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California Votes On Nation's Most Aggressive Energy Standard

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SAN FRANCISCO — The state with some of the nation's most ambitious clean energy standards went even further Thursday: Regulators approved new regulations requiring utilities to draw a third of their power from alternative energy sources such as wind, solar and geothermal in 10 years.

California already is pushing utilities to reach a 20-percent-renewable standard by next year, which has been a struggle to accomplish. Toughening the rules could prompt regulators across the country to do the same, but some consumers fret that they will end up paying for the changes in the form of higher utility bills.

"To the extent that prices do become unreasonably elevated, there must be a safety valve to protect retail customers," said Matthew Freedman, a staff attorney at The Utility Reform Network, a consumer advocacy group.

At a time when nearly one-eighth of the state's work force is jobless, some want California to dial back, not bolster, its leading-edge air pollution rules. A November ballot measure bankrolled by Texas oil companies would delay the state's landmark 2006 global warming law until the unemployment rate falls dramatically.

Advocates of the proposed utility standards plan say it will usher in "green" jobs and save rate payers money in the long run by decreasing dependence on fossil fuels.

"This standard is going to further diversify and secure our energy supply while also growing California's leading green technology market, which will lead to cost savings for consumers," Mary D. Nichols, chairman of the board considering the new rules, said in a statement after the vote.

Some clean-air advocates gave tepid support for the regulation but said it is filled with loopholes that would allow utilities to circumvent clean-energy upgrades.

Regulators say California now gets nearly 14 percent of its electricity from renewable sources, excluding large hydroelectric plants and nuclear power, which do not count toward either the proposed or the existing standards.

Gov. Arnold Schwarzenegger has said he favors raising the state's renewable mandate to 33 percent to help the state comply with the 2006 global warming law, which seeks to reduce California's greenhouse gas emissions to 1990 levels by 2020.

The California Legislature failed to vote by the end of its session on a bill that would have adopted the 33 percent standard. The California Air Resources board took up the issue Thursday. Rules set by the board are more easily undone than laws approved by the Legislature, and its requirements would need to be adopted within a year by a state legal office that reviews new regulations.

Laura Wisland, a clean energy analyst at the Union of Concerned Scientists, said her group wants a 33 percent standard, but not this one.

She said the air board's plan would actually slow clean technology investment because it allows utilities to meet the entire 33 percent by purchasing "renewable energy credits" rather than actually using renewable energy to supply their customers. The credits would represent renewable power that was generated at facilities outside California and never ends up in the state.

"California doesn't get any power for that (energy credit) purchase, so we get no greenhouse gas reduction benefits, no air quality improvements and no clean jobs," Wisland said. "But the utilities still have to provide electricity for customers, and that could still come from fossil fuels."

Under current law, utilities are not authorized to use any renewable energy credits to satisfy the 20-percent targets. All the energy must be produced in California or in another state connected to its power grid.

The air board said it will consider placing a cap on renewable energy credits as the regulation's language is finalized in coming weeks.

One of the state's three large, investor-owned utilities, Pacific Gas & Electric Co., said it is committed "to working to achieve the 20 percent and 33 percent targets."

The company, which has more than 6 million customers in central and northern California, has struggled to meet the 20 percent goals in the set time frame, but says it has made substantial progress. PG&E has contracts for renewable energy deliveries representing more than 20 percent of its future needs, but many of those projects are not yet producing energy, said Cynthia Pollard, a company spokeswoman.

Utilities face fines for failing to meet the goals but can seek extensions.

Cindy Montanez of the Los Angeles Department of Water and Power applauded the regulation and said the utility is moving quickly to increase its renewable energy. "We want to see real emission reductions and real jobs created. We think this is a smart way forward," she said.

Consumer advocates warned that the proposal did too little to protect utility customers from fluctuating energy costs. Young said there are no cost caps in the current plan, but added that officials will be able to add them later if they are needed.

In a state with a 12.4-percent unemployment rate and heated contests for governor and senator, the debate over whether a renewable electricity standard will create or kill jobs has been fierce.

California voters will have a big say in the future of the state's efforts to cut greenhouse gas emissions when they vote Nov. 2 on Proposition 23. The measure would delay the global warming law until California's unemployment falls to 5.5 percent and stays there for a year. The proposition would not affect the renewable energy standards, legal experts said.

Congress considered imposing a national renewable electricity mandate in the latest energy bill, but the idea was nixed amid heavy opposition from utilities. Senate Democrats hope to pass a bill after the midterm elections that would mandate utilities get 15 percent of their energy from such sources by 2021.

Renewable energy projects are under way across the West, though many are years from being able to deliver power to energy-hungry cities. On Thursday, the California Energy Commission approved plans to build a massive solar energy plant in the Mojave Desert that could generate enough power for about 140,000 California homes.

Hawaii has a 40 percent renewable energy requirement, but has given its utilities until 2030 to meet the standard.