Inside Cal EPA

The bipartisan Little Hoover Commission (LHC) has scheduled a hearing for later this month to further debate the state’s long-term plans for energy reliability and greenhouse gas (GHG) reductions and their impacts on electricity costs and other environmental policy goals, following up on a controversial report it issued in December 2012.

The LHC hearing could further shape how the Brown administration crafts its energy and GHG policies in the coming years, as well as spur and influence related legislation.

The hearing, scheduled for April 24 in Sacramento, will focus on issues raised by LHC’s report, “Rewiring California: Integrating Agendas for Energy Reform.” The report warned that as the state attempts to meet its stringent renewable portfolio standard (RPS) — which requires utilities and other power suppliers to ensure 33 percent of the electricity they supply comes from renewable source by the end of 2020 — it is vulnerable to rising energy prices, less reliability and new barriers to achieving other environmental policy goals.

Failing to assure electricity reliability, or experiencing an unanticipated spike in utility rates, “could sour Californians on renewable energy policy, which would have repercussions nationwide and beyond,” an introductory letter accompanying the report stated.

In addition, it is unclear whether compliance with the RPS will “come at the expense of the state’s GHG reduction goals,” LHC said. “Intermittent renewable resources, such as solar and wind, will require back-up power supplies, such as gas-fired plants.”

Further, the state’s “lack of an overall cost estimate points up a more profound concern,” according to the LHC. “Despite assembling an ambitious agenda that has gained the world’s attention, the state has failed to develop a comprehensive energy strategy with clearly delineated priorities to ensure that policies are not working at cross-purposes and that California achieves its environmental stewardship goals.”

Policies and regulations affecting electricity have been piled upon each other piecemeal, LHC added. “As a result, numerous state bodies are implementing a long and complicated list of new directives through multiple, sometimes overlapping public processes.”

The governor should “direct the state’s energy organizations to assess the cumulative impact of recent major energy-related policies on electricity rates and reliability and whether these policies are achieving California’s energy and environmental goals,” LHC recommended. In addition, the governor should develop a comprehensive and cohesive state energy strategy that delineates and prioritizes goals.

Representatives of the California Energy Commission (CEC), California Public Utilities Commission and California Independent System Operator are scheduled to speak during the upcoming LHC hearing, where they are expected to “provide an update on the progress California’s energy organizations have made addressing the commission’s concerns,” according to an LHC announcement issued last week.

The hearing will also include a presentation by Robert Lapsley, president of the California Business Roundtable, on the “business perspective.” He will also speak on behalf of Californians for Affordable and Reliable Energy (CARE), an industry coalition.

CARE is the sponsor of a pending bill, AB 1763 (Assemblyman Henry Perea, D-Fresno), which requires agencies to develop a “state energy plan” for 2030 and 2050 that promotes economic growth.

Also included on the agenda is Severin Borenstein, director of the University of California Energy Institute at Berkeley, who will provide observations about recent research gauging the effect of increasing the RPS on operations, costs and GHG emissions, according to LHC. Borenstein will also provide recommendations on how to most efficiently and effectively achieve the state’s goals on global warming.

Some Democratic lawmakers and environmentalists have criticized the LHC report as one-sided and alarmist, claiming that it should not be used by industry or other stakeholder groups to help weaken California’s clean-energy and GHG-reduction policies.

Just last week, Assemblyman Wes Chesbro (D-Arcata), chairman of the Assembly Natural Resources Committee, criticized the report while voting against a Republican-authored and LHC-sponsored bill requiring CEC to prepare a report assessing the effects of specific clean energy and GHG-reduction policies on electric reliability and rates, including whether they are achieving environmental and economic goals (Inside Cal/EPA, April 11).

Representatives of The Greenlining Institute and Natural Resources Defense Council are also scheduled to speak during the April 24 LHC hearing.