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David Pettit’s Blog

No On California Prop. 7

David Pettit

Posted October 28, 2008

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 California's Proposition 7 is well-intentioned but so badly written that it is likely to hinder, rather than accelerate, fulfillment of our need for more renewable energy resources.  

NRDC has been fighting for renewables and for energy efficiency for over 20 years.  We are not shy about litigating against the power industry when appropriate.  I've been debating Prop. 7 for the last few weeks.  Invariably, the proponents claim that NRDC is in bed with the power companies, who also oppose Prop. 7 and who are funding the "No on 7" ads that you see on TV.  Well, the bed is getting pretty crowded because every major environmental organization in California, all the principal representatives of California's renewable energy industry, every major newspaper, the Democratic Party, the Republican Party, business, labor and taxpayer organizations are all against it.  

Why?  Here are the major drafting flaws.  And keep in mind, built into Prop. 7 is a 2/3 vote requirement for any legislative fixes.  We've just seen how destructive that is in the 80-day struggle to pass a budget in California. 

  • The small solar industry will be destroyed.  There is a very odd combination of sections of Prop. 7 that makes renewable facilities under 30 megawatts not eligible to be counted against the renewable energy requirements.  This will include all of the rooftop solar installations that you see.  For those of you keeping score at home, this results from the interplay of Sections 6, 7 and 14 (in that order) of the Proposition.  Proponents say this isn't so because these sections of Prop. 7 will go into different California Codes, but their argument makes no sense because a judge will look at the Proposition as a whole.  The California Public Utilities Commission agrees with us on this issue - and they will have the last word if Prop. 7 passes, regardless of whatever the Prop. 7 proponents now say their intention was. 
  • Prop. 7's loopholes for non-compliance are enormous.  Take a look at Section 9 of the Proposition.  The loopholes include having an executed contract rather than having actual units on line - this is "paper energy."  Also, the municipally-owned utilities get a special break:  5 years to evade the limits because they had "insufficient time" to meet the targets.
  • The pricing system discourages competition.  Prop. 7 calls for a market price to be set, allows renewable facilities to offer power at 10% over that price, and requires the utilities to take the power at that price.  This market plus 10% price will become a floor, not a ceiling - if you were a renewable producer, why offer a lower price when the utility must take the higher price?  Because of this, the language in Prop. 7's preamble about reducing prices to consumers by 3% is fantasy.
  • Prop. 7 wreaks havoc on facility siting and environmental review.  Prop. 7 massively disrupts the process for siting renewable energy facilities and the transmission lines that will serve them by trying to rewrite perfectly sound longstanding rules and oust local governments from their traditional role in land use decisions.  In addition, under Prop. 7 if a box is checked on a form saying that there are no serious environmental issues with the siting of new facilities or transmission lines, the environmental review time is reduced to 6 months.  I have been litigating environmental land use cases for many years, and I can tell you that 6 months isn't enough for meaningful public review of a large project given the shenanigans that project proponents and their governmental allies often pull.  If you like having some degree of local control over power line siting, you can kiss it goodby if Prop. 7 passes. 

What should we do instead?  NRDC supported SB 411 in the last legislative session - a bill that would have raised the renewables target to 33%, the same target in the state's draft scoping plan for AB 32, California's Global Warming Solutions Act.  SB 411 failed, but its proponents believe that issues raised by consumers, labor and power companies have been resolved and that we will see a 33% standard signed into law in the next legislative session after an open, public process where flaws can be identified and solutions worked out.  

This is a much better solution than falling for the feel-good ads for Prop. 7 and enacting a confusing, poorly-drafted plan that will take years to straighten out.  NRDC recommends  a "No" vote on Prop. 7.    

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bernardo isselOct 29 2008 12:18 PM

NRDC NOT TO BE TRUSTED: Considering NRDC's role in greenwashing free trade, deregulation, carbon trading, Enron, coal, nuclear power, biofuels and more, I am hesitant to defer to NRDC on major environmental policy, including Prop 7.

