Greater Irvine Chamber Joins Coalition Opposing Bill on California Renewables Portfolio Standard
Friday, April 23, 2021
The Greater Irvine Chamber joins the California Chamber of Commerce and other organizations to oppose SB 67, as amended, which would risk substantially increasing rates by revise the California Renewables Portfolio Standard (RPS) to incorporate an every-hour newly defined “clean energy” standard.
Alters RPS Goals Before the Agencies Determine Appropriate Scenarios
Current law requires that all retail sales of electricity meet renewable energy standards on the following schedule: 44% by 2024, 52% by 2027, and 60% by 2030. Just a few years ago, the legislature enacted SB 100 (DeLeón, 2017), which requires utilities to achieve 100% renewable and/or zero carbon energy by 2045. This bill would again alter the RPS standard, requiring 85% of retail sales annually by 2030 and 90% of retail sales annually by 2035 be from zero carbon “clean energy” sources.
Imposes Substantial Cost Increases
The California Public Utilities Commission forecasts rate increases between 35 to 47% over the next ten years. This is on top of the approximately 102% in nominal dollar rate increases between 2008 and 2018 noted by the Assembly Utilities and Energy Committee in a 2020 oversight hearing entitled “Electricity Prices Matter”. As indicated by the Legislative Analyst’s office in a 2020 report entitled “Assessing California’s Climate Policies-Electricity Generation”, high electricity prices could be a barrier to greenhouse gas emissions reductions in other sectors.
With respect to SB 100, the California Energy Commission, the California Public Utilities Commission, and the California Air Resources Board just completed their SB 100 Joint Agency Report, which examined the feasibility and costs of implementing multiple renewable and zero carbon scenarios. That report was prepared to “assess barriers and opportunities to implementing the 100 percent clean electricity policy.” As part of that report, the agencies evaluated core scenarios—those that are within the scope of SB 100 and using real world data, and alternative scenarios. In connection with the core scenarios, the agencies found that in order to meet our SB 100 goals, we are already looking at approximately a 6% rate increase (over the rate increases listed above for other ratepayer-billed expenses). Alternative scenarios ranged from an additional 1-6% increase in rates, with up to approximately 12%, or $8 billion in rate increases being shouldered by California ratepayers.
As the Air Resources Board undertakes its Scoping Plan process, due to be released in the Spring, the legislature should take caution in directing market signals toward certain resources through legislation, especially before the full costs of implementation are fully studied. SB 100 should move forward using the most cost-effective scenario that allows us to meet our 2045 goals. If the California legislature wants to engage in market signaling, it should do so through a market, not through what will end up in essence a bill requiring procurement and building of specific additional new resources.
As noted by the Commission to the Legislature last year, increasing electricity prices could slow transitions in other sectors that are necessary to address climate-related impacts and impose an increasing economic burden on ratepayers. The electricity sector has been the primary driver of statewide GHG emissions reductions, but the cumulative rate impact of such programs continues to grow. Altering the RPS in the manner proposed by SB 67 risks significant increases to the already high costs that will be incurred to meet our SB 100 goals.
Category: Legislative News, Government Affairs, Greater Irvine Chamber, California, Environment