Flawed California Energy Policy Aided By Federal Government Grants

December 5, 2012

Two recent reports by nonpartisan groups have raised major concerns regarding the negative effects of California’s push for increased reliance on renewable energies.

One report by the Little Hoover Commission projects that California’s legal requirement that the state derive a third of its power from renewable sources by 2020 would lead to soaring costs and significant damage to the environment.

The Los Angeles Times reports 

California's push to add wind and solar energy to its existing power grid could saddle ratepayers with soaring electrical bills and despoil the state's environmental resources unless officials act soon, according to a report released Monday by a government watchdog agency.

Although it applauded the state's effort to reduce reliance on fossil fuels, the nonpartisan Little Hoover Commission said that a "balkanized" and "dysfunctional" collection of state energy agencies threatened to create a "profoundly expensive policy failure."

"The state has failed to develop a comprehensive energy strategy with clearly delineated priorities to ensure that policies are not working at cross-purposes," the report said. "Policies and regulations affecting electricity have been piled upon each other piecemeal, through multiple, sometimes overlapping public processes."

The 107-page analysis, "Rewiring California," outlined the mistakes made during the administration of former Gov. Gray Davis, which resulted in a crisis that sent electricity rates skyrocketing, and warned of the possibility of similar policy errors.

The mandate to reach these goals by 2020 is forcing the state to rush careful policy choices, according to commission chairman David Hancock. "Getting it right is far more important than speed," Hancock told the Los Angeles Times.

The Commission recommended a moratorium on further renewable energy problems, for a thorough assessment of the state’s energy policies and their effects.

"Without more careful calibration of these policies, Californians may wind up paying more than necessary for electricity and the state may unnecessarily degrade pristine habitat in its rush to implement renewable energy goals," Hancock said.

The massive amount of money coming in from the federal government in support of these projects is perhaps acting as an enabler to California’s rush into renewable energy. California companies received over $4 billion in Department of Energy loans as part of the American Recovery and Reinvestment Act, including giant loans of $1,124,110,000 to Mojave Solar, $646,000,000 to First Solar Electric, and $273,368,534 to (now-failed) Solyndra.

The amount of federal money coming into California could be damaging to the state’s electricity system. A report by Stanford’s Hoover Institution finds that California’s massive dive into renewable energy is complicating California’s energy grid in ways that are sure to increase costs.

"California has the most ambitious—and complicated—renewable program in the United States. ... No single law, regulatory decision, or document describes all policies and programs seeking to develop renewable power in the state, much less the many linkages (or lack thereof) among them," the report states.