New York and California in LaLa land on Energy

New York Adopts “Clean Energy” Standard
Myron Ebell

New York’s Public Service Commission on 1st August officially adopted Governor Andrew Cuomo’s, “Clean Energy” Standard, which will require that 50% of the state’s electricity be produced from renewable sources by 2030.  At the same time, the commission required the state’s utilities to subsidize three nuclear reactors in order to keep them in operation.

New York’s 50% renewables by 2030 target is the same as California’s.  Vermont and Hawaii are the only states with more ambitious goals.

Ratepayer subsidies for the nuclear plants are estimated to be $965 million the first year and could total $7.6 billion in twelve years.  The money will be used to upgrade the three plants and keep them in operation.

Some environmental groups criticized the nuclear subsidies.  Alex Beauchamp of Food and Water Watch said, “New York needs a true clean energy revolution to move the state to 100% renewable energy, but the billions announced today to bail out an old, dangerous, and unprofitable technology make that revolution even more difficult.”

According to Crain’s New York Business, “Members of the state’s Public Service Commission … said they understand the concerns of those opposed to nuclear power. But they said the state’s use of fossil fuels would actually grow if the plants don’t continue to operate.”

Given New York’s already high electric rates, I was surprised to learn that the state still has any energy-intensive businesses, but the Business Council of New York State put out the following statement from Darren Suarez: “With today’s action, it is clear the Public Service Commission has failed to properly evaluate the significant costs associated with the Clean Energy Standard. This failure will cost New York State businesses billions of dollars and put current and future New York manufacturing jobs, and jobs in other energy-intensive sectors, in mortal danger.”

Brown Launches Ballot Initiative to Protect Climate “Legacy”
Marlo Lewis

Legislative efforts to extend California’s climate policies beyond 2020 hit a snag this week, but Governor Jerry Brown vowed through his top aide, Nancy McFadden, that he “will continue working with the Legislature to get this done this year, next year, or on the ballot in 2018.”

Brown’s term ends in 2018. With carbon allowance sales fetching only 1 percent of expected revenues in the May 2016 auction, and with the state’s emission-reduction targets after 2020 still undecided, Brown’s “legacy” as a climate policy leader is in doubt.

The Global Warming Solutions Act of 2006, AB 32. which requires California’s greenhouse gas emissions to decline to 1990 levels by 2020 and authorizes the State’s cap-and-trade program, clearly implies that the governor and legislature are to decide “how to continue reductions of greenhouse gases after 2020.” In other words, absent new legislation, the California Air Resources Board, which administers AB 32, has no authority to increase the stringency of the cap-and-trade program.

Brown is pushing the legislature to pass an expanded AB 32 requiring California to reduce its greenhouse gas emissions 40 percent below 1990 levels by 2030. Moreover, he wants the Legislature to approve the measure by a two-thirds supermajority.

The reason: The State is using cap-and-trade revenues to fund various spending projects, including a portion of the $64 billion LA-San Francisco bullet train. However, California Proposition 26 requires a two-thirds supermajority vote of the Legislature to enact new fees or taxes. A California appellate court is now reviewing litigation in which petitioners argue the State’s use of auction sales as tax revenue is “unconstitutional” because the Legislature approved the cap-and-trade program by only a simple majority.

Brown’s backstop strategy, as reported in the LA Times, Sacramento Bee, SFGate.Com, Reuters, and Scientific American, is a ballot initiative campaign. If a supermajority of the Legislature fails to enact the 40-by-30 plan, he will ask voters to approve a ballot measure authorizing the program.

Brown has already registered a finance committee, “Californians for a Clean Environment,” to mount the ballot initiative campaign.