When Assemblyman V. Manuel Pérez introduced Assembly Bill 177 last June, it contained an aggressive agenda to kick up California’s renewable energy goal to 51 percent by 2030 and require utilities to base purchases of renewable power not only on cost, but each project’s impact on greenhouse gas emissions and grid reliability.
The purpose behind the bill, the Coachella Democrat said at the time, was twofold. It would provide better coordination of the state’s rigorous but fractured goals for greenhouse gas reductions, energy efficiency and clean energy development, while promoting the growth of geothermal energy and other renewables at the Salton Sea to help fund the shrinking saltwater lake’s restoration.
But the version of Pérez’s bill that emerged from two committee votes last week was all but gutted of its strongest provisions, following opposition from 25 business groups, utilities and even some renewable energy developers and trade groups.
Rather than a big vision, the amended bill now aims for a more modest and focused goal, the creation of a state-level advisory group that would make recommendations to the California Energy Commission to help remove obstacles to geothermal development at the Salton Sea and across the state.
The commission could use the recommendations as part of its Integrated Energy Policy Report, an influential road map for energy legislation and policies the agency is required by law to produce every other year.
The slimmed-down bill passed votes in the Assembly’s Utilities and Commerce Committee on Jan. 13 and the Natural Resources Committee on Jan. 16.
While he had initially focused the revisions to the bill exclusively on geothermal development at the Salton Sea, Pérez is now working on further amendments to expand its scope to the entire state.
The bill’s progress – with many opponents either now voicing support or staying neutral – was enough for Pérez to claim a limited victory.
“It allows us to be able to fight another day for our district,” he said in a phone interview following the Jan. 13 vote. “This is going to lend itself to a larger conversation. Without a vehicle, without a bill, there is no conversation. The issue of policy and how the utilities are making those decisions, we don’t have a say in that unless there’s a bill.”
Speaking at the Jan. 13 hearing, Kevin Kelley, IID’s general manager, said the amended bill could shine “a hotter spotlight on the Salton Sea and the renewable resources that exist there. The solution to the air impacts caused by the water transfer lie within the sea itself.”
Kelley was referring to the 2003 Quantitative Settlement Agreement that in 2018 will accelerate the sea’s shrinking as water long used for agriculture – creating runoff that fed the sea – is transferred to urban markets. Exposure of the sea’s lake bed could trigger increased levels of dust and other air pollution and, under the QSA, the state could pick up a major part of the bill to help alleviate environmental impacts.
But not all opponents have been won over. Nancy Rader, executive director of the California Wind Energy Association, said AB 177 still might have the effect of creating a “carve-out” in favor of geothermal energy over wind or solar.
“Our view is all resources should be properly valued, their direct and indirect costs,” Rader said. “We believe the PUC has all capacity to do that. What the (Renewable Portfolio Standard) calls for is least cost, best fit.”
The Renewable Portfolio Standard is the state mandate requiring utilities to produce 33 percent of their power from renewables by 2020.
Pérez and others have argued further regulation is needed because the state’s three large utilities have so far met the mandate primarily with less expensive solar and wind projects.
A legislative staff analysis of AB 177 contained figures projecting that Edison’s mix of renewables for 2020 would be 20 percent from geothermal, versus 33 percent from solar and 39 percent from wind. Pacific Gas & Electric would have only 10 percent geothermal, while San Diego Gas & Electric would have none.
Kassandra F. Gough is the government affairs director for Calpine Corp., the company that owns the Geysers, a group of 15 geothermal plants totaling 725 megawatts in Sonoma and Lake counties. The firm has new plants permitted and shovel ready but cannot obtain utility contracts for them, she said.
“What you want is diversity,” said Karl Gawell, executive director of the Geothermal Energy Association, a national industry group. “You don’t want all wind, all solar, all geothermal. I think they’re ignoring geothermal.”
Such arguments are not without foundation. The Energy Commission unanimously approved its latest Integrated Energy Policy Report on Wednesday, a 322-page document with a single paragraph suggesting the agency will continue to evaluate geothermal development at the Salton Sea.
Instead, the report endorsed replacing the closed San Onofre nuclear power plant with a 50-50 mix of energy efficiency and renewables and new gas-fired power plants.
The plant had provided about 17 percent of Edison’s power. But last year, the company signaled it will not renew some longstanding contracts it has for geothermal power from existing Salton Sea plants.
The utility also has a go-ahead from the California Public Utilities Commission to acquire up to 1,200 megawatts of natural gas-powered energy in the Los Angeles basin to fill the gap left by the June 2013 closure of San Onofre.
While they have yet to take a position on AB 177, Edison officials said geothermal now represents about 43 percent of the company’s renewables. But, they said, regulations requiring utilities to procure new green energy based on “least cost, best fit” tend to preclude new contracts for geothermal.
The company and other utilities are advocating for new regulations that will allow them to include the greater costs of integrating intermittent wind and solar to the grid as one way to help geothermal compete.
Geothermal companies also support that kind of policy change, which is now being considered by the PUC. Possible amendments to AB 177 could also include provisions promoting ongoing exploration of the issue.
Solving the integration issue could be critical for the state to achieve not only its 33 percent renewable goal but to consider getting to 50 percent green energy in the future.
A new report from Energy + Environmental Economics, a San Francisco consulting firm, said the main challenge for utilities loading up on solar power is the risk of over-generation at certain times of the day or year that could require the grid to shut down such projects.
The study, funded by Edison, PG&E, SDG&E, plus Sacramento Municipal Utilities District and the Los Angeles Department of Water and Power, looks at six different scenarios for renewable energy development. The most cost-effective option, with the least over-generation, is a diverse mix of green power.
“Geothermal production is not concentrated during one time of year,” said Arne Olson, a partner at Energy + Environment.
“Geothermal produces the same amount of power every hour; it produces energy in April during the middle of the day and December in the middle of the night.”
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