California Proposition 7:
Redefining Renewable Energy
to Concentrate Power

by James Hoffman and Victoria Ashley

Proposition 7 on California's November 2008 ballot is presented by its supporters as an opportunity for the state to provide leadership in attacking the looming crises of global warming and climate change. The measure accelerates the timetable requiring California's utilities to convert to renewable sources of electricity, and outlines its "path to energy independence": build giant solar plants in the desert and the requisite transmission infrastructure to deliver the power hundreds of miles.

Among the many tools available to shift the energy economy from fossil fuels to renewables, Proposition 7 relies on the regulatory framework of California's Renewable Portfolio Standard (RPS), a quota system stipulating what percentages of retail sales of electricity in California must come from renewable sources -- such as solar, wind, biomass, and geothermal -- by target dates. By setting the ambitious benchmarks of 40 percent by 2020 and 50 percent by 2025, Proposition 7 has tapped into widespread public support for profound action to transform the energy economy.

If accelerating the RPS was all that Proposition 7 did, it would likely enjoy the support from the numerous organizations now allied in opposition to it -- environmentalists, cities, renewable energy companies, labor associations -- leaving only the big utilities to oppose it. But just as there was more to the beautiful wooden horse rolled into the city of Troy than its inhabitants suspected, there is more to Proposition 7 than its ambitious RPS targets and the sweeping claims of efficacy in its introductory FINDINGS AND DECLARATIONS. Proposition 7 is a complex set of changes to the Public Utilities Code and Public Resources Code -- changes that would hand control of the emerging renewable energy economy over to a few entities of questionable accountability.

Although Proposition 7 adds about a dozen pages of legal code that have lawyers scratching their heads, most opponents share the the assessment of the California Solar Energy Industries Association that the Proposition "could slam the brakes on renewable energy development in the state." By reserving all of its benefits for "solar and clean energy plants" defined as having "a generating capacity of 30 megawatts or more," and by requiring utilities to enter into 20-year contracts with energy providers, the Proposition effectively excludes mico-producers -- such as owners of rooftop solar panels who are currently driving renewables conversion in California -- from counting towards the mandate. While ignoring environmentally friendly measures such as distributed generation and demand reduction (incentives for consumers to reduce energy use), the Proposition allows, for example, as a "solar and clean energy facility" (thereby counting toward its RPS targets), "[a] facility engaged in the combustion of municipal solid waste located in Stanislaus County ..."

The tragedy of Proposition 7 is that it threatens to divert renewable energy development into the same centralized model that underlies the coal, oil, and nuclear industries. In contrast to fossil fuels, sunlight and wind are everywhere, and existing technologies allowing the capture, storage, and exchange of that energy by individuals and communities are rapidly evolving. The promise of renewable energy, beyond addressing the unsustainability of fossil-fuel consumption, is that it enables the democratization of the energy economy.

That promise is no pipe dream: even given the current disincentives against micropower generation, such as the inability of producers to sell their "surplus power" back to the utilities, micropower already accounts for 200 megawatts of renewable generation in California. In the five-year span that it will take to build the giant solar factories currently in the planning stages, this picture could change entirely. Analysts predict that the price of solar micro-power generation will drop to below grid pairity with retail electricity rates in the the next ten years. This, combined with simple reforms to metering policies, can drive an expansion of California's distributed solar market that will dwarf its current 30 percent annual growth rate.

The advantages of the decentralized renewable energy economy for California are obvious. Power generation assets will be owned by millions of individuals and businesses instead of a few giant conglomerates. The infrastructure will be essentially immune from the disruption and manipulation that Californians are all too familiar with. And that infrastructure will use existing rooftop space instead of gobbling up hundreds of square miles of pristine desert lands.

Why, then, would the centralized fossil-fuel model be applied to ubiquitous clean renewable energy resources? In a word, profits.

The control of scarce resources is a time-tested method of concentrating wealth and power. Although renewable energy resources are not scarce, the paradigm shift in public understanding about the fundamental differences between renewables and fossil fuels is only beginning. By subsidizing the building massive permanent infrastructure to control the collection and distribution of renewable energy, Proposition 7 will starve investment in distributed renewables needed to democratize the energy economy. Meanwhile, that centralized, permanent infrastructure will provide profit centers for a few corporations at the expense of everyone else.

The centralized paradigm underpinning Proposition 7 is evident throughout the document, which grants the Energy Commission broad new powers to, for example, fast-track huge facilities by limiting review, and "Identify and designate Solar and Clean Energy Zones -- primarily in the desert." Here, Proposition 7 attempts to define what belongs to all (sunlight, wind, geothermal energies) as being restricted to "zones" -- zones that will be controlled by a few giant corporations beholden only to their shareholders.

Proposition 7 presents itself as remedy to the abuses of one set of giant entities -- California's public and private utilities -- only to hand control to another set of giant entities with less accountability. A look into the likely beneficiaries of the measure turns up companies with histories of Pentagon contract work, like the Carlyle Group and URS Corp, and out-of-state energy players like Phoenix-based Sterling Energy Systems and Florida-based FPL Energy.

Proposition 7 is likely to increase rather than decrease California's carbon footprint and contribution to the very problems to global warming and climate change that it purports to address. Its flawed program of for renewable energy development:

The proposition may the product of good intentions, at least in as much as it accepts the illusion that the wealth of the renewable energy rainbow lies in a far-away pot of gold to be excavated by vast machines and shipped hundreds of miles by power lines. The state that did so much to create the personal computer and the Internet can do better.