United States: Renewables law may be challenged

The autumn legislative session ended with a defeat for proponents of strengthening the state's renewables portfolio standard (RPS). Supporters had hoped to raise the current requirement that utilities derive 20% of their power from renewables by 2010 to requiring 33% by 2020, and to add a host of extra rules and regulations that would have resulted in more renewables generation staying within California state lines. In the end, Schwarzenegger, a moderate Republican, threw out legislation passed by the state legislature and pushed through his own version.

Schwarzenegger said the state legislature's RPS made too many restrictions on the use of renewables generated out of state and could therefore result in unnecessarily high costs for California businesses and consumers. Instead, he used his power to issue an executive order, which establishes a similar RPS of 33% by 2020, but with relaxed limits on out-of-state generation. The California Air Resources Board is tasked with producing specific details of the plan.

Yet much doubt remains over the legality of the action. "There's a huge question about (Schwarzenegger) enacting this by executive order," says Nancy Rader, executive director of the California Wind Energy Association, who says the current RPS law specifically prohibits an increase unless directed through a legislative statute. "It's not at all a clear path. If (the utilities) don't like it, they'll sue, if labour doesn't like it, they'll sue," she says, calling the situation "complete dysfunction".

Seth Hilton, an attorney with Stoel Rives, agrees that the state law prohibition against an increase in the RPS could pose a challenge to Schwarzenegger's executive order. But Hilton says there remains a chance it could be supported by the courts if linked with a separate greenhouse gas reduction law, AB 32, signed in 2006. "There's a good chance this could end up in the courts," says Hilton, "but I don't think it's cut and dried that the Air Resources Board doesn't have the authority."

Rader, meantime, is not optimistic: "This is just a recipe for delay. My guess is that it's not going to get sorted out until we have a new governor and a new law."