About Prop. 7: Renewable Energy Generation

Proposition 7: Renewable Energy Generation Referenced from the California League of Women Voters website: http://ca.lwv.org/lwvc/edfund/elections/2008nov/pc/prop7.html

THE QUESTION Should the state require all utility companies to increase the amount of electricity generated from renewable sources to 20 percent by 2010 and 50 percent by 2025, and make other regulatory changes intended to increase renewable energy use in California?

THE SITUATION Most of the electricity generated in California power plants is fueled by natural gas, and a substantial amount of electricity used in California is produced out-of-state from coal. These fuel sources release greenhouse gases into the atmosphere. California has enacted legislation to curb greenhouse gas emissions, including adoption of standards that require utilities regulated by the Public Utilities Commission (PUC) to produce 20 percent of their electricity from renewable sources of energy by 2010 and reduction of the state’s greenhouse gas emissions to 1990 levels by 2020. The PUC now regulates (1) investor-owned utilities and (2) electric service providers, but not publicly-owned utilities.

THE PROPOSAL Proposition 7 would extend the existing 20 percent renewable source requirements to publicly-owned utilities, not just those regulated by the PUC, and would increase the required percentage of renewably-generated electricity for all utilities to 40 percent by 2020 and 50 percent by 2025. It would also create new regulations that would, among other things, redefine solar and clean energy plants to require 30 megawatts or more generating capacity; add new criteria for determining the market price of electricity; require 20 year or longer contracts for renewable fuels; and impose penalties for failure to meet renewable energy requirements. The measure declares that in the “short term” the new investment in solar and clean energy would result in no more than a 3 percent increase in rates for consumers, but contains no specific provisions to implement or enforce this declaration.

FISCAL EFFECT State agency regulatory costs could increase by up to $3.4 million annually, and would be paid by fee revenues. State and local costs and revenues may increase and/or decrease by unknown amounts due to possible energy rate increases or decreases, impacts on tax revenue, and energy taxes; the net fiscal effect is unknown. The PUC estimates that increasing renewable fuel requirements would entail a state infrastructure investment in the tens of billions of dollars.

WHAT A YES or No VOTE MEANS
A YES vote means the state would require utility companies to increase the percentage of electricity generated from renewable sources of energy to 20 percent by 2010 and 50 percent by 2025, and make other changes intended in increase renewable energy use.
A NO vote means the state’s requirements for renewable energy generation would remain the same.

SUPPORTERS SAY • This is a balanced solution, written and reviewed by energy and environmental experts, to cut the rising cost of energy and reduce global warming. • It will make California a world leader in clean power, creating over 370,000 new high-wage jobs and growing a strong market for solar and renewable energy businesses, as well as protecting the environment. • The measure will protect consumers by limiting rate increases to 3 percent and prohibiting utilities that fail to meet renewable energy standards from passing penalties on to consumers.

OPPONENTS SAY • This measure would hurt progress in increasing use of renewable power by shutting out the small providers that currently represent nearly 60 percent of California’s renewable energy contracts. • It will increase costs to consumers by allowing power companies to charge 10 percent above the market price, while providing no mechanism for limiting cost increases to the 3 percent per year it specifies. • The measure adds no new renewable energy sources. Simply raising required percentages of renewable energy each year will not create new sources for that energy.

FOR MORE INFORMATION Supporters: Californians for Solar and Clean Energy 916 444-2425; www.Yeson7.net Opponents: Californians Against Another Costly Energy Scheme 866 811-9255; www.NoProp7.com