Photo by Daniel R. Blume, courtesy of Wikimedia Commons

In 2005, former Governor Schwarzenegger issued an Executive Order setting a target for California to reduce greenhouse gas emissions to 1990 levels by 2020 and 80 percent below 1990 levels by 2050. At the time it was issued, the Executive Order tracked scientific consensus on the emissions reduction trajectory needed to avoid significant disruption of the climate. The Legislature subsequently enacted AB 32, the California Global Warming Solutions Act, to require the Air Resources Board to develop a plan and take sufficient action for the state to meet the 2020 target. While the Executive Order's 2020 target was enacted into law though AB 32, the force of the 2050 target and its effect on agency decisionmaking remained a source of debate until yesterday. 

In a sweeping victory for the climate and clean air, the California Court of Appeal agreed with the Sierra Club and its allies that a $200 billion auto-centric Regional Transportation Plan (RTP) by the San Diego Association of Governments (SANDAG) violated the California Environmental Quality Act (CEQA) for failing to disclose and mitigate the Plan's inconsistency with the Executive Order's 2050 targets.¹ The Court's decision is both a victory for clean air and sustainable land use and transportation in San Diego, and for all Californians, as public agencies throughout the state can no longer avoid consideration of the long-term climate impacts of their decisionmaking.

SANDAG's RTP was the first in the state to contain the Sustainable Communities Strategy required by Senate Bill 375, a state law intended to reduce greenhouse gas emissions through smarter land-use and transportation planning. Unfortunately, far from functioning to reduce emissions, SANDAG's plan front-loaded the expansion and extension of freeways at the expense of public transit, inducing sprawl and reinforcing the region's dependence on car-oriented transportation. As a result, as shown in the graph below, SANDAG's Plan would increase greenhouse gas pollution from development and transportation through mid-century, at precisely the time when dramatic reductions are necessary to avoid dangerous climate disruption. 

In its environmental review for the RTP, SANDAG refused to analyze or mitigate the project's inconsistency with the Executive Order emissions reduction trajectory on the grounds that an Executive Order is non-binding policy without the force of law. The Court of Appeals rejected SANDAG's arguments, finding that "[b]y disregarding the Executive Order's overarching goal of ongoing emissions reductions, the EIR's analysis of the transportation plan's greenhouse gas emissions makes it falsely appear as if the transportation plan is furthering state climate policy, when, in fact, the trajectory of the transportation plan's post-2020 emissions directly contravenes it."

The investment choices we make today, such as whether to widen a highway instead of building light rail or to construct a new gas plant instead of renewables and energy storage, have profound impacts on our ability to achieve the continued reductions needed to meet long-term climate goals. Instead of being swept under the rug, yesterday's Court of Appeals decision helps ensure the consequences of these choices are now fully disclosed and minimized.

¹The Sierra Club was represented by Shute, Mihaly & Weinberger LLP and brought this case with Center for Biological Diversity and Cleveland National Forest Foundation.  Attorney General Kamala Harris filed a separate action challenging SANDAG's RTP.

- Matt Vespa is an attorney with the Sierra Club's Environmental Law Program

Yesterday Southern California Edison ("SCE") announced the resources it selected to replace capacity it received from the San Onofre Nuclear Generating Station (above), a 2,200 MW nuclear facility, and once-through-cooling gas plants subject to retirement under State Water Board regulations. The Sierra Club invested a significant amount of time in the fight over how to replace San Onofre, organizing rallies, petition drives, and conducting intensive advocacy at the California Public Utilities Commission ("CPUC") to make sure that San Onofre was replaced with clean energy and not long term investments in fossil fuel plants.

The resources were solicited through an "all-source" request for offers (RFO), which allows all resources, including gas-fired generation, energy storage, demand response, renewables, and energy efficiency, to bid and compete in the same solicitation. The selected resources were also subject to parameters set by the CPUC, which required that new resources for the West L.A. Basin area be composed of at least 1000 MW of gas-fired generation, at least 600 MW of "preferred resources" (efficiency, demand response, and renewables) and/or energy storage and 300-500 MW of any resource.

What happened? Here is a breakdown of the resources SCE has selected from the RFO and will seek final procurement approval by the CPUC through a formal application:

Energy Efficiency:                            130 MW
Demand Response:                            75 MW
Renewables (Behind-the-Meter):          44 MW
Storage:                                        261 MW
Gas-Fired Generation:                    1,382 MW

Total:                                         1,892  MW

So, what do we make of this?

The good:

The All-Source RFO: SCE's all-source RFO, the first of its kind in California, allows for competition among a range of potential resource solutions to meet need. The response to SCE's RFO was extremely robust, with over 1,800 proposed offers. SCE's all-source RFO is a step forward in utility procurement practice and stands in stark contrast to SDG&E, the other utility impacted by San Onofre's retirement.

Rather than conduct an all-source RFO to meet 300-600 MW of any resource need authorized to SDG&E by the CPUC following the retirement of San Onfore, SDG&E is seeking CPUC approval of a bilateral contract for all of this capacity with the 600 MW Carlsbad gas plant. Bilateral contracting is a private negotiation that prejudices other potential resource providers who are kept from competing to fill authorized procurement amounts as well as advocates like the Sierra Club seeking optimal outcomes for customers and the environment. The Sierra Club is opposing approval of the Carlsbad contact before the CPUC.

