Tuesday, October 21, 2008

prop 7's giving me fits

During a slow period at work, I decided to research some of the initiatives that will be on the ballot in the November election. Proposition 7 is causing some consternation. That's the one that increases targets for renewable energy, but it also does a number of other things. One of the questions I find most troubling is whether it blocks or tilts the playing field against small energy producers. See, I eventually want to be able to put solar panels on the roof, use what I need, then sell the rest back to the power grid. And even more importantly, I want everyone else in sunny California doing the same thing, because that means fewer transmission lines, fewer fossil fuel and nuclear plants, fewer distribution losses, and eventually a more resilient grid. The Prop 7 opponents say small renewable generators don't count towards the power plants' renewables quota, while the proponents say the proposition doesn't rule them out. The news reports haven't actually quoted the language at issue, and I can't find the Sacramento County Superior Court ruling by Judge Michael Kenny (in which he reportedly refused to take sides). So I decided to dive into the language of the proposition itself.

Let's start at page 121 (page 42 of the PDF), section 399.11(a). It discusses the intent of the law: "to attain the targets of generating 20 percent of total retail sales of electricity in California from eligible renewable energy resources by December 31, 2010" (plus 40% by 12/31/2020 and 50% by 12/31/2025) (emphasis added). That term "eligible renewable energy resources" also shows up in the definitions of "renewables portfolio standard" (section 399.11(g) at page 122) and "renewable energy credit" (section 399.11(h) at page 122). Basically, if it's not from an eligible renewable energy resource, it doesn't count for the renewables portfolio standard and you can't get a renewable energy credit from it. The renewables portfolio standard governs what portion of renewable energy the utility (technically, any "retail seller", defined in section 399.11(i)) has to buy (sections 399.14 and 399.15). I think renewable energy credits are the currency of the carbon trading system. (Section 399.13) As a result, what constitutes an eligible renewable energy resource is crucial to this whole question.

An eligible renewable energy resource is, with a few exceptions related to hydroelectrics and waste incinerators, a "solar and clean energy facility" that meets the defintion of "in-state renewable electricity generation facility". (Section 399.11(c).)

Now we're getting somewhere.

An "in-state renewable electricity generation facility" is a kind of "facility." (Section 25741.) A "facility" includes a regulated "solar and clean energy plant." (Section 25110, as amended, at page 124) And a "solar and clean energy plant" is an "electrical generating facility using wind, solar photovoltaic, [or] solar thermal . . . technologies, with a generating capacity of 30 megawatts or more" (plus small hydro of under 30 MW). (Section 25137, at page 125.)

As a result, it's entirely plausible to me that my rooftop solar of less than 30 MW would not be a "solar and clean energy plant", so it wouldn't be a "facility", so it wouldn't be an "in-state renewable electricity facility", so it wouldn't be an "eligible renewable energy resource", so it wouldn't count for the "renewables portfolio standard" and I couldn't get a "renewable energy credit" for it. Interestingly, when I searched on some of these terms looking for definitions in California law, I came across the California Solar Energy Industries Association's site which has a similar analysis, though they bolster it with some of the intent language.

Now, counter-arguments exist, and I'm sure they came up in the Superior Court case, but since the folks who drafted California's Public Resources Code put all the defined terms in lower case, it's tricky to tell what's a defined term and what's not (and where the boundaries lie), leading to this kind of ambiguity. And frankly, the whole thing cuts too close to the line for my tastes, so as much as it galls me to do it, I think I'll most likely be voting against this proposition. And if some wrong-thinking commentator interprets that vote as a vote against renewable energy in general, well, I guess I'll just have to point him or her to this blog entry.

[Added 10/22: See the comments for more discussion. Also, see the follow-up post here.]


Anonymous said...

hey! check out my blog about prop 7 and the post "dear diggers" because i think it'll help clarify that small renewable companies aren't excluded.

furthermore, it is my understanding that Arnold's "California Solar Initiative" outlines that your excess power currently under current law cannot be counted towards the renewable portfolio of California utilities, if it is under 1MW. His is more a rebate program that Prop 7 does not touch i.e. does not exclude you from benefiting from the rebates (which are set to expire in 2009).

p.s. i also think that prop 7 is important to pass because it's a real chance for us to put a dent in global warming.

False Data said...

I think the crux of the matter may turn on what's a "facility". See my comment to your post.

As for Arnold's initiative and current law, current law is, indeed, a pain in the patoot. (Rebate programs are nice, but I'm looking for something a little more long-lasting.) However, it's a lot easier to change a law passed by the legislature than it is to change a ballot initiative.

Anonymous said...

okay, I responded with hopefully what is some further clarification. also, you're right that most faulty initiatives are hard to remedy because the only way to amend one after it has passed is to write and pass another initiative. BUT this proposition makes it easier to amend by allowing a 2/3 legislative vote on the matter. makes it easier to amend but still protects the will of the voters from over politicized representatives. sweeeet.

False Data said...

At this point, I think we may be talking at cross purposes. I'm not sure the difference between "solar and clean energy facility" and "solar and clean energy plant" is the real issue. See my reply.

I'm not sure how effective an escape hatch the 2/3 legislative vote would be. Isn't that the same threshold as for passing a budget?