Sep 03, 2014

California Legislature Ends Session Without Voting on Geothermal Bill, Tesla Deal

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California lawmakers ended their session Saturday without voting on SB 1139, a bill that would require utilities to purchase a percentage of their po...

California lawmakers ended their session Saturday without voting on SB 1139, a bill that would require utilities to purchase a percentage of their power from geothermal sources in the state’s high desert.  

Opposition to the bill was strong from both traditional utilities and renewable energy companies. Utilities felt that requiring the purchase put a burden on its customers, while renewable energy companies felt that it created an unequal playing field for renewables since it set aside a large portion of the market only for geothermal.

CEO of Independent Energy Producers Association Jan-Smutney Jones, who lobbied against the bill, believed that the required purchase of 500 MW from geothermal sources wasn’t fair.

"Once the legislature gets involved in slicing up the pie, then everybody else shows up and says, 'Where's my piece,'" he told U-T San Diego.

The bill was hoping to jumpstart geothermal development out in the Salton Sea—part of Southern California’s Imperial County.

Estimates from San Diego Gas & