San Francisco (Platts)--29Aug2007

California's investor-owned utilities Tuesday said they would support a
33% renewables target by 2020 in proposed legislation only if municipal
utilities are required to meet the same target.

     The state's renewable portfolio standard requires load serving entities
with the exception of munis to obtain 20% of their energy from renewable
source by 2010. Munis are expected to set their own renewables goals. Under
new legislation (S.B. 411), the renewable mandate would be increased to 33 %
by 2020. This target is backed by of California Governor Arnold Schwarzenegger
and state regulators.

     At a climate change hearing Tuesday before state Senate Energy Utilities
and Communications Committee, Senator Joseph Simitian, who introduced the
renewable energy bill, said Pacfic Gas & Electric is urging California
Assembly Appropriations Committee Chairman Mark Leno to oppose his bill. He
asked PG&E to clarify the company's position on his bill.

     In an August 17 letter to Leno and other lawmakers, PG&E said that to
meet the state's climate goals, the 30% of the load that is served by munis
cannot be exempt from the RPS. "Programs such as the RPS that advance the
state's carbon reduction goals must include municipal utilities since they
have a carbon emission rate that is higher than investor-owned utilities due
to less aggressive energy efficiency programs and a  higher reliance on fossil
fuel, including coal, generation," PG&E said.

     California's climate law commits the state to cut greenhouse gas
emissions about 25% below 1990 levels by 2020.

     When pressed by Simitian, a PG&E official said the utility believes munis
need to be required to play by the same rules and that transmission access to
renewables needs to be improved before PG&E can back the 33% renewables
target.

     Southern California Edison and San Diego Gas & Electric officials said
they shared PG&E's views.

     Officials with municipal utilities said at the hearing that they are
aggressively pursuing renewable resources and warned that those efforts could
be harmed if they are forced to follow the same rules as investor-owned
utilities.

     The California Assembly Appropriations Committee is expected to vote on
S.B. 411 on Thursday. The bill was approved earlier by the state Senate.

		--Lisa Weinzimer, lisa_weinzimer@platts.com