California Energy Commission Promotes Clean Electricity Under Landmark Global Warming Law

New Rules for Municipal Utilities Will Help State Meet Pollution Reduction Goal and Prevent Long-Term Investments in Dirty Coal Generation, Says NRDC
SACRAMENTO (May 23, 2007) – The Los Angeles Department of Water & Power, Sacramento Municipal Utility District, and other municipal utilities in California will have to make long-term investments in clean electricity generation under new regulations adopted today by the California Energy Commission. The rules are required under the state’s landmark Greenhouse Gas Emissions Performance Standard Act and will help California achieve its ambitious goal of reducing global warming pollution by 30 percent by 2020.
“By ensuring that utilities make long-term commitments to clean energy sources, the state is protecting our economy and environment from the effects of global warming,” said Audrey Chang, a staff scientist with the Natural Resources Defense Council. “The new rules also will shield utilities’ customers against hundreds of millions of dollars in extra costs from regulation of global warming pollution. That means lower electric bills in the long run.”
The CEC requirement comes on the heels of similar rules for the state’s investor-owned utilities, like Pacific Gas & Electric and Southern California Edison, which were adopted on January 25 by the California Public Utilities Commission. The two commissions’ actions taken together mean that all the state’s utilities, whether privately or publicly owned, will have to invest in electricity sources that emit low amounts of carbon dioxide and other heat-trapping pollution.
Further investment in highly polluting technologies would prevent California from meeting its global warming emissions reduction targets under the Global Warming Solutions Act (AB 32), for which enforcement begins in 2012. California’s utilities are presently devising long-term plans to purchase new energy that involve billions of dollars in investments over the next decade, decisions that will last 40 years or longer.
“In many respects the Greenhouse Gas Emissions Performance Standard Act will have a more immediate effect than California’s other global warming pollution reduction legislation,” the NRDC’s Chang said. “That’s because it’s affecting decisions being made right now and preventing utilities from locking in long-term contracts for dirty power. We applaud Senator Perata’s leadership in authoring this legislation and ensuring that this standard protects everyone in California.”
The global warming emissions performance standard is applicable to any of the workhorse power plants –  or “baseload” generation – that supply electricity around the clock, no matter if those plants are inside California’s borders or not. It prohibits additional long-term investment (of five years or longer) on behalf of California consumers in these facilities unless their emissions of global warming pollution are as low, or lower, than emissions from a clean and efficient natural gas power plant. The maximum emissions of a power plant allowed under the CEC and CPUC regulations are 1,100 pounds of carbon dioxide per megawatt hour of electricity.
Dozens of new conventional coal-fired power plants are in the planning and development stage throughout the West, many aiming to sell their power to California. The new regulations do not rule out electricity from coal, but rather send a clear signal to the industry that it needs to use much cleaner and more efficient technologies if they hope to receive California financing, according to NRDC.
According to the CEC, about 21 percent of electricity consumed in CA comes from coal. A conventional coal-fired power plants emits about twice the global warming pollution of a typical combined cycle natural gas plant. In order for long-term investments in electricity from a coal-fired power plant to qualify under the new standard, it would have to be generated using technology known as “carbon capture and sequestration,” in which the carbon dioxide gas would be captured and stored underground instead of being released into the atmosphere.
As further evidence of California’s global warming leadership being felt around the world, on May 3 Washington Gov. Chris Gregoire signed into law a bill modeled on California’s SB 1368. And on February 26, the governors of California, Washington, Oregon, New Mexico and Arizona signed a pact entering into a Western Regional Climate Action Initiative to implement joint solutions to reduce global warming pollution.