Huerta and Rainforest Action Network Founder Randall Hayes. But like the anti-7 campaign, the pro-7 coffer is filled with contributions from just a few donors. Arizona billionaire Peter Sperling contributed $7.25 million and campaign chair Gonzalez $103,000, accounting for all but $200 of the campaign’s funds.
P rop. 7’s “clean energy” definition includes solar, wind, geothermal, small hydrodams, biomass and tidal power. It’s structured to encourage large-scale renewable projects– think of big solar, wind and geothermal farms in remote locations, and new power lines to transmit the electricity.
Opponents say Prop. 7 would exclude producers of less than 30 megawatts of clean energy from utilities’ renewable portfolios. But Gonzalez says that’s nonsense: It would actually help small renewable energy producers by allowing them to apply for permits through local rather than state government.
Critics complain that Prop. 7 lets utilities off the hook for noncompliance, slashing penalties by 80 percent and leaving loopholes the utilities can exploit. They also worry about the proposed fast-tracking of renewable energy projects, which would shorten the public environmental review process.
But Gonzalez says an expedited siting and permitting process will help renewable projects break ground quickly, and the 20-year contracts required under Prop. 7 would give financial institutions the confidence to invest in them. “We’re trying to remove the barriers to private investment so that the taxpayers don’t have to do this,” Gonzalez says.
U ltimately, the environmentalist debate over Prop. 7 boils down to faith in Sacramento’s ability to reduce greenhouse gas emissions fast enough to make a difference.
Opponents have that faith. They note that assemblymembers and the governor worked together to pass AB 32, which requires private utilities to buy one-fifth of their electricity from renewable sources by 2010. Last session’s SB 411 would have taken it further, requiring one-third renewable sources by 2020. It was derailed, but Metropulos expects similar legislation to be re-introduced in 2009.
Prop. 7 proponents, on the other hand, have had enough of what they see as legislative foot-dragging while global warming reaches a crisis level. “The difference between the [Prop. 7] proponents and the environmentalists,” Gonzalez says, “is that we think we’re in a climate emergency and they don’t.”
Gonzalez is also suspicious of the anti-7 alliance between utilities and big environmental groups. The last time they worked this closely together, he says, was when they vouched for Enron and convinced the state to pass energy legislation that led to the rolling blackouts of 2001. “The cozy relationship between environmentalists and utilities has already hurt California once,” he says. “When they get together on energy policy, watch out.”