New PUC Rule Targets Global Warming Emissions

State Officials Move to Ensure Utility Investments Will Flow to Clean Energy, Implementing Landmark Statute
SAN FRANCISCO (January 25, 2007) – The California Public Utilities Commission (CPUC) today adopted rules that will ensure new long-term investments in electricity generation for California come from sources that emit low amounts of carbon dioxide and other heat-trapping emissions. These rules implement the nation’s first electric generation performance standard for global warming pollution. CPUC President Michael Peevey and the other commissioners voted unanimously to approve strong rules, effective and enforceable immediately, for implementing the Greenhouse Gas Emissions Performance Standard Act (Senate Bill 1368, Perata), signed by Governor Arnold Schwarzenegger this fall.
“The CPUC has established clear rules that will help give utilities business certainty on the investments needed to provide clean, reliable energy to California families and businesses,” said Audrey Chang, staff scientist at the Natural Resources Defense Council (NRDC). “We commend the CPUC, and President Peevey in particular, for their leadership in establishing this policy. By ensuring that utilities make long-term commitments to clean energy sources, the commission is shielding California families against hundreds of millions of dollars in extra costs associated with future regulation of global warming 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) and would expose utility customers to significant financial and reliability risks from future federal regulation.
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 forty years or longer. 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 rules 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. 
The new 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 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. This policy was first embraced by the CPUC in an October 2005 Policy Statement and later codified by SB 1368.
SB 1368 required the CPUC to begin enforcement of the global warming emissions performance standard for California’s investor-owned utilities by February 1, 2007. The California Energy Commission is required to begin enforcement of the standard for the state’s municipal utilities by June 30, 2007 and is currently developing its rules to do so.