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CITY OF GLENDALE CALIFORNIAREPORT TO CITY COUNCIL
October 21,2008
AGENDA ITEM
Report: Opposition to Proposition 7- Renewable Energy Generation Initiative Statute
1. Resolution Opposing Proposition 7 - Renewable Energy Generation Initiative Statute
COUNCtL ACTION
Public Hearing, I~:dinance I J
Approved forDe k 'ZV2et8Consent Calendar I
calendar
Action Item IX J Report Only [ J
ADMINISTRATIVE ACTIONSignalure
Approved , .James E. Starbird, City Manager ::,:;:..;:...J..~~~:;;tJ=:\=-
SubmittedGlenn O. Steiger, General Manager - GWP ~~:I.l.!,""'''-<',.Le&~J.l."'
PreparedSteven G. Lins, Assistant General Manager - Supply ~.-S~.-""'''''''!K2F''''
ReviewedScott H. Howard, City Attorney "--~_~=::; ;;."L~-'==~
RECOMMENDATION
It is recommended that the City Council oppose Proposition 7 - Renewable Energy Generation InitiativeStatute.
SUMMARY
Proposition 7 makes anumber of changes regarding Renewable Portfolio Standards (RPS) and the permitting ofelectricity generating facilities and transmission lines. Primarily, the measure:
• Establishes additional, higher RPS targets for electricity providers• Makes RPS requirements enforceable on publicly owned utilities (POUs)• Changes the process tor detining "market price of electricity"
8 A
Opposition to Prop 7 - Renewable Energy Generation Iniliative StatuleOclober 21, 2008
Page 2of 7
• Changes the cost cap provisions that limit electricity provider obligations under the RPS• Expands scope of RPS enforcement• Revises RPS-related contracting period and obligations• Sets a lower penalty rate in statute and removes the cap on the total penalty amount for failure to meet RPS
requirements• Directs the use of RPS penalty revenues• Expands Energy Commissions permitting authority
Proposition 7 proposes the following mandates on California's electric utilities:
• Increase the State's RPS requirements to the following (including all POUs):
20% by 201040% by 202050% by 2025
• Arequirement for all utilities to add at least a2% renewables per year• Caps ratepayer costs at 3% above the market price of power• Establishes apenalty of 1cent per kWh for any "retail seller' not meeting the established RPS goals in any
one year• Shifts generation and transmission permitting duties and the calculation of market price referent from the
California Energy Commission (CEC) to the California Public Utilities Commission (CPUC)• Deletes POUs' current exemption from the definition of "retail seller'• Indirectly ties POUs to the CPUC's regulations on RPS programs based on the definition of "retail seller'
• Indirectly ties POUs to the CPUC's section on penalties. (CPUC's section on assessed penalties states thatit cannot be passed on to the consumers. Thaf is nof possible for POUs who have no shareholders.
FISCAL IMPACT
Estimate of Net State and Local Government Fiscal Impact
• Increased state administrative costs of up to $3.4 million annually for the regulatory activities of the CaliforniaEnergy Resources Conservation and Development commission and the California Public Utilities Commission,paid for by fee revenues.
• Unknown impact on state and local government costs and revenues due to the measure's uncertain impact onretail electricity rates. In the short term, the prospects for higher rates - and therefore higher costs, lower salesand income tax revenues, and higher locai utility tax revenues - are more likely. In the long term, the impact onelectricity rates, and therefore state and local government costs and revenues, is unknown.
• If approved by State voters, Proposition 7 will negatively impact GWP's electric operations and will havesignificant financial implications and challenges for GWP and GWP ratepayers.
Opposilion 10 Prop 7- Renewable Energy Generation Iniliative SlalUlaOctober 21, 2008
Page 3017
BACKGROUND
Proposition 7, Ihe Solar and Clean Energy Iniliative is a measure thai has qualilied tor Ihe November 4, 2008General Eleclion 8allol through asuccesslul signature circulation process.
