SACRAMENTO — A measure that would require utilities to have 20 percent of their electricity produced from renewable sources passed a key legislative committee Monday.
The bill, by Sen. Byron Sher, D-Stanford, gives the utilities until 2017 to meet that threshold, increasing the requirement each year until then.
“A diversity of sources of energy in California is essential for reliability,” Sher said.
Environmental groups have warned the state is becoming too dependent on natural gas-fired power plants, leaving it vulnerable to price spikes if that commodity becomes scarce.
Sher’s bill, and a companion bill that allows funds raised by a public goods charge to be used to help offset the higher cost of renewable energy, were approved by the Assembly Utilities and Commerce Committee after languishing there for a year.
Gov. Gray Davis praised lawmakers for moving the bill, saying it would cut the state’s dependence on aging, inefficient and pollution-producing power plants, reducing pollution and greenhouse gas emissions.
“California is the nation’s leader in renewable energy —and we intend to keep that title,” Davis said.
Julia Levin, of the Union of Concerned Scientists, said the bill was “great for consumers, it reduces air pollution, it creates jobs.”
Southern California Edison supported the bill, but it was opposed by the state’s other two investor-owned utilities, Pacific Gas and Electric Co., and Sempra, which owns San Diego Gas & Electric Co.
Under the bills, utilities would be able to receive money from a fund supported by a 3 percent surcharge on electricity bills. The public goods charge goes toward renewable energy, conservation and efficiency research, and rebates for energy efficient products.
Sher’s bills allow the funds to also help utilities offset the higher cost of renewable energy, which will those costs from being passed on to consumers.
“That’s the incentive,” said Levin. “The problem in the last few years has been there’s been no market for renewables. Clearly, we need both incentives and a requirement.”
The bill requires the PUC to find utilities in contempt if they don’t meet the minimum standards.
If alternative energy providers, also called direct access providers, are allowed to continue in California, they will also be required to buy at least 20 percent renewable energy. The Public Utilities Commission has the final say on whether those providers will be allowed to take on new customers.
Currently, customers cannot sign up for direct access service because state regulators were concerned that too many customers were fleeing the utilities, leaving the state with a large power debt.
The bill setting the 20 percent threshold was also approved by the Assembly Natural Resources Committee later Monday. Both bills will now be heard in the Assembly Appropriations Committee.