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Solar News

California Executive Order Mandates 33% by 2020: Is it Legal?


September 16, 2009

Governor Schwarzenegger signed an executive order yesterday requiring that the utilities in California obtain 33% of all their energy from renewables by 2020. Although this is an ambitious goal, the executive order bypassed the work of the California legislature, imperiling the bipartisan support for this goal.

Creating more renewable energy is a goal on which most people agree. It is needed to reduce global warming and preserve the environment. More renewable energy may mean more high-paying jobs.  Private investment in renewable energy, on the individual homeowner level, saves money by reducing monthly bills. The major issue that generally divides politicians is how much renewable energy within what period of time-but in California, they were able to agree on the goal and the timing. The Los Angeles Times story characterized the major bones of contention:

"The two sides did not disagree about the need or the practicality of setting an ambitious 33% renewable energy target. Indeed, they concur that increasing consumption of renewable fuels would improve air quality, combat global warming and lessen dependence on foreign oil.

"Instead, the conflict was over what California should do to reach the goal and the cost of making it happen."

This has been an active few months of legislative initiatives in California on both the renewable and solar fronts. A number of bills that would increase the amount of renewable energy required have made their way through the California legislature with varying degrees of success including Assembly Bill 560, Assembly Bill 62, Senate Bill 14, and Assembly Bill 920. 

Two of these bills, AB 560 and AB 920 deal specifically with solar energy. The Sacramento Bee reports on AB 920, stating:

"The solar industry did notch one clear legislative victory last week with the passage of Assembly Bill 920 by Assemblyman Jared Huffman, D-San Rafael. The bill would obligate utilities to pay solar customers who send more power into the grid than they draw. Under current net metering rules, the best a customer can do is break even - not owe any money on a bill. The utility gets any additional power for free."

Despite the passage of AB 920, it is not clear whether it will become law. Governor Schwarzenegger has not issued a statement concerning whether or not he will sign the bill. 

The bill renewing and extending net metering failed. Environmental Leader reports on the failure of AB 560, stating:

"At the same time, the 2009 California Legislative failed to pass AB 560, a bill that would have allowed solar customers to continue benefiting from a program called net energy metering. This program enables energy customers to reduce their power bills when their small solar or wind system output exceeds their use."

The governor recently criticized the new bills coming out of the legislature, including AB 62 and SB 14, stating in a press release on the governor's website:

"Unfortunately, the bills the legislature recently passed are unnecessarily complex, would substantially increase costs on Californians and California's businesses and, if passed, the state standard could be held up in legal battles because the bills violate the U.S. Constitution's commerce clause by restricting the sale of energy across state lines."

The Christian Monitor provides a different perspective of the bills, reporting:

"The legislature's plan is more pro-labor, containing limitations supported by unions which would restrict the purchase of energy credits from outside the state. Specifically, utilities could buy no more than one-quarter to one-third of renewable energy credits from outside of the state.  The goal of the restriction is to create an incentive for investors to invest in renewable businesses in the state."

With the intentions of vetoing the energy bills, yesterday Governor Schwarzenegger signed Executive Order S-21-09 at a massive solar energy plant, bypassing the legislature's work. A description in the press release states:

"The Governor is taking action administratively today to increase California's RPS to the highest in the nation - 33 percent by 2020.

The Governor's order places the highest priority on renewable resources that will provide the greatest environmental benefits that can be developed quickly and support reliable, efficient and cost-effective electricity system operations."

Essentially, this executive order calls for the same renewable energy requirements as the bills Schwarzenegger plans to veto without providing a clear plan. The executive order delegates the task to the California Air Resources Board.  It eliminates everything that gives shape to the renewable energy bills and is effectively an order to come up with a plan, split between three bureaucratic organizations.

There are also legal issues, which could crop up later and challenge the validity of the executive order.  The Los Angeles Times reports:

"Democrats have raised questions about whether the rules would have the same binding legal effect as a law approved by the Legislature. ‘An executive order does not have force of law,' said Sen. Joe Simitian (D-Palo Alto), the author of SB 14, one of the two renewable energy bills marked for veto. An executive order and regulations could be challenged in court or overturned by Schwarzenegger's successor, Simitian added."

Instead of taking advantage of an opportunity to promote real change in energy policy, the governor has taken a step backwards.  Although his executive order strives for a 33 percent RPS, he has undermined legislators, environmentalists, labor unions and the energy companies that have worked hard and found consensus among themselves.