HomeMy WebLinkAboutAgenda Report - October 1, 2008 E-09s
AGENDA ITEM
lddmhlkCITY OF LODI
COUNCIL COMMUNICATION
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AGENDA TITLE: Adopt Resolution Opposing California Ballot Initiative Proposition 7 (Solar
Clean Energy Act of 2008) (EUD)
MEETING DATE: October 1,2008
PREPARED BY Electric Utility Director
RECOMMENDED ACTION: Adopt a resolution opposing the November4, 2008 California ballot
initiative Proposition7 titled "Solar& Clean Energy Act of 2008."
BACKGROUND INFORMATION: The Northern California PowerAgency's Legislative Committee has
asked member agencies. such as Lodi, to consider adopt! n% a
resolution opposing Proposition 7, the Solar & Clean Energy Act of
2008.
By adopting the resolution, Lodi will join a list of other municipal utilitiesthat oppose Proposition7.
The City of Lodi could be listed in a statewide marketing campaign, along with other municipal utilities,
as an opponent of Proposition 7. The NCPA's Legislative Committee also is recommending that the
NCPA Commission adopt a resolution opposing the proposition at its September 28 meeting.
If approved, Proposition 7 would impose an extremely aggressive and likely infeasible new Renewable
Portfolio Standard (RPS) on California's electricity providers. The proposition would require utilities to use
40 percent renewable power by 2020 and 50 percent renewable by 2025. To meet these targets, each
electric utility must increase its amount of renewables by a minimum of two percent each year.
The present RPS guideline for public utilities in California is 20 percent by 2017. Lodi's present level of
qualified renewables (green power) is just over 20 percent.
Proposition 7 would give the California Energy Commissionthe authority to enforce new RPS mandates
on publicly owned electric utilities. The measure requires all electricity providers — including Lodi — to
offer renewable procurement contracts of no less than 20 years, with certain exceptions. Itwould require
Lodi to accept all offers for renewable energy that are at or less than the market price of electricity set by
the California Energy Commission.
The measure would set a penalty of 1 cent/KWH for all KWH an electric utility falls short of meeting RPS
goals. Interestingly, the measure forbids utilitiesfrom passing the penalty on to its customers — a
questionable requirement since customers are typically the only source of revenue for publicly owned
utilities. Proposition 7 states that in meeting its mandates that "short term" electricity prices will not
increase prices to consumers by more than three percent. The measure, however, contains no specific
provisions to implement or enforce this declaration.
In fact, a study commissioned by the Northern California PowerAgency predictsthat the impact of
Proposition 7 on its members would be $700 million with the presentworth impact on Lodi being in
Adopt Resolution Opposing California Ballot Initiative Proposition (Solar& Clean Energy Act of 2008) (EUD)
October 1,2008
Page 2 of 2
excess of $40 million. A review of Proposition 7 by the State's Legislative Analyst's Office predicts that
administration of the initiative by the CEC and the California Public Utilities Commission would cost $3.6
million.
Many renewable energy suppliers and environmental agencies have publicly expressed their opposition
to Proposition 7. Their biggest concern is that the initiative appears to discount renewable projects less
than 30 megawatts in size. The California Solar Energy Industries Association says "Proposition 7 would
devastate California's small solar businesses by forcing us out of the market — eliminating a major source
of clean power and thousands of jobs." A spokesman for the very active Natural Resources Defense
Council says "This is a well-intentioned bill that was written by people who are not very knowledgeable.
They hired people who, frankly, don't know what they are talking about."
FISCAL IMPACT: None
FUNDING: None
GFMAst
Electric Utility Director
RESOLUTION NO. 2008-194
A RESOLUTION OF THE LODI CITY COUNCIL OPPOSING
CALIFORNIA BALLOT INITIATIVE PROPOSITION 7
(SOIM&CLEAN ENERGY ACT OF 2008)
WHEREAS, the City of Lodi, in conjunction with the Northern California Power
Agency, has long been a leader in promoting sound energy policies that include a strong
commitment to renewable energy; and
WHEREAS, Proposition 7 establishes extremely aggressive and likely infeasible
Renewable Energy Portfolio targets for electricity providers like Lodi; and
WHEREAS, Proposition 7 imposes unnecessary state mandates on publicly
owned and locally -control led electric utilities like Lodi; and
WHEREAS, local control and governance has long been key to Lodi's leadership
and environmental stewardship in developing electric generation from renewable
resources; and
WHEREAS, Proposition 7 imposes mandates on publicly -owned utilities like Lodi
and gives the California Energy Commission authorization to enforce such mandates;
and
WHEREAS, Proposition 7 is not clear as to whether it allows new renewable
resources less than 30 megawatts in size to count toward meeting State Renewable
Portfolio goals.
NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council does hereby
express its formal opposition to Proposition 7 in California's November 2008 General
Election due to imposition of unworkable State Renewable Portfolio mandates and
imposition of State control on publicly -owned electric utilities like Lodi.
Dated: October 1, 2008
I hereby certify that Resolution No. 2008-194 was passed and adopted by the
City Council of the City of Lodi in a regular meeting held October 1, 2008, by the
following vote:
AYES: COUNCIL MEMBERS — Hansen, Hitchcock, Johnson, and
Katzakian
NOES: COUNCIL MEMBERS— None
ABSENT: COUNCIL MEMBERS — Mayor Mounce
ABSTAIN: COUNCIL MEMBERS— None
NNIFER . PERRIN
ssistant City Clerk
2008-194