It seems easy enough. Proposition 7 (The Solar and Clean Energy Act of 2008) would require all utility companies to have 40 percent renewable resources (such as solar, wind or geothermal) by 2020, and 50 percent by 2025.Thus, anyone with the least bit of concern for the environment would obviously vote “yes” for California’s renewable energy statute”“right?
At least that’s what Proposition 7’s proponents, such as Arizona billionaire Peter Sperling and former San Francisco Supervisor Jim Gonzalez, would like you to believe.
But a coalition of environmental groups and solar and wind companies currently oppose Proposition 7. They said it will ultimately hinder renewable electricity production in the long term.
The measure will economically hurt smaller clean-energy companies, increase the price of renewable energy, and complicate the system of power lines throughout California.
Utility companies such as Pacific Gas & Electric Corporation, Edison International and Sempra Energy have donated $28 million against Proposition 7.
In essence, Proposition 7 will generate the opposite effect of its original purpose.
While the initial intention of Sperling and Gonzalez ““ who have financially backed Proposition 7 with $7.4 million ““ is commendable, the statute’s fine print and confusing wording shed light on the complications involved with creating effective energy legislation.
Proposition 7 was drafted by a team of lawyers, but with the existence of current flaws and loopholes in the measure, it is clear that successful renewable energy legislation requires a complex formula of environmentalists, economists and utility companies.
For one thing, this measure benefits large renewable-power plants by awarding them with “green credit,” or points that add up toward the renewable energy sums for 2020 and 2025. But the smallest clean-energy producers are hurt by this system, since Proposition 7 outlines that clean-energy producers who rake in energy under 30 megawatts would not be counted in the state’s overall percentage goals. This would discourage utilities from purchasing power from smaller-production facilities, and ultimately drive them out of business.
This will have a particularly negative impact on the solar industry.
Mini solar generators, such as those used in Coachella Valley, don’t require big transmission-line construction, work the best during hot times and peak air-conditioning use, and function the most effectively at the local level.
While supporters of the measure have argued that the intent was not to shut out small alternative energy companies, the Sacramento Superior Court concluded on Aug. 7 that both interpretations of the statute are plausible.
In addition, Proposition 7’s green credit system and renewable power goals for 2020 and 2025 will hurt public utility companies, such as the Los Angeles Department of Water & Power.
Currently, there is a California law (SB 702) that requires private utilities to generate 20 percent of their electricity from clean and renewable sources by 2010. Proposition 7 aims to extend that provision to public utilities.
Yet, LADWP currently generates 8.5 percent of its power supply from renewable resources, such as hydropower.But under Proposition 7, utility companies like LADWP would not get green credit for this power source, nor would they receive any green credit for future investments in hydroelectricity.
There are further negative consequences to Proposition 7.
Consumer advocates argue that the measure does not place a price cap on utility bills, so power companies will have to purchase renewable energy at 10 percent above the market price.
But perhaps the biggest obstacle that faces Proposition 7 is the issue over power lines, which are essential to transport solar and wind power that is generated in the desert regions to coastal cities.
The initiative would shift authority over transmission lines from Public Utilities Commission to the California Energy Commission. This act alone would ignite fights over litigation and jurisdiction.
Overall, it’s clear that the original purpose of Proposition 7 was a noble one. But without the right team to draft the measure, important environmental and economic issues can be lost in the legislative shuffle.
While voters may initially want to support Proposition 7 with the valid intention to aid California’s vulnerable energy crisis, it is important to read the fine print and realize that this measure has fallen short of our environmental expectations.
E-mail Chung at lchung@media.ucla.edu. Send general comments to viewpoint@media.ucla.edu.