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Originally published Thursday, September 10, 2009 at 7:23 PM

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Calif. lawmakers weigh rules on renewable energy

Increasing California's use of renewable energy would seem like a relatively simple goal, but it has become one of the hottest legislative debates as lawmakers rush to finish their business for the year.

Associated Press Writer

SACRAMENTO, Calif. —

Increasing California's use of renewable energy would seem like a relatively simple goal, but it has become one of the hottest legislative debates as lawmakers rush to finish their business for the year.

Democrats are pushing two bills that would require utilities to get a third of their power from renewable energy sources by 2020. It would be the most aggressive such standard in the nation.

How and where utilities would be allowed to get that energy remains a point of contention between the utilities, producers of renewable power, environmental groups and consumer advocates.

California already has one of the most aggressive standards of the 31 states that require utilities to generate a certain amount of their power from renewable sources, according to the Arlington, Va.-based Pew Center on Global Climate Change. In Hawaii, utilities must generate 40 percent of their power from renewable sources by 2030 - a longer timeframe than the goal being considered in California.

"It gives us an immediate opportunity to clean up the air. It give us an immediate opportunity to address climate change," said Democrat Sen. Joe Simitian, one of the bill's authors. "And by diversifying our energy portfolio, we're less vulnerable to market manipulations."

The Senate and Assembly are expected to vote on two companion bills by the end of Friday, the last day of the regular legislative session. Neither bill had Republican support in committee.

Gov. Arnold Schwarzenegger favors raising the state's renewable mandate to 33 percent but has yet to take a position on the bills. The Republican governor has said increasing the amount of energy generated from wind, solar and geothermal sources is one way California can meet the requirements of a 2006 law mandating statewide reductions in greenhouse gas emissions.

Simitian said some of the state's largest utilities, including Pacific Gas & Electric Co., Sempra and the Los Angeles Department of Water and Power, support the legislation. Other backers include the Union of Concerned Scientists, consumer advocates and associations representing wind and solar developers.

"California is going to be a leader on developing renewables," said Laura Wisland, a clean energy analyst at the Union of Concerned Scientists. "We think the bill provides enough flexibility to allow the utilities to meet the 33 percent standard in their own way."

The country's largest buyer of renewable energy, however, describes the legislation as unworkable.

Stuart Hemphill, a senior vice president of power procurement at Southern California Edison, said lawmakers have drafted bills that would limit the amount of power utilities could buy from alternative-energy sources outside California.

"We are increasing the demand for renewable energy. But if you don't increase your supply options, basic economics says you're going to have higher prices," Hemphill said.

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The bill would allow utilities to import renewable energy generated outside the state as long as the power comes from a plant that connects directly into California's electricity grid. Utilities could also buy a limited number of credits from alternative energy producers outside of California as a way to save money instead of building expensive plants in California.

Edison already buys the maximum amount of out-of-state renewable power that would be allowed under the bills, meaning the utility would be left with few options to meet the new standard, Hemphill said.

The Independent Energy Producers, which represents companies that provide 80 percent of California's renewable energy, is in the awkward position of opposing legislation for a standard the group has long wanted raised. It argues that more renewable power from out-of-state sources is needed if utilities will be required to meet a higher standard.

"Renewable resources throughout the West are very important in displacing other types of generation we currently depend on," said Jan Smutny-Jones, executive director of the association.

The limitation on out-of-state power was sought by consumer advocates and environmental groups, which wanted the bulk of California's renewable energy to be generated within the state. They said it would help promote job growth.

Sen. John Benoit, R-Palm Desert, predicted the governor would veto the bills because they fail to control electricity costs for California businesses and residents.

"All these things add up to extremely high costs for purchasers of electricity at a time we know this economy is on its knees," Benoit said Thursday during a Senate committee hearing.

California's investor-owned utilities are currently obligated by law to generate at least 20 percent of their power from renewable sources by next year, although most are expected to miss the deadline.

The legislation under consideration also would require municipal utilities such as the Los Angeles Department of Water and Power and the Sacramento Metropolitan Utilities District to meet the 33 percent target.

The California Public Utilities Commission issued a report saying the higher renewable energy mandate would create a need for more transmission lines and other infrastructure costing $115 billion over 10 years.

Earlier this week, lawmakers amended the bill to give utilities more time to meet the standard if transmission lines did not get built or circumstances outside their control prevented them from reaching the 33 percent mandate. That prompted the group Environment California to pull its support for the legislation, saying the amendment was a loophole favoring utilities.

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On the Net:

Read the bills, SB14 and AB64, at http://www.senate.ca.gov and http://www.assembly.ca.gov

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