Achieving California’s Ambitious Energy Plan Difficult and Costly
Obtaining 33 percent of its energy from renewable sources by 2020 would be good news for California’s environment and would help guard its market against future price fluctuations—but reaching that goal will be difficult and costly.

California’s Independent System Operator says that building the transmission infrastructure to support that level of renewable power could cost as much as $6.5 billion.

Schwarzenegger’s ambitious executive order, signed last November, did clear some regulatory barriers to new transmission and generation construction, but could be abolished by the next governor.

Consumer power bills will certainly increase to accommodate the cost of new renewables generation and infrastructure, but given the price volatility of natural gas and other fuels, some believe the changes could ultimately even save customers money.

Some measures under consideration would impose caps on rate increases to consumers—but how generous those caps should be is itself a matter of debate.

Also at issue is how out-of-state renewable power purchases should be credited. Democrats and other pro-labor groups say keeping the generation capacity within the state will create much-needed new jobs. But others, including utilities, say the sheer ambition of the target will require out-of-state resources and that the importation of renewable power should not be restricted.

The governor is expected to support utilities in the interest of helping contain costs to the state’s ratepayers. Overly stringent in-state requirements could cause a spike in the cost of renewables produced within California, say some.

Return to September 2009 Western Energy News

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