Ralph Cavanagh, NRDC, 415.875.6100 or 415.722.5654 (mobile); Erika Brekke, NRDC, 415.875.6100
SACRAMENTO (September 29, 2006) -- Governor Arnold Schwarzenegger today signed the Greenhouse Gas Emissions Performance Standard Act (Senate Bill 1368) by Senate President pro Tem Don Perata. (D-East Bay). This bill ensures that future long-term investments in electricity generation for California comes from sources that emit low amounts of carbon dioxide and other heat-trapping gases. The bill puts the legislature in firm support of a policy already endorsed by California's principal energy regulators.
SB 1368 establishes a greenhouse gas (GHG) performance standard applicable to "baseload" generation resources seeking extended access to California markets. These are the workhorse power plants that are designed to meet electricity needs around the clock. The new standard prohibits any more long-term investment in these facilities unless their air emissions are as low, or lower, than emissions from a clean and efficient natural gas power plant. This policy first appeared in the governor's November 2005 Integrated Energy Policy Report, authored by the California Energy Commission.
"As California and the nation move toward a clean energy economy, the financial risks from new investments in dirty energy will be too high," said Sheryl Carter, director of Western energy programs for the Natural Resources Defense Council (NRDC), which sponsored the legislation. "This bill will protect California consumers from hundreds of millions of dollars in extra costs by requiring utilities to place their long-term bets on clean energy sources."
Dozens of new conventional coal-fired power plants (at least 31 by most counts) are in the planning and development stage throughout the West, many aiming to sell their power to California. The state's utilities are devising long-term plans to purchase new energy that include literally billions of dollars in investments over the next decade. Depending on how those investments are made, they could generate electricity and global warming emissions for the next forty years or longer. This bill doesn't say "no" to electricity from coal, but it puts the coal industry on notice that it needs to use much cleaner and more efficient technologies if it wants California financing.
Further investment in highly polluting technologies will prevent California from meeting its global warming emissions reduction targets under the Global Warming Solutions Act (AB 32) and will expose utility customers to significant financial risks from future federal regulation, according to NRDC. Gov. Schwarzenegger has also signed this bill.
SB 1368 is a key part of this year's California global warming legislative package. Together with AB 32, it sets California firmly on a path to a clean energy future, while protecting California's economy from future regulatory costs.
"SB 1368 forces power companies and utilities to line up long-term contracts for energy that meet strict greenhouse gas emission standards," said Perata. "This measure, along with AB 32, which aims to reduce greenhouse gases discharged by industry, puts California light years ahead of the rest of the world -- where we ought to be when it comes to smart stewardship of the environment."
SB 1368 was supported by utilities and power generators, including PG&E, Southern California Edison, Calpine and Constellation.