Ledger-Dispatch

By Debbie Dunn (ddunn@volcano.net)=20

One of the energy-related statewide = ballot=20 initiatives on the Nov. 4 ballot, Proposition 7, proposes to set = stricter=20 benchmarks for utility companies providing renewable = energy.

Photo by: Debbie Dunn

Opponents say Proposition 7 could = actually hurt=20 the state's efforts to provide clean energy.

Photo by: Debbie = Dunn
It can=20 be a challenge to turn anywhere on the legislative compass without = smacking into=20 energy-conscious laws. The new paradigm arrives under a plethora of=20 nomenclatures - global warming, greenhouse gas emissions, climate = change,=20 renewable energy - all attempting to rescue us from fossil fuel = dependence that=20 appears to be harming the planet.

On Nov. 4, two ballot = initiatives=20 aiming to increase the use of renewable solar, clean fuels and wind = energy=20 present themselves amid challenges that they are either too expensive or = misconceived.

Proposition 7

When proponents and = opponents=20 come from the same side of an issue, things can get = interesting.

In a=20 nutshell, electricity in California is distributed and regulated by = three=20 different types of service. Investor Owned Utilities, also referred to = as IOU,=20 hold 68 percent of the market, while publicly owned utilities like the=20 Sacramento Municipal Utilities District and electric service providers = split the=20 balance at 24 percent and 8 percent, respectively. Amador County is = served by=20 the privately owned, for-profit IOU, Pacific Gas and Electric Co. IOUs = are=20 legally required to serve a specific geographic service area and are = regulated=20 by the California Public Utilities Commission.

The switch that = allows=20 light to fill a living room arrives through four principal components - = the=20 generating facility, or the hydropower station for Amador; the = interstate=20 electricity grid; the transmission lines that carry electricity from = powerhouse=20 to grid; and finally the distribution lines that carry that energy to = one's=20 living room. Different regulatory and permitting responsibilities are = held by=20 federal, state and local agencies depending on the project. For Amador, = its=20 hydroelectric generating facility is permitted by the Federal Energy = Regulatory=20 Commission through licensing agreements.

Current laws require = IOUs and=20 ESPs to acquire renewable resource energy on their own or purchased from = others,=20 at an increase rate of 1 percent, which sets the target at 20 percent by = 2010.=20 Solar and wind are the allowable energies, not hydroelectric. As of = 2006, the=20 IOUs were at 13 percent renewable energy as defined by the=20 PUC.

Proposition 7 does not change PG&E's target of 20 = percent by=20 2010, but it does throw publicly owned utilities into the boat with = them. The=20 future requirements to all utilities have been raised to 40 percent by = 2020 and=20 50 percent by 2025. Taking into consideration that renewable energy has = yet to=20 be produced at the same cost as current services raises a concern as to = what=20 PG&E will have to pay to meet this demand and who will pay for the = increase.=20 The answer is that the rate payers will bear the burden. At this time, = the law=20 holds a 10 percent above market rate cap on procured energy and rate=20 increases.

Proposition 7 has been funded almost entirely by Peter = Sperling, the billionaire son of the founder of the University of = Phoenix. He is=20 deeply interested in the climate change debate. The legislation was = written with=20 a team of lawyers and Jim Gonzalez, a former San Francisco county = supervisor and=20 political consultant.

Raju Yenamandra, director of sales for = Solar Works=20 California Inc., called the initiative well intentioned, but poorly = executed in=20 the Los Angeles Times. "The significant advantages we have with our = technology=20 is all of a sudden being diminished by this particular proposition," he = told the=20 Times.

Locally, Jerry Scott, founder and director of Amador = Citizens For=20 Energy Conservation, recently presented a plan of action to the board of = supervisors. Scott offered his group to conduct an audit of current = energy use=20 within the county, with recommendations and custom conservation = solutions, at no=20 charge.

As for the ballot legislation, Scott said, "I believe it = is=20 poorly written with too many loopholes. Even the highly regarded Union = of=20 Concerned Scientists are recommending a 'no' vote on both propositions 7 = and=20 10."

