California Governor: Still Hope For Renewable-Energy Bill

First Published Wednesday, 1st September 2010 07:42 pm - © 2010 Dow Jones


Dow Jones NEWSWIRES

SAN FRANCISCO -(Dow Jones)- California Gov. Arnold Schwarzenegger said Wednesday that he would work to help push through an ambitious renewable-energy bill that the state legislature failed to pass before a midnight deadline.

Schwarzenegger said he would work with lawmakers on the renewable-energy bill while negotiating the state budget.

"We can fine-tune that so we get it done," he said, speaking at a press conference webcast from Sacramento where he discussed the outlook for a bipartisan agreement on the state's budget.

California's Democratic-controlled legislature has been unable to reach agreement with Schwarzenegger and minority Republicans on how to close an estimated $19 billion budget deficit. Schwarzenegger has called for reforming the state's pension-funding scheme, among other changes, as part of a budget agreement, but Democrats have demurred, proposing tax and fee increases instead.

One area on which Schwarzenegger and Democrats agree is the need to expand California's renewable-energy mandate to require utilities to use renewables for one-third of the power they sell by 2020. The mandate, among the most ambitious in the world, is a central component of the state's 2006 plan to combat climate change, a centerpiece of Schwarzenegger's administration.

A state Senate bill, called SB 722, would establish the 33% renewable-energy mandate as a separate law. Despite broad support, the legislature ran out of time Tuesday night for a final vote on the measure before a midnight deadline. While SB 722 is technically dead, the bill could be revived if it were included in the budget process, which is ongoing. It will be up to Schwarzenegger to decide whether to allow the bill to be included in the budget process, a move that he indicated he would consider.

The legislature passed a similar renewable-energy bill last year, but Schwarzenegger vetoed the measure over a disagreement about how much out-of-state electricity would be allowed under the program. This year, the two sides have been much closer to agreement on a renewable-energy bill, although details, including a limit on out-of-state power purchases and compliance rules, were still being ironed out. Lawmakers also were working out final provisions, pushed by Schwarzenegger, for simplifying the approval process for construction of new solar and wind farms in California.

Schwarzenegger, who will leave office at year's end due to term limits, and Democrats have extra motivation to nail down a 33% renewable-energy law, as the climate law that envisioned the mandate is under threat by a proposal set for the November ballot.

Proposition 23, backed by oil refiners Valero Corp. (VLO), Tesoro Corp. (TSO) and other companies, would indefinitely suspend the climate law and associated regulations.

-By Cassandra Sweet, Dow Jones Newswires; 415-439-6468; cassandra.sweet@dowjones.com

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