California Ballot Initiatives: Good or Bad for Clean Energy?

At first glance, the two ballot initiatives seem like they would create nothing short of a renewable energy revolution in California. But upon further inspection, say opponents, the proposed laws could actually hinder the development of renewable electricity and battery-based transportation options.

Perhaps the most ambitious of the two is Proposition 7, which would amend the state's renewable portfolio standard (RPS) to require utilities to generate 40% of their electricity from renewables by 2020 and 50% by 2025. The RPS is currently at 20% by 2010.

If Proposition 7 becomes law, say backers, it will create a “renewable energy renaissance” and finally get renewable energy penetration levels high enough to have a meaningful impact on climate change.

“We're tired of the foot-dragging and the incremental approach to developing renewable energy. This bill shows that we're serious and that we're not going to wait around any more,” says John Thiella, an organizer with the Yes on 7 campaign.

Along with increasing the RPS, Proposition 7 creates a 20-year feed-in tariff for producers of renewable electricity, fast-tracks construction permits for renewable energy facilities and requires the California Energy Commision to designate clean energy zones around the state.

“This is the most ambitious, comprehensive step toward a renewable energy future we've ever proposed,” says Thiella.

But a large number of industry trade groups, individual companies and environmental advocacy organizations are opposing the measure, saying that it could hurt the industry's growth. The language in the initiative is so sloppy, they say, it will create a messy legal situation over what qualifies for the RPS and virtually shut down the state's burgeoning renewable energy industry.

“There appears to be a drafting error in the proposed language of the proposition that would exclude all projects of 30 megawatts and less from being included in counting toward the RPS goal,” says Sue Kateley, executive director of the California Solar Energy Industries Association. “This is a poorly worded law and we just can't support it.”

The central issue is the definition of “solar and clean energy plant.” The measure currently defines such a plant as “any electrical generating facility...with a generating capacity of 30 megawatts or more.” Because that term is used throughout the entire initiative to describe eligible RPS projects, opponents believe that a legal body will interpret that to mean all systems under 30 megawatts (MW) do not qualify under California's procurement obligations.

But Tam Hunt, an attorney with the Community Environmental Council, an organization that supports Proposition 7, says that the arguments by opponents about "clean energy plant" and "clean energy facility" don't take into account that they appear in different codes of the law.

"In fact the 30 megawatt issue is not an issue at all," says Hunt. "It's a complicated issue, but we believe the courts will interpret the plain meaning of clean energy facility, which does not exclude projects under 30 MW."

The complications surrounding the language are what worry the opposition. Other organizations within the industry that are opposing the measure include: The American Wind Energy Association, the Center for Energy Efficiency and Renewable Technologies (CEERT), the League of Conservation Voters, the Union of Concerned Scientists, the Natural Resources Defense Council (NRDC) and Vote Solar. Individual companies such as BrightSource, Cleantech America OptiSolar, Schott Solar and Horizon Wind have come out against Proposition 7 as well.

“Having to oppose something like this puts us in an awkward place,” says Ralph Cavanaugh, Co-Director of the Energy Program at NRDC. “But we think that when voters see such a diverse coalition of renewable energy supporters expressing their concerns, they will understand that this is a flawed initiative.”

Although most opponents praise the drafters of Proposition 7 for their intentions, industry representatives say they were never consulted on the language.

“This was a small group of people putting together a law on something they didn't necessarily know a lot about,” says John White, executive director of CEERT. “They were out to do good, but without industry input, they may actually do more harm.”

Supporters of Proposition 7 say the language is tight and that the 30 MW issue is being exploited by utilities that don't want to increase their procurement targets. Utility companies Southern California Edison and Pacific Gas and Electric are opposing the measure and have thrown tens of millions of dollars behind the campaign to kill it.

“Prop. 7 has no exclusions at all. But this is the big lie that is being promoted by the large utilities,” says Yes on 7's Thiella. “This is part of the lie campaign and we think that voters are going to understand that this is untrue and will reject the disinformation campaign of the big utilities.”

Opponents who represent the industry dismiss those claims. “We want this as much as they do,” says NRDC's Cavanaugh. “But we're not going get anywhere with an initiative like this. We need to do it right in order to grow this market properly.”

While solar and wind companies worry about the potential changes to California's RPS, there are growing fears that another ballot initiative, Proposition 10, will build the market for natural gas-fueled vehicles at the expense of plug-in electric hybrids and battery-electric vehicles.

Proposition 10 authorizes the state to issue US $5 billion in bonds from California's general fund in order to provide incentives for “clean alternative energy vehicles” and research and development of next-generation transportation.

Opponents are labeling the initiative as a “cash grab” for producers of liquified natural gas. Clean Energy Consultant Tony Rubenstein says that the rebates heavily favor natural gas vehicles over other technologies. Because no vehicle currently meets the “ultra high efficiency” requirements laid out in Proposition 10, there can be no rebates handed out for battery-based cars and trucks. Meanwhile, says Rubenstein, there are US $2.5 million in rebates for natural gas vehicles that can be put on the road today.

“It all sounds great on the surface, but when you dig into the language it becomes apparent that the natural gas producers are going to win out on this one,” says Rubenstein. “And while natural gas has proven to be a great fuel for some bus and truck fleets, there are a host of problems that could arise if we rely on it in a broader way.”

Importing more natural gas to fuel vehicles will just keep the country dependent on foreign sources of energy, he says. Also, the volatile price of natural gas opens consumers up to price spikes at the pump.

“This measure is financially backed by T. Boone Pickens' company Clean Energy Fuels, which stands to gain a lot from it passing,” says Rubenstein. “Do we want California tax payers to subsidize the natural gas market at the expense of more promising technologies?”

But Todd Campbell, director of public policy for Clean Energy Fuels, says that interpretation of the initiative is misguided. Proposition 10 will spread the incentives across the entire market, making sure a broad range of technologies gets adopted by California drivers, he says.

“This is anything but a natural gas fuel initiative. It is a Manhattan Project for a whole host of high-efficiency and low-carbon clean alternative fuels,” Campbell says. “Proposition 10 funds approximately 112,000 passenger car incentives that low carbon-fueled vehicles like natural gas or hydrogen fuel cell vehicles cannot compete for.”

In addition, he says, there will be many vehicles on the road soon that will meet the requirements under Proposition 10. Those vehicles include Toyota's plug-in hybrid, the Tesla Roadster and the Chevy Volt.

Like Proposition 7, the debate over Proposition 10 centers around the interpretation of legal language. Rubenstein says it's very important for voters to read the initiatives and make up their own minds about what they'll do for California.

“It's important to get into the details. But unfortunately, it takes a very skilled reader to understand all of this stuff, so I'm hoping that people ask the right questions and take the time to look at the issues,” says Rubenstein.

Indeed, California voters have their work cut out for them. With support for renewable energy and clean transportation at an all-time high, the initiatives on the ballot this year seem like shoo-in. But as concerns grow over their potentially negative impact on the state's market, the choices for Californians won't be easy.