A Precedent-Setting Showing by Energy Storage: The 261 MW of storage procurement is a significant boost for the industry and will result in storage deployment at a more accelerated pace than required under California's recent energy storage procurement decision.  SCE's proposed storage procurement is comprised of a range of applications, include a number of "behind the meter" storage application that will shift consumption from high to low demand hours and facilitate increased deployment of rooftop solar. SCE's proposed procurement also includes a 100 MW utility-owned battery storage provided by AES. The 100 MW battery storage project is significantly larger than existing battery-storage projects in the country and raises the bar for the size of storage projects utilities should be considering.

For additional scrutiny:

Did SCE's Proposed Procurement Comply with State Policy Prioritizing Preferred Resources? SCE proposes to meet its 300-500 MW "any resource" authorization entirely with fossil-fuel generation. To comply with state law and a long-standing energy policy called the "Loading Order," SCE must procure all feasibly available and cost effective energy efficiency, demand response, and renewables prior to resorting to fossil fuels. Because they typically have 20-25 year contracts with a utility, new gas plants create long-term commitments to fossil fuels that interfere with California's ability to rapidly decarbonize its energy system.

As SCE moves forward in seeking approval for the resources it selected from its RFO process, the Sierra Club will be scrutinizing SCE's procurement to make sure SCE did not improperly disregard the Loading Order and all feasible and cost-effective clean energy options. Given the number and range of responses to SCE's RFO, one would expect that SCE had plenty of viable carbon-free solutions to choose from in meeting its "any resource" needs.

-- Matt Vespa. Sierra Club Environmental Law Program

Earlier this week, the Utah Public Service Commission held a two-day hearing on Rocky Mountain Power's request to impose a $4.65 monthly fee on customers with rooftop solar. If approved, Utah would be only the second state in the country to penalize customers who have installed rooftop solar -- last year, the Arizona Corporation Commission approved a fee of $0.70 per kilowatt of solar installed (the average residential installation is 3-6 kW).

Hundreds of citizens rallied outside the Public Service Commission's offices in Salt Lake City, below, and later packed the hearing inside to protest the proposed solar fee. (See more photos of the rally here.)

Photo by Kim Sanders

Rocky Mountain Power's proposed fee is not based on any evidence that rooftop solar customers impose additional costs on the utility's system. Rather, the company is arguing that because customers with rooftop solar purchase less electricity, they aren't contributing sufficiently to the fixed costs of maintaining the distribution grid.

What the company's sparse analysis fails to take into account, however, are the many benefits that rooftop solar customers offer the grid. The absence of any accounting for these benefits is inexcusable because state law (recently amended by SB 208) requires the Public Service Commission to weigh the costs and benefits of net metering prior to imposing any fee.

Despite that law, Rocky Mountain Power submitted no evidence of the benefits of net metering in its initial application. In a last-ditch effort to cobble together a record that would support a decision in its favor, the company asserted that the price paid to small utility-scale renewable resources was an adequate proxy for the benefits of net-metered rooftop solar. (The reason that the price paid to these "qualifying facilities" under the federal Public Utility Regulatory Policies Act is not conclusive of the benefits of net metered distributed solar will be discussed in a future post.)

The Sierra Club and Utah Clean Energy, however, did present detailed evidence of the benefits of rooftop solar. First, net-metered rooftop solar customers reduce their electricity consumption during the time of day and of the year when it is most expensive for the utility to provide power, and thereby save the utility and all other ratepayers a lot of money. This locally generated power is even more valuable than remotely generated power, since almost no electricity is lost during transmission.

Moreover, the 14.2 megawatts of solar installed in Rocky Mountain Power's territory helps the utility meet its capacity reserve requirements, and reduces or defers the need for upgrades to the distribution system. The Sierra Club's expert, Dr. Dustin Mulvaney of Ecoshift Consulting, calculated that these benefits added up to more than $1.4 million annually -- and this isn't even taking into account the very real benefits of reduced emissions of carbon dioxide and other pollutants that result when rooftop solar generation displaces fossil fuel generation. Dr. Mulvaney estimated that a modest 6.8 percent growth rate of rooftop solar in the Rocky Mountain Power territory could avoid over 20 million metric tons of greenhouse gas emissions from 2015-2040.

The Sierra Club, along with Utah Clean Energy, The Alliance for Solar Choice, and Utah Citizens Advocating Renewable Energy, are asking the Commission to deny Rocky Mountain Power's effort to impose this unjustified fee on rooftop solar customers. Instead, the Commission should open up a separate proceeding to undertake a comprehensive evaluation of the costs and benefits of net metering, and to allow adequate time and opportunity for public input. Over ten thousand citizens and many local leaders,  including Salt Lake City Mayor Ralph Becker, have come out against the proposed fee, as has the city's major newspaper.

The hundreds of citizens who rallied in opposition to the fee on July 29th called it a "sun" tax. This show of public support for distributed solar -- not just from net-metered customers -- should remind the Public Service Commission of the broad social benefits that this resource provides.

- Casey Roberts, Staff Attorney, Sierra Club Environmental Law Program