Proposition 7, on the ballot in California this November, is an initiative that requires utility companies in the state to obtain 50% of their power from renewable resources by the year 2025.  It sounds great, and a July poll shows 63% of those asked support Proposition 7 demonstrates that Californians are eager to help the environment and make their state's energy policy more sustainable.  However, a look at the list of opponents to the Proposition contains many surprises; along with the major utilities like PG&E and Edison, that list also includes surprises such as The California Democratic Party,  The California Green Party, The California Solar Energy Industries Association, and The Sierra Club of California.  This list raises some eyebrows, along with the question, Why would these environmentally-friendly groups oppose an initiative that stands to make California the global leader in renewable energy?

The common criticism of Proposition 7 is that it is poorly written and overly complicated, setting in place flawed policies that actually hinder the initiative's ability to achieve its own goal and result in excessive costs for the taxpayer.  Because it is a voter initiative, it can only be amended by a subsequent voter initiative, which means that making any changes to the long-term policies and requirements set out in the proposition will be difficult. 

The actual provisions in the initiative, as summarized by www.ballotpedia.org, are as follows:

-All electric utilities (including municipally-owned utilities) will be required to provide half of their electricity from solar and clean energy facilities by 2025. Current law requires the state's investor-owned utilities (Edison and PG&E, for example) to reach 20 percent renewable energy by 2010.

-The California Energy Commission will be required to identify solar and clean energy zones, primarily in the desert, to jump-start clean power plants.

-Renewable plant construction permits would be fast-tracked for approval by the California Energy Commission once all environmental reviews are in place. Fast-tracking would limit the period for local comments and participation to 100 days.

-Penalties levied on utilities for specific acts of non-compliance would be reduced from 5% to 1%, but the total cap on fines that can be imposed on a utility would be eliminated.

-The California Energy Commission (CEC) will have the authority and responsibility to allocate funds from these penalties into the construction and implementation of new and existing transmission lines to provide access for renewable energy to the grid.

-Utilities will be prohibited from passing along penalties to their electric rate-payers.

-Caps price impacts on consumer's electricity bills at less than 3 percent. However, the non-partisan California Legislative Analyst's Office states that "the measure includes no specific provisions to implement or enforce this declaration".

-Renewable energy sources include solar thermal, photovoltaic, wind, geothermal, small hydro, biomass, and tidal, etc., as provided for in current law Public Resources Code section 25741.

-Utilities entering into contracts with alternative fuel providers will be required to sign 20-year contracts.

The major arguments against the initiative concern the way it deals with costs, including both the way it imposes fines on utilities and the way it seeks to keep rates low, the impact it has on small utilities, and the structural feasibility of accomplishing its goal of having 50% renewables.  

Currently, utilities that are not in compliance with renewable energy policy are fined 5%, with a cap of $25 million.  Proposition 7 seeks to remove the cap but drop that fine to 1%.  According The Sierra Club, this is not a fair trade-off, as no penalty with the $25 million cap in place was imposed anyways.  Any loss in revenue from fines will have to paid for by taxpayers.

There are also doubts about the 3% cap on electricity bills for consumers.  According to The California Taxpayers' Association, "consumers are likely to experience an increase in electricity rates due to expansion of transmission, increased demand for renewable, and more delays resulting from the new regulatory processes."  As the Sierra Club says, "Renewable energy generally costs more than electricity from conventional cheap, dirty power plants.  We Think it's worth the price, but it is misleading to say Prop 7 won't raise rates."

In fact, a cap at 3% will hurt renewable energy producers' ability to compete, by forcing them to set a price and then match their good to that price, rather than produce a good and then sell it for what the market deems an appropriate price.  In comparison, natural gas power plants charge highly fluctuating rates that depend on the current price of natural gas.  Their contracts allow them to do this so that they can pass on any increase in costs to the consumers, something Prop 7 will not allow renewables to do.  Putting them at such a competitive disadvantage harms their ability to grow and to develop the best clean technology possible.

A third problem with Proposition 7 is its exclusion of power plants that produce less than 30 megawatts, a group that especially concerns solar power plants, which are typically much smaller than 30 mw.  One of the best uses of solar, according to the California Solar Energy Industries Association (CALSEIA), is distributed renewable generation, or the practice of building a power plant close to where the power is needed.  Most of these power plants are less than 20 mw, meaning they would be excluded from California's renewable energy plan under Proposition 7.  The harm in being excluded from the program is in the loss of rebates and also being left of the trading market for green credits that small solar power plants often thrive on.  This is why, even though it would seem like CALSEIA would be thrilled about California being 50% renewable by 2025, they oppose the initiative.

Ultimately, the argument seems to be that the goal of having 50% of California's energy come from renewable sources is impossible to achieve if the path outlined by Proposition 7 is followed without substantial negative impacts and unnecessary costs.  A major obstacle is, as The California Taxpayers' Association (Cal-Tax) points out, there is no assurance that the infrastructure necessary to transport all this energy will exist.  The choice will then be to spend even more connecting renewables to the grid or to let it sit unused.  Cal-Tax also raises the question of the fiscal responsibility of spending money on more expensive energy at a time of economic crisis and a state budget deficit of $15 billion. 

In general, the groups that oppose Proposition 7 wish there was an initiative mandating 50% renewable energy that they could support.  Most recommend that something as far-reaching, complex, and long-term as energy policy be left to the California's legislating body, which ensures it is written by people who understand how the system in a manner that allows for changes and adjustments to be made.   For more information on the organizations referenced in this article and their stance on Proposition 7, see below.

CALSEIA- http://calseia.org/proposition-7-analysis.html

Cal-Tax- http://www.caltax.org/EnergyInitiativeAnalysis.pdf

The Sierra Club of California- http://www.sierraclubcalifornia.org/Word%20docs/SCC%20Prop%207%20Why%20Sierra%20Club%20Opposes.htm