Large hydroelectric facilities currently don’t count toward the California's renewables portfolio standard, rankling rural utilities that say they will have to spend hundreds of millions of dollars for renewables they won’t need in coming years.
The Turlock Irrigation District and other rural public utilities are hopeful that legislation will pass in 2020 that will permit them to count large hydro resources toward the renewables goals set out in Senate Bill 100. But they face a tough fight in a highly politicized and volatile California energy environment.
Legislation that failed to pass this session but could be revived next year, SB 386, introduced by Sen. Anna Caballero (D-Salinas), would have allowed TID and Modesto Irrigation District to count the output from the 203 MW Don Pedro hydroelectric project toward the 2030 renewables portion of the state’s RPS (WPW No. 17 ). Opponents of the legislation see it as a slippery slope affecting California’s climate goals.
Support for SB 386 faltered near the end of the session, as the architects of SB 100 and labor unions fought the bill, partially on the grounds that it would stifle development of renewables in the state. Existing hydroelectric facilities larger than 30 MW count toward the state’s 100 percent zero-carbon resources by 2045 goal, but not the 60-percent-by-2030 RPS requirement.
“The argument that this would dramatically impact the state’s climate goals—it’s just not factual,” TID spokesman Josh Weimer said of the bill. He questioned why the state was taking incremental steps toward 100 percent renewable/zero-carbon energy and said the 2030 date is “random.” The amount of generation that comes from Don Pedro is a tiny fraction of its resource mix, which includes wind, solar and natural gas, he said.
TID is over-procured, and now must go out and purchase 200 MW of RPS-eligible power, which is estimated to represent a $300-million commitment to meet the RPS, Weimer said. Even if Don Pedro is counted, the utility will have to procure renewables it doesn’t need, he said.
TID provides irrigation water to a 307-square-mile service area that incorporates 150,000 acres of Central Valley farmland, and has a customer base of 100,000 residential, farm, commercial, industrial and municipal accounts in a 662-square-mile service area.
The utility supports SB 386 because the current structure of SB 100 forces it to purchase energy its customers don’t need. But the utility did not propose the legislation, rather coming on board after it was introduced, Weimer said.
“We believe in renewable energy—that is the direction that TID is moving,” he said. “We are in no way trying to get out of that.” The bill would delay purchases of unneeded energy and give time for technology to help with hydro balancing, he argued.
“The risks associated with these capital expenditures are borne directly by ratepayers in a region consistently recognized as economically distressed,” a briefing by Caballero on SB 386 said.
“These are not new arguments,” RL Miller, political director of Climate Hawks Vote, a super PAC that pushed for SB 100, said in a phone interview. She added that the same arguments were considered during deliberation of SB 100 and “explicitly rejected.” The intent of the new renewables law was to create conditions where the market for wind and solar would grow, she said.
“The general idea is, by not allowing the competing arguably clean sources of energy to count, it creates conditions where solar and wind become the default,” Miller said. “They end up as substantially less expensive than anything else.”
Miller said the renewables-development argument is just one facet of the debate. Hydroelectric generation fluctuates based on seasonal rainfall, she said, and when hydro is at reduced levels, natural gas generation often makes up the difference. With SB 100 and renewables, “the intent here is to grow or create unstoppable market momentum,” Miller said.
But when asked if the actual impact to renewable-energy development from SB 386 had ever been quantified, Miller said she didn’t know.
In any event, the momentum toward 100 percent renewables is well underway in California—with some possible pitfalls along the way, such as the bankruptcy of Pacific Gas & Electric, which holds tens of billions of dollars in power-purchase agreements to meet SB 100.
Whether the pursuit of renewables is overzealous is in the eye of the beholder, as is the scope of the sacrifice that should be made, and in what time frame. But adjustments to the trajectory of SB 100 might be in order if the “affordable” part of the California energy equation has any hope of persisting, especially with so many other uncertainties facing energy consumers.