Renewable energy has come of age. A recent report on the state of the renewable energy industry concludes: “Dramatic improvements in performance, as well as government incentives, have resulted in reduced costs that are quickly making renewable energy technologies competitive with traditional forms of electricity generation . . .”
The report adds that the cost of electricity from solar photovoltaics and wind is only one-tenth what it was 20 years ago. (Report, “The Changing Face of Renewable Energy,” available at www.navigantconsulting.com.)
Large wind projects already produce energy at costs competitive with natural gas-powered electricity plants, and this will only continue to improve as the cost of natural gas increases and as demand for this finite resource increases. It is only a matter of time before solar, biomass and other renewable energy technologies achieve cost parity.
It is becomingly increasingly apparent that the real obstacles to leaving the unsustainable fossil fuel era are largely political and legal in nature and less and less economic or technical. Accordingly, legal tools are being crafted throughout the country to help usher in the sustainable renewable energy era.
Communities across America are now choosing to pursue greater energy independence through renewable and more environmentally friendly technologies, and these same choices are now available to the Santa Barbara region.
California, in the last year alone, has enacted major energy legislation that has brought our state to the forefront in developing renewable energy. This legislation includes SB 1078, which mandates that California obtain 20 percent of its energy needs from renewable sources by 2017; AB 1493, which aims to significantly reduce greenhouse gas emissions from cars and trucks beginning in 2009; and AB 117, the “Community Choice” law. AB 117 allows cities and counties, beginning on July 15, 2003, to combine their residents’ electricity needs to negotiate long-term power contracts directly with energy companies and to administer state-funded conservation and efficiency programs currently administered by investor-owned utilities.
Community Choice will allow existing investor-owned utilities to maintain all their operations except power procurement negotiation and state-funded conservation and efficiency programs. That is, the incumbent utility will still meter customers, still bill customers, and still earn similar profits to those it currently enjoys.
For achieving real, on-the-ground, economic and environmental benefits in a fairly short time frame, Community Choice may be the most promising of the new laws for communities like Santa Barbara and the rest of the South Coast.
Under similar laws passed in Massachusetts, Ohio and California (in a similar, now defunct, program), communities have achieved significant cost savings by negotiating power contracts through renewable energy providers.
California’s version of Community Choice may allow local governments to save money on their power bills and to obtain state funds to achieve greater conservation and efficiency, leading to additional savings. In addition to taking advantage of economies of scale, combining different types of electricity users (commercial, industrial and residential) will allow local governments to create an attractive “load profile” — the pattern of electricity use throughout the day, which providers like to be as constant as possible — to help negotiate savings.
Other than the financial benefits Community Choice may bring, local governments will be able to negotiate power contracts with energy suppliers who can provide a significant percentage of renewable power.
In the past, developing renewable energy generation has been hindered by a “chicken and egg” situation due to the difficulties in penetrating a market controlled by traditional fossil fuel power suppliers. Now, as demand for renewable power grows due to communities opting for it through Community Choice, energy suppliers will be enabled and motivated to bring online new renewable energy projects that are often stalled for lack of reliable contracts to sell such power. There are currently such projects being proposed in Santa Barbara County that may be aided through implementation of Community Choice.
By promoting the development and use of renewable energy, California’s communities will be doing their part to curb the dangers of global warming, reduce asthma and other air-related health problems in our children, and ameliorate the problem of nuclear waste generation by reducing the need to build new nuclear power plants and creating green power to replace electricity from existing nuclear plants.
Implementing Community Choice will not be an overnight endeavor and the proposed benefits are not written in stone. But this new legislation is tremendously promising and provides a substantial tool for communities suffering under the twin burdens of a budget crunch and a desire to help create a sustainable future.
We believe that Community Choice bears consideration by both local governments and community organizations like the Community Environmental Council’s Santa Barbara County Regional Energy Alliance for adoption and implementation.
It may prove to be the ultimate “win-win” in the quest to obtain energy that rests easy on our pocketbooks as well as our consciences.
* Tam Hunt is a Santa Barbara attorney; Bud Laurent is CEO of the Community Environmental Council; Peter Jeschke is CEO of MEI Power Corp.; Kristen Morrison is coordinator of the Renewable Energy Project, with the Nuclear Age Peace Foundation.