An anonymous blogger by the handle of SolarCaliGirl slams the ethics and judgment of NRDC and the other elite enviros who've been criticizing Prop 7.
I suggest people look at the site for a different perspective.

SolarCaliGirl’s blog reminds us that that NRDC played a leadership role in designing and defending California's electricity restructuring. We saw how well that worked out. Considering that NRDC utterly botched deregulation, setting California up to be manipulated and plundered by the energy companies, such as Enron which NRDC had gone to bat for and dubbed “progressive”, a more self-reflective environmental community would not be assigning trust to NRDC.

NRDC may have many good-intentioned people on staff, but organizationally I believe NRDC to be too subservient to corporate interests. As described in the New York Times, NRDC cannot even tell General Electric to immediately phase out incandescent light bulbs – instead planning a ten year phase out coupled with “conservation measures”, though NRDC is happy to encourage individuals to change their bulbs on a voluntary basis. Last I heard, General Electric was thinking of selling the bulb division; instead the company should utterly transform the product rather then profit from some other company continuing to manufacture the polluting bulb.

David PettitOct 30 2008 01:47 PM

Bernardo's post illustrates exactly what my post is about. The opponents of Prop. 7 have a hard time coming up with arguments on the merits and so they usually resort to mudslinging. NRDC is not the only group opposing Prop. 7. Here are some others: Sierra Club, Union of Concerned Scientists, League of Conservation Voters, the renewables industry, the Democratic and Republican parties, labor, the Chamber of Commerce, taxpayer groups. There is a reason for this, and the reason isn't that SCE, with which NRDC is now in litigation, is paying them all off. It's because each group, for their own reasons, sees the huge flaws in Prop. 7 -- flaws that your post does not address.

Tam HuntOct 31 2008 01:53 PM

With all due respect to David and NRDC, most of the claims made against Prop 7 above are blatantly wrong.

Prop 7 would NOT negatively affect small renewable companies and NRDC surely knows this. Prop 7 makes no change to existing law on this issue. Prop 7 does put in place a fast track permitting process for projects 30 MW and up, but this has no impact on the eligibility of smaller projects re renewable energy requirements more generally.

Prop 7 does NOT require utilities to accept contracts at 10% over the market price. It provides that such contracts are reasonable "per se," giving a potential boost for renewable energy contracts. Only contracts at or below the market price are required to be taken by the utilities. Such misreadings of Prop 7's language are puzzling.

Prop 7 valiantly attempts to create a fast track permitting process for renewable energy projects over 30 MW (and the necessaryu tranmission lines to connect them to the grid). But this process requires that an initial review find no significant adverse entironmental harm. If this initial review does find a possible significant harm, the normal process is used. Projects 30 MW and up are fairly large, so the chance of no significant environmental harm being found are slim to none. Ergo: this fast track process will probably never be used.

On balance, Prop 7 is a set of very smart policy changes that will take us far toward a renewable energy future. The current system is clearly not working, as we've had almost no new renewables in the last six years. Prop 7 will kick start the system and get us moving.

Cali CoasterOct 31 2008 11:50 PM

When the utility Companies spend $27,000,000 to stop Prop.7 you realize they don't want to change.

I have supported the NRDC for years. I've written numerous letters on their behalf. It is very disappointing to find out that the organization is not supporting 50% renewable electricity by 2025 in California.

Organizations grow and lose their way. When a different group or individual finds a quicker way to accomplish similar goals, often jealousies are formed. The arguments against Prop. 7 are weak.

Even Professor Walter Kohn, one of UCSB’s three Nobel Prize winning scientists has endorsed Prop. 7.

David PettitNov 1 2008 03:13 PM

Tam and I disagree on the merits of Prop. 7 but agree that California needs more renewable energy, sooner rather than later. The recently-released CARB draft scoping plan for California's AB 32 calls for a 33% renewables goal. The Governor is behind this and I think the utilities know it is going to happen whether they like it or not. I hope that Tam and the other well-intentioned proponents of Prop 7 become involved in the legislative process in the next session of the CA legislature to fix the renewables problem. As for me, I need to do some legal work now:

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