San Francisco (Platts)--12Oct2009/628 pm EDT/2228 GMT

California Governor Arnold Schwarzenegger on Monday signed a memorandum of understanding with US Secretary of the Interior Ken Salazar that it is hoped will speed up the siting of renewable energy projects.

Under the agreement with the US Department of the Interior, which the governor characterized as the first-of-its-kind, Interior and the California Natural Resources Agency will create maps of the best areas for development and conservation to help expedite project siting and habitat protection.

The MOU also aims to spur identification of transmission corridors by December 2010 and includes the US Department of Defense in the process, because some lines may cross DOD lands, the governor said.

On Sunday, Schwarzenegger signed a bill that aims to reduce disproportionately high rates for large users of electricity in California by eliminating the current rate freeze for smaller customers.

The bill, S.B. 695, was proposed by Senator Christine Kehoe and also authorizes a limited expansion of retail choice, or direct access, which was suspended during the state's 2001 energy crisis.

While the tiered rates approach was meant to shield lower-usage customers from high rates, it had the unintended consequence of shifting higher rates to large users, even small homes with many residents, according to Kehoe.

Kehoe's bill would place an annual cap of roughly 5% on rate increases for most residential customers.

Deemed urgent, S.B. 695 will be enacted immediately.

Schwarzenegger also signed a net metering bill that caps the amount of surplus power from wind or solar resources that investor-owned utilities must buy at 2.5% of said utility's aggregate peak demand.

Introduced by Assemblyman Jared Huffman, S.B. 920 requires that the California Public Utilities Commission set "just and reasonable" compensation for surplus energy sales and ensure that the net-metering program does not result in a cost shift to customers who are not participating in the scheme.