Will Governor Arnold Really Clear The Air on Energy?
- Jun 10, 2015 3:55 pm GMT
The truth is the only way for Gov. Arnold to transform his surprisingly idealistic energy platform into reality will require California to radically reverse course in Sacramento. And that means moving toward a system that truly encourages cleaner supply choices. If Schwarzenegger somehow could enact an honest, enlightened form of deregulation, he would truly be a superhero among energy policy wonks. But that is a mighty big if.
With some validity, Davis pointed his finger at the Bush administrations for allowing Enron and others to rip off California consumers under California ill-fated experiment with open electricity markets. Yet Davis also revealed his worst flaw during the energy crisis: an oversupply of caution. He waited way too late to act. Then -- to add insult to injury his underlings locked into $40 billion of fossil fuel supply just before prices in Californias power market dropped down to reasonable levels.
To keep us on the hook for these bad investments, the Davis administration has been inching back toward a regulated model, shifting more and more responsibilities back to the states three private utilities including Pacific Gas & Electric (PG&E). The policy rationale, also valid, is that we all must bear the pain of past mistakes. If Gov. Arnold really wants to follow through on his un-Republican mandate that half of all new homes built in California rely upon solar photovoltaics (PV) for their electricity by 2005, he will indeed have to terminate not expand -- the hold the PG&E s of the world have on our lives. If he really wants to trump a law Davis signed requiring California to double its renewable energy sources from 10 to 20 percent by 2020 -- and instead increase the mandate to 33 percent -- then some radical changes will need to be made in the governance of electricity in California.
The truth is both regulated monopolies and open markets have their upsides and downsides. If deregulation means large businesses escape paying for the high-priced power supply contracts Davis authorized and small consumers get stuck with the tab, then Schwarzenegger may be the next candidate for a recall. But if Schwarzenegger can use the force of his personality to somehow work with the Bush administration to renege on the fossil fuel contracts and open up Californias market to solar PV and other renewable power sources, he will make history.
Californias current hybrid reactive approach to energy regulation is not working for the economy or the environment. Private utilities have proven that they are not effective purveyors of energy efficiency in todays bottom-line driven power markets. The only bright spot in California on the electricity front has been solar PV small silicon semi-conductors that transform sunlight into electricity. Over half of the solar installed in the nation last year occurred in California.
Yet less than 1 percent of the states electricity comes from distributed solar PV, even though this renewable energy technology is ideal for California. We need the power most when the sun shines during hot summer afternoons. Why not use the same sun to create the electricity to run our air conditioners? Solar PV also addresses the terrorist threat. A distributed network of solar systems scattered throughout a grid is a lot safer than a grid featuring large centralized terrorist targets, such as nuclear power plants. But the cost of solar PV is still too high and private utilities such as PG&E want to keep it that way. PG&E and its fellow private utilities are also frustrating efforts to add other renewable energy sources to the states power plant portfolio, despite recent legislation and surges in natural gas prices that make fixed-price renewable energy sources look more attractive than ever.
If California were to follow through on what Gov. Arnold proposed during his campaign, billions of dollars in clean energy investment would flow into this state. Schwarzeneggers bold goals on clean energy outlined in his campaign literature are incredibly naïve. His call for deregulation is brave and foolish and borders on political suicide given the energy politics of Sacramento. But if Gov. Arnold can use his personality and create some bridges with progressives concerned about our environment, California just could resurrect its now soiled reputation as a pioneer when it comes to renewable energy sources.
The last deregulation bill was a political deal that gave a little to every special interest group, but also opened our wallets to the now defunct Enron, which has some ties to the Schwarzenegger camp. The trick for Gov. Arnold is to encourage innovation with solar and other renewable resources, while protecting small consumers from the greed that plunged California into a crisis on energy in the first place.
An enlightened energy regime could be in the works, a pleasant surprise for those of us who have watched in horror over the last several years as California lost its luster in the eyes of the world. But Gov. Arnold may have raised expectations with such lofty goals and may by digging his own grave if he blows it, handing the issue of the states energy policy right back to Democrats.
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