California feud breaks out on clean energy plan

SAN FRANCISCO/LOS ANGELES (Reuters) - California Governor Arnold Schwarzenegger will veto a bill requiring the state to get a third of its electricity from solar, wind and other renewable sources, his staff said on Monday in a fight that shows the difficulties of addressing climate change fast.

California Governor Arnold Schwarzenegger speaks during a news conference in San Francisco, California July 3, 2009. REUTERS/Robert Galbraith

However, the governor on Tuesday will issue an executive order with the same goal, but different rules, his staff said.

Schwarzenegger, whose legacy is largely pinned on driving California’s response to global warming, believes the bill passed in the last hours of the legislative session on Friday would make it more difficult to build solar plants in the state and to buy power from neighbors.

California’s rank as the largest market for renewable power makes any decision important, and as the U.S. Congress struggles to put together a federal plan, the state’s leadership and failures could shape a national plan.

“The industry and regulators are going to wind up spending the next few years wrangling about how to implement the bill as opposed to actually putting steel in the ground,” said Public Utilities Commission Deputy Director Nancy Ryan on a call sponsored by the governor.

She said more flexibility was needed, while the bill’s main sponsor said curbs on buying power from out of state would ensure jobs were kept in California and give needed weight to the 33 percent goal, which state agencies have already set.


While many states debate whether so-called green jobs are real and if the cost of cutting carbon is worth the price, Californians focus mostly on how and how fast to move.

Both sides in California want the state to get 33 percent of its electricity from solar, wind and other alternative energy by 2020.

A study by the state’s utilities commission says that is unlikely in almost any circumstances due to the complexity and cost of the project, while a 2010 goal of 20 percent renewables is judged impossible to hit on time.

Schwarzenegger’s administration plans a Tuesday executive order for the state’s climate change lead, the Air Resources Board, to implement the 33 percent standard, and the agency chief said that could be done by the middle of next year.

But the governor’s order could be canceled by the winner of the 2010 ballot race to succeed Schwarzenegger, which bill sponsor State Senator Joe Simitian was concerned would limit its effectiveness and raise legal challenges.

Industry lined up on both sides. Makers of solar thermal power plants would face new permitting requirements, and out-of-state wind generators would face limits on generation outside California, said Jan Smutny-Jones, executive director of the Independent Energy Producers association, which backs the governor’s veto.

Photovoltaic solar panel maker First Solar lined up in favor of the bill, as did the California Wind Energy Association.

“If the governor does not sign the bill ... we fear that there will be uncertainty and chaos in this market for years,” said the wind group’s executive director, Nancy Rader.

Lorraine Paskett, First Solar’s vice president of policy and market development, said a veto would “send a negative message to the solar market and renewable energy market not only in California but in the United States and around the world.”

Solar power makers may get another boost if the governor signs a bill that increases support for small projects with a so-called feed-in tariff. California-based solar power company SunPower Corp would be a major winner in that case, said FBR Capital Markets analyst Mehdi Hosseini.

(Editing by Carol Bishopric)

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