Senate passes green energy bill

A measure that would require utilities to receive one-third of their power from renewable energy sources by 2020 passed off the Senate floor Tuesday with the bare minimum of 21 votes.

The bill, SB 14 by Sen. Joe Simitian, D-San Jose, has been tagged as a top priority for Senate leader Darrel Steinberg. The bill’s passage was the first major policy decision in which Steinberg muscled a proposal out of his house, despite reservations from many within his own party.

When Steinberg took the leadership gavel in December, he noted three top legislative priorities that could give the Legislature “a sense of momentum:"  expanding health coverage to all California children, agreeing on a water bond, and expanding the renewable energy requirements for utilities. The health care ambitions have been tempered by the state’s budget crisis, and a water deal remains elusive, Steinberg said Tuesday.

Steinberg acknowledged Tuesday that the renewable plan was far from finished. But, he said, it was the Legislature’s best hope at passing an early, significant policy change.

“It’s more cooked than water,” Steinberg said of the energy plan. “There will be plenty of room to address people’s concerns, but it’s time to show a little sense of urgency,” he said.

But not all Democrats felt it was a good idea to send an unfinished bill onto the Assembly. Sen. Rod Wright, D-Los Angeles, gave an impassioned speech against the bill, and said he was not moved by promises to amend the bill later in the process. “I only vote for what I can see,” Wright said.

Outside of the state budget, Simitian’s bill has emerged as the first major legislative fight of 2009. The bill has created fluid political coalitions that have, at time, pitted environmental groups against each other, and have raised concerns about rate-payer protections and increasing energy costs.

Under current law, utilities are required to produce 20 percent of their power from renewable resources — including wind, geothermal and solar power —  by 2010. But many utilities are struggling to meet that 2010 deadline. Currently, about 12 percent of California’s energy comes from renewable sources.

Opponents say the new requirements will drive up the cost of electricity, and put utilities in danger. “My concern is that we are going to make ourselves the greenest Third World economy in the world,” said Sen. John Benoit, R-Riverside.

During the floor debate Tuesday, many Senators who voted for the bill noted it was a work in progress. Among them was Sen. Denise Ducheny, D-San Diego, who said, “it does seem a little early in the session for bills to be moving to the other house.” Ducheny wound up voting in favor of the bill.

Sen. Alex Padilla, D-Los Angeles, who held two marathon hearings on the bill earlier this year, outlined a host of outstanding issues that have yet to be resolved among stakeholders, and with the Assembly. Among the most controversial elements of the bill is a discussion of the renewable energy credits, known as RECs. These credits would work in a fashion similar to carbon credits under the state’s greenhouse gas emissions program.

The credits would allow utilities to buy their way out of some of the renewable energy requirements by purchasing energy credits from other green-energy providers. Simitian’s measure does not allow for any such credits. But the Assembly’s major renewable bill, AB 64 by Assemblyman Paul Krekorian, D-Glendale, allows utilities to purchase credits for up to half of their new requirements.

The battle over expansion of renewable energy requirements was sparked by Gov. Schwarzenegger last year. In November, Schwarzenegger signed an executive order requiring utilities to meet the new, rigorous standard. That spurred Steinberg to move quickly with Simitian’s legislation.

But Republicans demanded Steinberg draw the breaks on the legislation. “This bill’s not cooked,” said Sen. Dave Cox, R-Fair Oaks. “It doesn’t cost anything for us to (wait to) get it right.”

But Steinberg pressed on. “There’s nothing wrong with taking the lead and showing some leadership on an issue,” Steinberg said. “Let’s make this an early victory for this Legislature and this state.”

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