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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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