Current Slate law (S8 1078 adopled in 2003) allows the governing board of a publicly owned ulility (i.e. CilyCouncil) 10 implement and enforce ils own RPS. On December 16, 2003, Ihe City Council approved a 10%expansion at the RPS by 2010 and a20% expansion by 2017 for GWP. This RPS will be reviewed as part ofthe Inlegrated Resource Plan now underway and options for revising GWP's RPS will be included in the plan'srecommendation.
Current Siale RPS law for Inveslor Owned Utililies (IOUs) (S8107 adopted in 2006) further accelerated fhe S81078 goal by stipulalinglhat 10Us must expand their renewable portfolio by 1% each year until reaching 20% in2010.
Renewable Energy Generation -Iniliative Stalule
• Required ulililies, including government-owned ulililles, to generale 20% of their power from renewableenergy by 2010, aslandard currently applicable only to provide eleclrical corporations.
• Raises requirement for ulilities 10 40% by 2020 and 50% by 2025.• Imposes penalties, subject to waiver, for noncompliance.• Transfers some jurisdiclion of regulatory mailers from the Public Ulililies Commission 10 Ihe Energy
Commission.• Fast-Iracks approval for new renewable energy plants.• Requires ulilities to sign longer conlracls (20-year minimum) 10 procure renewable energy.• Creales accounl to purchase rights-of-way and facilities for the Iransmission of renewable energy.
Many experts and environmentalists stale Ihal the inlent of Proposilion 7 to increase renewable energy in IheSiale of California is commendable. However, the measure is so complicaled and poorly wrillen Ihat many feelthai this measure would hurt ralher than help the cause of renewable energy in the stale. For example, manyimportanl taclors were not considered when Ihis iniliative was cratted, such as adequacy of Iransmissioninfraslructure and the cosls associated wilh renewable resources. In addition, in order 10 overturn existing RPSlegislalion approved in 2006, il would require a two-Ihirds vole of Ihe California Legislalure 10 do so. II isbelieved thai if Proposilion 7 passes, that il will lead 10 chaos in our regulalory processes and many years oflitigation.
The official commillee opposing Prop. 7 is called Californians Against Another Costly Energy Scheme.Entities opposing Proposilion 7 are:
Environmental groups Renewable energy providers Cities
Aclerra: Action for aSustainable Earth Bright Source Energy Cily of Agoura Hills
Alliance for Responsible Energy Policy
California League of Conservation Voters
California Solar Energy Industries As: Cily of Alhambra
Cily of Blythe
Opposition to Prop 7- Renewable Energy Generation Initiative SlatuteOctober 21, 2008
Page 4 of 7
Cenler for Energy Efficiency and Renewable Techno California Wind Energy Association City of Burbank
CE Generalion City of Cathedral City
Climate Protection Campaign
Endangered Habitats League
Environmental Defense Fund
Environmental Enlrepreneurs
Greenlining Institute
Cleantech America
enXco
GreenVolts
First Solar
Fortistar
City of Claremont
City of Clovis
City of EI Monte
City of Indian Wells
City of La Puente
Natural Resources Defense Council
Orange County Coastkeeper
Independent Energy Producers Associ, City of La Verne
City of Montebello
San Jose Conservation Corps
Sierra Club California
Trees for Seal Beach
Union of Concerned Sclenlists
Vote Solar Initiative
World Wide Green Corps
Consumer groups
California Alliance for Consumer Protection
Consumers Coalition of California
Consumer Federation of California
Consumers First, Inc.
Citizens Against Regulatory Excesses
Horjzon Wind Energy
Large-Scale Solar Association
OptiSolar Inc.
Phat Energy
POCO Solar Energy Inc.
Pure Energy Systems, Inc.
PPM Energy
SCHon Solar
Solahart All Valley
Solarecity Electric
Solar Millennium, LLC
Solar Monkey
SolarWorld California
Solei Inc.
