California Prop-80 and Renewable Energy: tit-for-tat or just plain tat?

Several California TerraPass members have emailed us asking for our opinion on Proposition 80, one of eight ballot measures installed for the California special election November 8. (Confused easterners, east coast transplants, and foreign readers can find a discussion and overview of the west coast initiative process here in pdf).

Hopefully I can give you a few simple facts to help you make your own informed decision.

Summary and Highlights:

Without wading through the full document, here are the main things it means for CA voters. I’ve included what is on the official title, as well as translation for those without an energy policy background (approximately 99.9925% of the California Voting Population)

Official Title Translation
Subjects electric service providers, as defined, to control and regulation by California Public Utilities Commission. Electric Service Providers, or independent power companies like Calpine will now fall under PUC commission regulation
Imposes restrictions on electricity customers’ ability to switch from private utilities to other electric providers. No more new customers for new independent power companies like Calpine
Requires all retail electric sellers, instead of just private utilities, to increase renewable energy resource procurement by at least 1% each year, with 20% of retail sales procured from renewable energy by 2010, instead of current requirement of 2017. This turns the current “policy” from the PUC into law and extends it to independent power companies

Issue #1: Competition
The opening quote from proposition sponsor Bob Finkelstein:

“The central point of Proposition 80 is to say ‘never again’ to deregulation,”

Is this a well informed public policy statement? Yes deregulation in California had significant problems, but the post mortem (see below) lies blame clearly on regulatory implementation. Other states, notably Pennsylvania and Texas (gasp!), have seen lower prices, and higher green power adoption with deregulation, mainly by making sure that deregulation went far enough.

Prop 80 will have a major impact on the independent power companies. The PUC will set price, and the independents will be unable to acquire any new customers.

It’s clear we need new capacity on the grid and that has to come from somewhere. The Prop-80 logic is to entice the monopolists with more monopoly power. Do you want to place all your eggs, in three oh-so-friendly monopolists, or would you like to see entrepreneurs at the table with innovative power solutions? Think about what happened in telecom? Nothing really moved the needle on broadband (i.e. investment by the monopolist) until the CLECs of the world, then cable companies started attacking them head on.

Issue #2: Renewable Energy

We received a call yesterday from a member saying “Yeah, I don’t like it, but they will agree to raise the Renewable Standard”. This is bunk – all the current bill does is legislate the current PUC standard of 20% by 2010.

In fact, the bill will likely make it harder for renewables to continue to develop in California. Most open markets attract new power companies that focus entirely on green power sources (such as Green Mountain) — this bill would restrict those choices for Californians. Secondly, because Prop80 will govern the renewable requirement, an upward revision is impossible without another statewide vote. Finally, the bill is just not climate friendly. It includes restrictions on time differentiated electricity rates (a great way to encourage conservation) and TURN is lobbying against subsidies for smart meters! How can you reduce something if you don’t measure it?

Issue #3: The Menlo Park Energy Policy Committee (meet at the bench in front of Peets Coffee)

Ballot initiatives are very interesting democratic mechanisms, but one has to question the sanity of letting everyday Californians decide on the minutia of our energy policy.

Look yourself in the mirror and ask yourself if you really understand this issue enough to make an informed and optimal decision. If you don’t, vote no, and let the legislature, the governor and the PUC fight it out. If you do, go ask your neighbors what they think about time differentiated electricity rates, the spot market in double clearing electricity forward markets and what the right energy policy is to encourage investment in a sustainable energy future.

DIY: Voter Due Diligence

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  1. Hans P. Deuel - November 3, 2005

    Thank you. I read the entire voter pamphlet and just couldn’t get clear on this one. You summed it up about as well as could be done. A great service!

  2. Mark Hezinger - November 7, 2005

    I also want to extend my thanks. I now think I understand both the problem the initiative is attempting to address, namely a forseeable shortage of power supply, and the solution the initiative is proposing, which is to assuage jittery potential financiers of new power plants by eliminating potential rivals for customers from the utilities that they would be lending the money to.
    At least, I think that’s it…
    Even before reading your blog entry, I kept asking myself “why am I voting on this?” At least I’m now certain that I shouldn’t be, and hopefully a no vote on this will discourage the future funding of signature drives for amateur wonks who recast themselves as an institute.

  3. Jim Wingo - November 8, 2005

    I’ve read the pamphlet and a number of differing organizations’ spin on prop 80, and I still don’t think I understand it.
    The fact that it IS so confusing and those with a vested interest have clearly tried to obfuscate what they are doing should have been message enough to me that it is not a good thing.
    Then I found your page. I’m STILL not sure I understand what they are trying to do, but I like the words, “If you don�t [understand it well enough to vote on it], vote no, and let the legislature, the governor and the PUC fight it out.”
    I’m voting no, as I am on almost all the other initiatives. I’m staunchly conservative, and I think Arnold may have good intent, but some of this stuff gives the governor too much power. Reasonable people can debate whether ARNOLD would do the right thing with that power, but what would a Gray Davis do with it?

  4. Anonymous - May 28, 2009

    It is too bad that people who don’t quite understand the proposal were encourage to vote no on your page. People should be encouraged to understand the proposal fully before voting or not to vote at all if they don’t understand the proposal. That is how democracy should work. Don’t just get on the bandwagon, you might regret your vote.