California eyes Northeast efforts to cut GHG emissions

San Francisco (Platts)--23Feb2006

A key advisor to Gov Arnold Schwarzenegger said California is closely
watching East Coast efforts to combat climate change as the state develops its
own plan to reduce greenhouse gas emissions.

     The Climate Action Team and the California Environmental Protection
Agency are poised to release a final plan to slash GHG emissions within the
next week. The plan will likely include recommendations to develop a
cap-and-trade program.

     Terry Tamminen, environmental and energy advisor to the governor, said
developing a cap-and-trade program will take a lot of work. The advisor, a
former Cal-EPA secretary, helped craft the GHG report.

     "These are not simple things to work out. We are waiting to see how [the
Regional Greenhouse Gas Initiative] process finally sorts itself out in the
Northeast," Tamminen said in an interview. That initiative would require CO2
cuts from about 100 power plants in seven Eastern states.

     "There's a lot of work to do in this arena to make this a useful tool,
and nobody claims to have the answers today," he added. The aim is to create a
system with credits that could be traded, even internationally, he said.

     Like the draft report, the final version likely will call for a charge on
gasoline. Tamminen said the charge would be distinct from a tax. The funds
would be used for research and development projects and other strategies to
reduce GHG emissions, he said.

     A charge on gasoline is an idea that "people will debate hotly"; how that
ought to be spent, how much ought to be collected and whether it should be
collected at all, said Tamminen.

     Tamminen has also played a key role in crafting the governor's Million
Solar Roofs Initiative. After a bill advancing the plan stalled in the
Legislature in 2005, the California Solar Initiative adopted by the Public
Utilities Commission in January incorporated most of its elements. The plan
aims to add 3,000 MW of solar power over the next decade.

     Meanwhile, California's renewables mandate program is running into
problems. Southern California Edison recently said six out of eight renewable
contracts it signed in 2003 will not be available in 2010, as expected. In
2004, two of the state's investor-owned utilities fell short of annual
renewable targets.

     Tamminen said the governor is more focused about "the big picture" on
renewables than targets. The mandate requires that 20% of investor-owned
utilities' electricity come from renewables by 2017. Pending legislation would
accelerate that goal to 2010.

     The governor is not just concerned with meeting targets set by law but
with "being focused more on sustainability of the state and weaning California
off of fossil fuels, making it more energy independent and more energy
reliable," said Tamminen.

     Renewables such as solar power tend to be distributed to where they are
needed. This tends to make solar more reliable, said Tamminen.

     The Los Angeles Dept of Water and Power's commitment to increasing
renewables is another good sign, said Tamminen. Municipal utilities do not at
this point need to meet the renewables mandate, yet the muni is cooperating. 
LADWP's move could be the "tide that lifts all boats," said Tamminen.

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