Sun Light & Power
Sun Miner, LLC
Sun Power
The Solar Alliance
City of Monterey Park
City of Morgan Hill
City of Pasadena
City of Porterville
City of Rosemead
City of Seal Beach
City of South EI Monte
City of TusHn
Local governments
League of California Cities
California State Association of CounJ
California Special Districts Associath
Opposition 10 Prop 7- Renewable Energy Generation Initiative StaMeOctober 21,2008
Page 5 of 7
Political organizations Labor
California Democratic Party American Federation of State, County and Municipal Employ,
California Republican Party
California Republican AssemblyCalifornia Coalition of Utility Employees
California Republican LeagueCalifornia Labor Federation AFL-CIO
California Young DemocratsContra Costa Building and Construction Trades Council
California Log Cabin Republicans
Green Party of California
Maria Elena Durazo, Los Angeles County Federation of Labc
Executive Secretary- Treasurer
International Brotherhood of Electrical Workers, Local 1245Libertarian Party of California
IBEW Local 18The Peace & Freedom Party of California
IBEW Local 47Los Angeles County Lincoln Clubs
IBEW Local 465Placer County Republican Party
IBEW Local 1245Republican Party of Los Angeles County
IBEW 9th DistrictRepublican Party of Tulare County
San Diego County Democratic PartyState Building and Construction Trades Council of California
Solano County Republican Party
Young Republican Federation of California,
Sacramento Chapter
Taxpayer groups Ethnic groups Faith-based organizations
Minister Eddie Pierson, Academic Upr
Signal Hill
The Salvation Army, Southeast Corps
Huntington Beach
American GI Forum of California
Asian Americans in Commercial F\Protection Committee
California Taxpayers'
AssociationAsian Business Association, Los
The California Taxpayer Angeles
Sacramento County
Taxpayers League
Estate
Asian Business Association of On
Reverend Eric P. Lee, Southern Chris
Leadership Conference, Los Angeles
Kern County Taxpayers County
AssociationBarstow Hispanic Chamber of
Progressive Jewish Alliance
Alameda County Taxpaye Commerce
Opposition to Prop 7 - Renewable Energy Generation InitiaHve StatuteOctober 21, 2008
Page 6 of 7
Raoul Wallenberg Jewish Democratic Club
Association Black Chamber of Commerce of Utilities
Alliance of Contra Costa Orange County
Orange County Taxpayer Commerce
Taxpayers
Association
California Black Chamber of
California Hispanic Chamber of
California Municipal Utilities Association
Sacramento Municipal Utility District Board of
Directors
CommerceContra Costa TaxpayersPG&E Corporation
Association Filipino American Chamber of Sempra Energy
Humboldt Taxpayer's Lea Commerce of Orange County Southern California Edison Company
Korean Heath Education Informati Business
Inland Empire Taxpayers and Research Center
AssociationCalifornia Chamber of Commerce
Latin Business Association
Lafayette Taxpayers
Association
Mexican American Political
Association
California Council for Environmental and Econ
Balance
CommerceSutter County Taxpayers
League of Placer County
Taxpayers
San Diego Tax Fighters
California Manufacturers & TechnologyNational Council of Negro Womer
AssociationHigh Desert Section
California Retailers AssociationOrange County Hispanic Chambel
California Small Business Action Committee
Association Regional Hispanic Chamber of California Small Business Association
Valley Taxpayers' Coalitic Commerce California Small Business Roundtable
Inc. RepUblican National Hispanic California Business Properties Association
Ventura County Taxpayer Assembly of Greater L.A.
Association
Waste Watchers, Inc.
Senior groups
California Business Roundtable
Tulare Kings Hispanic Chamber o'California Grocers Association
Commerce
California Retailers AssociationUnited Cambodian Community, In
Americans
California Alliance for RetVictor Valley African American
Chamber of Commerce
California Senior Advocat C" d 'IVIC an community
League . t'orgamza IonsCongress of California
Seniors Southern California Water Commi
Public safety Committee, Inc.
