Amid the worst budget crisis in its history, the state of California is set to make things worse at the behest of the wind and solar industries.
The California Air Resources Board (CARB) is set to increase the state’s so-called renewable portfolio standard (RPS) to 33% by 2020, up from 20% — meaning that one-third of the electricity produced in the state must come from so-called renewable sources like wind and solar, according to a report in Restructuring Today.
To meet that standard, the utility industry will need to spend an estimated $115 billion over the next 10-plus years. Given that only about $23.5 billion in financing was available annually for renewable projects nationwide before the financial crisis, the new standard would require that California utilities obtain about 50% of available funding each year.
CARB chairman Mary Nichols, a Democrat appointed by Gov. Schwarzenegger and a former Clinton administration EPA appointee, admitted to Restructuring Today that,
It’s going to be a challenge to reach that goal without negatively impacting reliability or leading to huge cost boosts for consumers.
A California Senate consultant told Restructuring Today that since the state’s budget crisis has been “temporarily” resolved, the bill containing the new standard is likely to pass and be signed into law this September.
The new standard will essentially require that each man, woman and child in California borrow about $3,108 in principal alone to pay for it — that is, the privilege of paying higher electricity prices for no environmental gain.