Energy Bill a Step Back for Clean Power, Foes Say

Written by Ucilia Wang

The battle over a California ballot measure that would require utilities to sign more long-term contracts to buy renewable energy is heating up this week with the launch of a TV ad opposing the initiative.

According to the commercial, Prop. 7 will exclude small renewable-energy providers from the energy market and increase consumers' energy bills. The group behind the ad, Californians Against Another Costly Energy Scheme, received funding primarily from utilities such as the Pacific Gas and Electric Co. (PCG - Get Report), Southern California Edison Co. and others.

Prop. 7 proponents, Californians for Solar and Clean Energy, tout the initiative as an aggressive move to promote energy from sources such as solar, wind, geothermal and ocean waves.

Heading the campaign for Prop. 7 is Jim Gonzalez, a former San Francisco County supervisor. Funding for the petition drive to get the initiative on the ballot came from Peter Sperling, whose father, John Sperling, founded the Apollo Group (APOL - Get Report), which operates the University of Phoenix and other vocational schools. Peter Sperling is the vice chairman of the board at Apollo.

The ballot measure calls for utilities -- both investor- and government-owned -- to get at least 20 percent of their electricity from renewable sources by 2010. The quota would increase to 40 percent by 2020 and 50 percent by 2025.

Prop. 7 also would require utilities to sign 20-year agreements to buy renewable energy, which would have to come from power plants with capacities of 30 megawatts or larger that are located in the state or near the border. Smaller hydroelectric facilities, as well as plants that generate power from garbage, also would be eligible for these contracts if they meet certain requirements.

Electricity producers could sell power to utilities at as much as 10 percent above the price for conventional power (see the full text of Prop. 7). Utilities could pass on some of the extra cost to consumers, but the rate increases are capped at 3 percent.