California governor vetoes credit trade

State legislation that would have facilitated California's 2002 renewable portfolio standard law (Windpower Monthly, October 2002) was vetoed in late September by California Governor Arnold Schwarzenneger. Senate Bill 1478, which counted among its supporters the Union of Concerned Scientists (UCS) and the California Wind Energy Association (CalWEA), would have created a renewable energy credit (REC) trading system within the state and brought forward the date for achieving 20% renewables content in electricity supplies from 2017 to 2010.

John Galloway of the UCS in California says the legislation was needed to establish the rules for trading RECs in the state, an important ingredient for a properly functioning renewables portfolio standard (RPS) law, and to set the accelerated target into law even though the utilities and California Public Utilities Commission (CPUC) are proceeding as if the target is 20% by 2010.

Earlier this year, while campaigning for the California governor spot, Schwarzenneger proposed an acceleration the RPS requirement and he still confirms that support. He even says that he supports moving the state beyond 20% to a 33% target by 2020. Yet he opposed the legislation, saying it sets an "onerous process" that could impede electricity trading in the western US. He suggested the bill's authors instead pursue their goals through the CPUC.


The California Energy Commission has interpreted the original RPS legislation to allow out-of-state renewables projects to qualify in meeting the target, but that was not the law's intent, says CalWEA's executive director Nancy Rader. The amount of renewables available throughout the West is big enough to destroy the renewables market in California, she says. A California REC trading system would have clarified further the requirements.

Galloway thinks that the Western Renewable Energy Generation Information System (Windpower Monthly, April 2004), a REC tracking and verification system known as WREGIS and under development by the Western Governors Association, could effectively serve as a trading platform and be adopted by the CPUC. But that is only as long as the commission clarifies both the out-of-state resource question and the contribution that RECs can make towards a utility meeting its RPS requirement, he says.

The UCS and other renewables advocates are taking the provisions of Senate Bill 1478 to proceedings now going on before the CPUC, while also drafting better legislation for next year if that route fails.