February 13, 2014

Withdrawal of Assembly Bill 177 Threatens California’s Renewable Energy Leadership

California is backing away from a bill that would have strengthened its renewable portfolio standard. This move threatens the state’s leadership on renewable energy policy.

By Nick Lawton, Energy Fellow

California has long been a leader in renewable energy policy, but the withdrawal of Assembly Bill 177 threatens the state’s leadership by failing to strengthen its renewable portfolio standard (RPS). California was among the first states to adopt an RPS in 2002, requiring utilities to produce or procure a certain portion of renewable energy by a certain date. California originally required 20% renewable energy by 2017 and has strengthened its RPS twice since. Today, California’s RPS is among the strongest in the nation, requiring utilities in the state to produce or procure 33% of its energy from renewable sources by 2020. Assembly Bill 177 (AB 177) would have strengthened the state’s RPS further, requiring 51% renewable energy by 2030 and making California by far the most ambitious state when it comes to renewable energy policy.

            Assemblyman V. Manuel Perez withdrew AB 177 from consideration last week. A series of committee votes had added language to the bill that would have allowed utilities to consider the costs of integrating renewables into the electricity grid when deciding which renewable energy to buy. This provision likely would have helped geothermal energy, one goal of Assemblyman Perez, who hails from a region that would benefit from increased geothermal development. However, Assemblyman Perez cited concerns that this new provision would likely increase utility rates further than the original bill. Erica Felci at the Desert Sun quotes Assemblyman Perez as opposing “a bill that could potentially raise costs for wind and solar, and ultimately the ratepayer.”

            In sum though, Assemblyman Perez’s withdrawal of AB 177 flinches from the reality that different types of renewable energy will inevitably compete as states transition to grids fed chiefly by renewables. Mr. Perez was undoubtedly correct that factoring in integration costs would have favored geothermal power over intermittent sources such as wind and solar power. However, considering such differences in renewable energy sources is eminently rational. Indeed, as California and other states move toward renewable energy, they should consider all the various costs and benefits of different energy sources. Failing to strengthen the state’s RPS for fear that an honest accounting of integration costs may favor one form of renewable energy over another is poor policy and threatens California’s position as a renewably energy policy leader.