Hot Topics In Clean Energy This California Legislative Session

on May 27, 2016 at 10:00 AM

Obama To Deliver Major Climate Change Speech

As the days are getting longer and the weather is warming up, kids across the country are counting down the days until summer vacation. California state lawmakers, on the other hand, are rolling up their sleeves and building upon California’s strong foundation of clean energy leadership and momentum. With the electricity sector responsible for about 20 percent of California’s total greenhouse gas emissions – the main culprit of climate change – the state still has work to do.

Last year, the California Legislature passed ambitious clean energy legislation. At the head of the pack, SB 350 (De León) raised the state’s renewable energy target to 50 percent by 2030 and required a doubling of savings gained from energy efficiency in the residential, commercial, and industrial sectors.

This year, the legislature is considering bills that could help California continue on the path to a clean energy future. It is up to our lawmakers to ensure these efforts make it past the finish line and onto the governor’s desk.

This year’s stand-out clean energy legislation

The following bills will help California and its communities feel the environmental and economic benefits of clean energy, protect against unnecessary investments in fossil fuel generation, and increase the use of job-creating clean energy technologies throughout the state:

  • AB 1937 (Gomez) is designed to help California’s most highly-polluted communities see more clean air and clean energy, while moving the state forward in building a cleaner, healthier electricity system. Under this bill, utilities seeking to build fossil fuel generation would have to actively seek bids outside of highly polluted communities and demonstrate they have tried to meet electricity needs through cleaner options. In doing so, it will help reduce pollution overall in California and in highly burdened areas.
  • AB 2460 (Irwin) would provide greater incentives for the installation of solar thermal systems – solar power used to heat water and other liquids – to help reduce demand of natural gas in light of the Aliso Canyon disaster. To accomplish this, AB 2460 would extend the California Solar Initiative (CSI) Thermal programfunding for ten years through 2027 and reserve half of it for solar thermal systems in low-income homes or buildings in disadvantaged communities.
  • SB 886 (Pavley) is aimed at increasing the use of clean energy storage in California, a technology that complements solar generation and allows more clean resources on the grid. The bill would require electricity companies to incentivize customers to install energy storage systems. Further, it would require the California Public Utilities Commission to determine feasible targets for each utility to acquire viable and cost-effective energy storage systems by 2030.
  • AB 1550 (Gomez) would direct a to-be-determined percentage of California’s cap-and-trade program funds to projects that benefit low-income households, in addition to the 25 percent of cap-and-trade funds currently required to benefit disadvantaged communities.

In addition to these bills, a provision in SB 350, which passed last year, opened the door for California to consider a western regional energy market (also referred to as “regionalization”) in this year’s Legislature.

The big Kahuna: thinking regionally, acting locally

By merging the California Independent System Operator (CAISO) with other grid operators in the west, we can help California meet its climate and clean energy goals, while also making the entire western energy grid more efficient, affordable, and reliable. For example, if California is overproducing solar at 3pm, it could sell its excess electricity to Oregon, where clean energy is less abundant at that time. This type of regionalized energy trading is important to facilitate the ambitious goals set out in SB 350 and ensure optimal integration of low-cost, clean energy resources.

Last week, CAISO released a set of studies to evaluate the cost savings, economic, and environmental impacts of regionalization. The findings suggest a western-wide market would reduce carbon emissions, air pollution, and the costs of integrating more renewables on the grid between 2020 and 2030. In the near term, however, the study shows that merging CAISO with only PacifiCorp – a utility serving six states throughout the west – would result in a slight increase in greenhouse gas emissions from coal use in other parts of the west. This finding underlines the importance of getting the CAISO expansion right to ensure this does not happen.

It is important we put the right legislative framework in place – one that works for California, clean energy, and our fellow states.

As Californians, we want to design a regional energy market that supports the continued transition to clean energy, and away from carbon-intensive, fossil fuel generation. And, we must do so in a way that encourages other states to participate. In essence, we must ensure the creation of this market achieves the following:

  • Creates a fair and balanced governing structure with no special control by any state, clear paths for stakeholder involvement, and transparent processes.
  • Ensures renewable and demand-side resources, like rooftop solar and energy efficiency, environmental, renewable energy, and demand-side experts on stakeholder advisory boards.
  • Uses California’s energy policies to build a substantial amount of renewable generation, either in-state or delivered directly to California, as well as more renewables throughout the larger regional electricity grid.
  • Does not allow a regional market to interfere with California’s (and other states’) ability to pursue innovative renewable and demand-side management policies.
  • Ensures that coal-generated electricity is kept out of California and that regionalization does not increase carbon produced elsewhere in the expanded market. Similarly, be sure that air pollution does not worsen in California, particularly in highly polluted communities and other environmentally sensitive areas.

Stakeholders are currently discussing with the legislature and governor’s office how this market would function. A bill related to the CAISO expansion could come before the legislature this session, bringing the west one step closer to creating a regional energy market. It is important we put the right legislative framework in place – one that works for California, clean energy, and our fellow states. If we do, we can unlock substantial economic and environmental gains for California and the rest of the West.

Building California’s clean energy future

If passed into law, these bills and the possible creation of a western regional energy market would build upon California’s solid foundation of ambitious clean energy policies. California legislators should take action to solidify the state’s leadership in the fight against climate change and formation of an inclusive, clean energy economy.

By Lauren Navarro-Treichler

Originally Published on May 25th, 2016

The Energy Exchange Blog is a forum where EDF‘s energy experts discuss how to accelerate the transition to a clean, low-carbon energy economy. Follow them on Twitter here: @EDFEnergyEX