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Nothing to really light up the eyes

October 23, 2008|GEORGE SKELTON

FROM SACRAMENTO — Two energy propositions on the Nov. 4 ballot illustrate the pitfalls of trying to write state laws by "citizen" initiative.

One, Prop. 10, is pitched as a measure to reduce California's dependence on foreign oil and clean the air. And it may do that. But it's also a straight-out windfall for the measure's chief sponsor and bankroller, billionaire oilman T. Boone Pickens.

The initiative would authorize $5 billion in state bonds -- $3.4 billion of it to finance rebates for the purchase or lease of alternative fuel vehicles, including those that run on natural gas. Pickens is the founder and majority shareholder of a Seal Beach company, Clean Energy Fuels, that supplies natural gas to fleets of vehicles.

State government shouldn't be providing car rebates. Leave that to the automakers. Thirty years from now, after most of the vehicles have long since been dumped in junkyards, we'd still be paying off the bonds. No taxpayer would sign up for that car deal.

For The Record
Los Angeles Times Saturday, October 25, 2008 Home Edition Main News Part A Page 2 National Desk 2 inches; 66 words Type of Material: Correction
Capitol Journal: George Skelton's column in Thursday's California section said that the Natural Resources Defense Council is one of many environmental groups that oppose Proposition 10, and that renewable energy producers and environmental groups contend that Proposition 10 would be more of a hindrance than a help in developing renewable energy. In both cases, the proposition referred to should have been Proposition 7, not Proposition 10.
For The Record
Los Angeles Times Wednesday, October 29, 2008 Home Edition Main News Part A Page 2 National Desk 2 inches; 89 words Type of Material: Correction
Capitol Journal: A correction Saturday to George Skelton's Oct. 23 column in the California section may have left the false impression that the Natural Resources Defense Council opposes Proposition 7, but not Proposition 10. The NRDC is one of many environmental groups that oppose both Proposition 7 and Proposition 10. Also, one paragraph in the column about environmental groups and renewable energy producers contending that Prop. 10 would be more of a hindrance than a help in developing renewable energy should have referred to Proposition 7, not Proposition 10.

Another $1.25-billion of Prop. 10 money would be spent for research and development of renewable energy. There'd also be some grants to local governments and colleges. Good causes. But they're only available with the Pickens pork barrel package.

Anyway, the state is b-r-o-k-e. It's no time to be launching new spending programs, especially with borrowed money.

Counting interest on the bonds, Prop. 10 would cost $10 billion, or $335 million per year.

Enough about that.

Prop. 7 is a closer call. Aimed at speeding up the evolution of renewable electricity production -- with wind, solar and other oil-free sources -- this initiative, in one respect, is ideal. There'd be no hit on the taxpayers. No tax hike. No bonds. No burden on the strapped state general fund. Any costs would be borne by utility shareholders and/or ratepayers. Users pay.

It's sweeping and complex. And that's one of its big problems for voters. Few are knowledgeable enough about the arcane subject of electricity generation to render an informed judgment on such an intricate proposal.

Problem is, of course, the governor -- any governor -- and the Legislature don't exactly have a sound record on energy policy.

Prop. 7 is the product of Arizona billionaire Peter Sperling, son of the founder of the University of Phoenix. He's apparently worried about global warming and is teamed with former San Francisco Supervisor Jim Gonzalez, a political consultant.

The opposition campaign is being funded by private utilities -- exactly why is not clear, because they're being kept in the background by strategists. Presumably, the utilities are afraid the measure would cost them money.

Prop. 7 would require utilities -- private and public -- to increase renewable electricity by at least 2% a year until it reaches 40% of their "portfolio" in 2020 and 50% in 2025.

Under current law, only private utilities are required to hit targets for renewable energy. And these marks are only 1% per year until a 20% portfolio is reached in 2010.

There's virtually no chance of achieving that 20% goal, both sides agree. Utilities collectively are currently in the 11% to 13% range.

So if the utilities can't reach 20% by 2010, the measure's critics ask, how can they be expected to hit 50% by 2025?

"We don't need more targets. We need more effort to make the targets we've already got," says Ralph Cavanagh, energy program director of the Natural Resources Defense Council, one of many environmental groups that oppose Prop. 10.

Also opposed is the trade organization that represents 80% of the renewable energy producers. They and the environmental groups contend that Prop. 10 would be more of a hindrance than a help in developing renewable energy.

"The long and the short of it is the structure of the initiative doesn't improve anything," says Jan Smutny-Jones, executive director of Independent Energy Producers. "There are problems with the existing system that may be fixable. But the initiative doesn't fix them. It creates additional problems."

One big problem today, everyone agrees, is lack of transmission lines from potential renewable-power plants. Prop. 7 attempts to answer that by giving the California Energy Commission authority to allow private utilities to build new lines. The Public Utilities Commission currently has that power.

But it is unclear whether the initiative also removes the PUC's power. So there could be dual jurisdiction, leading to drawn-out court litigation.

Prop. 7 also would fast-track the permitting of large renewable-power plants by giving the authority to the energy commission, taking it away from local governments. This is an effort to beat back "NIMBYism" -- "not in my back yard" -- but it's bound to rile citizens who fear loss of local control. More lawsuits. More potential delays in renewable energy generation.

There's another dispute about whether small renewable-power plants -- rooftop solar systems -- would count toward the targeted goals. Initiative backers say they would; opponents say they wouldn't.

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