Opposition to Prop 7 - Renewable Energy Generation Initiative StatuteOctober 21, 2008
Page7017
Association
Rio Hondo Community DevelopmlCalifornia State Firefighte
Corporation
Los Bomberos de Los
Angeles
Tenant Associations Coalition Poli
Action Committee
East Los Angeles Boys &Girls Cll
GrassRoots Community Network
Connecting Communities
Rosamond Community Services
District
San Francisco Planning and Urbal
Research
Southeast Community Developme
Corporation
Total Education Solutions, South
Pasadena
If approved, Proposition 7 will eliminate the ability of this community to decide the timing and cost impactsassociated with the "greening" of ifs energy portfolio. This measure violates the City's legislative principle ofpreserving local control of the City's utility to the City Council by making POUs subject to the jurisdiction of theCEC and the CPUC.
Therefore, it is recommended that the City Council support Glendale Water & Power in opposing Proposition 7 Renewable Energy Generation Initiative Statute.
EXHIBIT(S)
(n/a)
RESOLUTION NOo _
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GLENDALE,OPPOSING A STATEWIDE BALLOT INITIATIVE, PROPOSITION 7, TO REQUIRE
GOVERNMENT-OWNED UTILITIES TO GENERATE 50% OF THEIR POWERFROM RENEWABLE RESOURCES BY 2025
WHEREAS, cutTent State law allows the governing board of a publicly owned utility(i.e. City Council) to implement and enforce its own Renewable Portfolio Standard ("RPS"); and
WHEREAS, on December 16, 2003, the City Council approved a 10% expansion of theRPS by 2010 and a 20% expansion by 2017 for GWP; and
WHEREAS, current State law for Investor Owned Utilities ("IOUs") further acceleratedthe RPS goal by stipulating that IOUs must expand their renewable portfolio by 1% each yearuntil reaching 20% in 2010; and
, WHEREAS, Proposition 7, the Renewable Energy Generation Initiative Statute wouldrequire Glendale to generate 20% of their power from renewable energy by 201 0, 40% by 2020and 50% by 2025; and
WHEREAS, the measure is complicated and so poorly written that many feel that thismeasure would hurt rather than help the cause of renewable energy in the state; and
WHEREAS, many factors were not considered when the initiative was drafted, such asadequacy of transmission infrastructure and the costs associated with renewable resources; and
WHEREAS, there is a long list of entities opposing Proposition 7 including cities,environmental groups, utilities, businesses, and OtlICTS; and
WHEREAS, Proposition 7 would eliminate the ability of this community to decide thetiming and cost impacts associated with the "greening" of its energy portfolio; and
WHEREAS, this measure violates the City's legislative principle ofpreserving localcontrol of the City's utility to the City Council by subjecting the City of Glendale to thejurisdiction of the California Energy Conunission and the California Public UtilitiesCommission.
11111
11111
8 A T
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THECITY OF GLENDALE, CALIFORNIA, that the Council hereby expresses its opposition tothe Renewable Energy Generation Initiative Statute, (Proposition 7) on the November 4, 2008general election ballot.
The City Clerk shall certify to the Adoption of this Resolution.
Adopted by the Council of the City of Glendale on this day
MayorATTEST:
City Clerk
STATE OF CALIFORNIA )) SS.
COUNTY OF LOS ANGELES. )
of October, 2008.
I, Ardashes Kassakhian, City Clerk of the City of Glendale, hereby certify that theforegoing Resolution No. was adopted by a majority vote of the Council ofthe City of Glendale, Califomia, at a regular meeting held on the day of______ 2008, and that the same was adopted by the following vote:
Ayes:Noes:Abstain:Absent:
City Clerk
A!'IlROVED AS TO FORMC ..~,R ------------- :>
CITY ATfORNEY
nATE /c-/.. -"p 9'