Another original member of ACEC, Marilyn Nutter, offered her = impressions of both initiatives. "It is my understanding that it would = focus on=20 hybrid development and hurt wind and solar exploration," she said. "I = think=20 there is a lot of confusion on both, which is why most people I talked = with are=20 voting 'no.' With the economy what it is and California still trying to = work out=20 a budget, most people don't want money going towards more bond/increased = taxes."

Opponents say the proposition could shut out small = generators of=20 wind and solar energy.

The cost to the state from the proposed=20 legislation is estimated at $3.4 million annually. Other potential = short-term=20 costs and reduced revenues resulting from the measure cannot be = determined at=20 this time. Long term, the hope is for a healthier environment with = ratepayer=20 cost savings and revenue increases seen by state and local governments, = but the=20 legislation leaves no clear path to that happy = ending.

Proposition=20 10

Less complicated is Proposition 10, which is looking to = authorize=20 $5 billion in bonds to be paid back over the next 30 years to offer = rebates for=20 purchasing certain high fuel economy or alternative fuel vehicles. = Twenty=20 percent would be used as incentives for research, development and = production of=20 renewable energy technology. Development of alternative fuel vehicles = would be=20 allocated 11 percent and another 5 percent in incentives would be = offered toward=20 the purchase of renewable energy technology. The remaining 6 percent = would go=20 toward renewable technology education grants at eight cities and several = colleges.

Critics of the proposition claim it is a = taxpayer-funded=20 giveaway to Texas oilman T. Boone Pickens, who has financed the $7.7 = million=20 campaign and who owns a natural gas company called Clean Energy=20 Fuels.

Richard Holober, executive director of Consumer Federation = of=20 California, told the San Francisco Chronicle, "Look, we're not against = natural=20 gas. What we're against is using billions of dollars of tax money - = precious tax=20 money - to distort the market and promote one form of energy over others = that we=20 think have a much better future."

Proposition supporters believe = other=20 fuels would be able to compete with natural gas for the same funding and = that=20 the state could monitor rebates. According to the state Legislative = Analyst's=20 Office, the bond money would buy a real reduction in greenhouse gas=20 emissions.

Repayment of the bonds, totaling $10 billion with = interest,=20 would come from increased state sales tax revenues and an increase in = vehicle=20 licensing fees between the years of 2009 and 2018.

"I'm totally = in favor=20 of renewable energy and clean fuels. Proposition 10 appears to lean a = little too=20 far toward natural gas as the only solution," said Brad Barnard, a = salesman at=20 Jeff Holman Auto Center. "Culture shock at the pump is causing us to = grab at the=20 first solutions that arrive. I wish there had been a little more = refinement of=20 the legislation. There are other alternatives like solar and wind that = could be=20 developed. Who knows, maybe they could design wind turbines in the grill = of the=20 cars."

Barnard didn't believe the proposition would affect sales = at his=20 Martell dealership.

Local steps

Amador County = approved its=20 own opportunity to participate in the world of renewable resources last = week at=20 the board of supervisors meeting.

General Services Administration = Director Jon Hopkins introduced Nicki Tallman of Brandis Tallman LLC, an = investment banking firm that just approved a signed lease agreement with = the=20 county for the financing of the recently installed photovoltaic unit on = the roof=20 of the County Administration Center.

"In just the last 30 days = our=20 photovoltaic unit has captured $4,700 in energy costs," Hopkins=20 said.

Tallman walked the board through the Clean Renewable Energy = Bond=20 Act. This is a program where a municipal finance corporation can offer = counties=20 an interest-free loan for projects like Amador's solar = roof.

Brandis=20 Tallman LLC administers and represents City National Bank, which will = hold the=20 loan and receive tax credits in return. The security requested from = Amador is a=20 lease agreement offering an equivalent asset. The county records storage = building was determined to be that asset.

Debbie Dunn
Ledger Dispatch Contributor=20