Energy Exchange

A Superior Court in San Francisco issued a tentative ruling last week in a lawsuit filed in 2009 by environmental justice (EJ) groups. The groups are asserting that the state’s Air Resources Board (CARB) failed to comply with statutory requirements of AB 32 and the California Environmental Quality Act (CEQA) when it adopted the law’s Scoping Plan—the blueprint for cutting pollution to 1990 levels by 2020—in late 2008.

The tentative ruling affirms CARB’s authority, under AB 32, to pursue a market-based cap-and-trade program combined with an extensive list of other emissions reduction measures. The court’s finding aligns with arguments EDF made about AB 32’s broad grant of authority in an amicus brief filed for the case last July. The ruling also states that CARB should have more fully assessed alternatives to emissions trading in its companion CEQA document. In response to this finding, the court requests that state regulators halt implementation of AB 32 and complete further analysis. The court also raised a larger question about whether one of CARB’s long-standing procedures for regulatory adoption is potentially flawed at meeting the ‘spirit of the [CEQA] law,’ an issue that will likely warrant further attention.

What happens next will be determined once the state and plaintiffs file another round of paperwork in the coming days. Under California Rule of Court 3.1590, CARB has 15 days after the release of the tentative ruling to file an objection. While the court said that CARB should not implement the Scoping Plan (which includes roughly 70 measures) until the deficiencies are fixed, it is hard to imagine that putting in place other measures—ranging from using more renewable energy to improving building efficiency—would be barred by the order.

A likely outcome of the tentative ruling is that CARB will release more analysis of regulatory program alternatives to reduce greenhouse gases in the context of the Scoping Plan, something the agency did extensive work on while this case was moving forward. The judge will determine what procedure CARB must use to make the alternatives analysis public. As it releases this additional analysis, CARB can simultaneously appeal the court’s decision (once it becomes final).

It’s worth noting that both CARB and the California Department of Public Health evaluated the potential impacts of a cap-and-trade program and found that the regulation was not likely to cause any adverse impacts to public health and welfare—especially if money raised from the program is reinvested in California communities to help protect against the impacts of climate change.

Though the ultimate outcome of the lawsuit and precise next steps are uncertain at this point, EDF believes the process will be completed in plenty of time to allow California’s ground breaking cap-and-trade program to start on schedule next January. Given the urgency of transitioning to cleaner sources of energy and unlocking the potential for economic and job growth, this would be good news for California.

Energy storage is gaining important and well-deserved policy attention in Sacramento due to its wide-ranging potential. Last month, Assembly Bill 2514, which focuses on energy storage, overcame a major hurdle when it passed through the rigorous Utilities and Commerce Committee.

AB 2514 is sponsored by California Attorney General Jerry Brown (front running Democratic candidate in this year’s governor’s race) and authored by Nancy Skinner (founder of ICLEI, former director of The Climate Group and one of the Legislature’s top environmental leaders).

Brown and Skinner identified an effective way to advance energy storage technologies in California. The bill calls for increasing the consideration of energy storage by requiring the California Public Utilities Commission (CPUC) to advance a rulemaking process where storage technology is evaluated based on both the costs and the range of values it can provide. The bill requires the CPUC and utilities to look beyond ability to simply discharge energy and toward a full-scope evaluation that’s not currently performed. Utilities will then be assigned targets for installing storage technology in their service territories over the next decade.

AB 2514 has a way to go to become law, including votes on the Assembly floor and by the State Senate and State fiscal committees. If California is to meet its renewable energy portfolio standards and energy demand and cut greenhouse gas emissions, this bill should get full consideration and support.

Either way, the tide may be turning in the direction of increased energy storage. Consider:

• The Cal-ISO is performing pilot testing to see how certain storage applications respond to remote signals.
• The Federal Energy Regulatory Commission (FERC) through Order 890 is also requiring system operators to allow storage providers to price in the value of the ancillary services when competing for energy market share.
• Numerous large greenhouse gas emitters are buying storage to reduce energy costs and gain the benefits of storage.

These advances send a strong signal that widespread energy storage is a great idea whose time has finally come. Storage can and should be compared against the entire range of energy solutions. It should then be strategically integrated into a package of solutions designed to meet California’s ambitious clean energy and emissions reductions goals.