California Bill May Put Utilities on Verge of Green Goal

California’s three investor-owned utilities would immediately be on the verge of meeting a state requirement to expand use of renewable energy if lawmakers approve a bill crediting them for large hydroelectric sources.

PG&E Corp.’s Pacific Gas & Electric (PCG), Edison International (EIX)’s Southern California Edison unit and Sempra Energy (SRE)’s San Diego Gas & Electric must get 33 percent of their power from wind, solar and other so-called green sources by 2020 under state law. The bill would permit them to count hydropower plants over 30 megawatts, which are now excluded.

The utilities collectively drew 17 percent of their power from renewable sources in 2010, according to a legislative analysis of the bill, which passed its first hurdle in an 8-1 Assembly committee vote April 16. Adding the output of large hydroelectric projects would boost the total to 32.6 percent immediately, just short of the target.

“Because of the high cost of eligible renewable energy, the 33 percent renewable portfolio standard will result in skyrocketing utility rates,” Assemblyman David Valadao, the Hanford Republican who sponsored the bill, said yesterday in a statement. “This bill allows utilities to meet that threshold, which is a good thing for ratepayers throughout the state.”

The biggest U.S. state by population, which consumed 8.5 percent of the nation’s energy in 2009, generated 13.2 percent of domestic hydroelectric power, second only to Washington State, according to U.S. Energy Information Administration data.

Canadian Power

Assemblywoman Nancy Skinner, a Berkeley Democrat, cast the lone “no” vote in the Committee on Utilities and Commerce. Skinner, in a telephone interview yesterday, said the bill would encourage California utilities to buy power from out-of-state generators, chiefly Vancouver, Canada-based British Columbia Hydro & Power Authority, rather than develop renewable-resource generation in California.

“We don’t need to give an incentive to any of our utilities to purchase hydro,” she said. “There’s nothing restricting PG&E or any utility from entering into hydro contracts.”

California sued a subsidiary of BC Hydro, Powerex Corp., in 2005, accusing the company of inflating power costs to the state during a 2001 energy crisis. Greg Alexis, a BC Hydro spokesman, didn’t respond to a telephone call requesting comment.

Backers of the measure include the California Chamber of Commerce and the Association of California Water Agencies, according to the bill analysis, while opponents include the Sierra Club and other environmental groups.

Neutral on Bill

The utilities weren’t listed as proponents, and spokesmen for the companies said they were neutral on the bill. Neither Lynsey Paulo, a PG&E spokeswoman, nor Lauren Bartlett, a spokeswoman for Southern California Edison and Art Larson, a spokesman for San Diego Gas, could say whether passage would put their companies in compliance with the 33 percent standard.

The bill undermines the intent of the law championed by Governor Jerry Brown last year, said Jim Metropulos, a Sierra Club legislative advocate, in a telephone interview yesterday.

“We’re concerned about exporting the impact to British Columbia,” Metropulos said.

Valadao received campaign contributions of $14,800, or 1.4 percent of his total, from electric utilities in his 2010 run for office, according to data compiled by the National Institute for Money in State Politics.

Valadao’s chief of staff, Tal Eslick, said campaign contributions played no role in the assemblyman’s advocacy.

To contact the reporter on this story: James Nash in Los Angeles at jnash24@bloomberg.net

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.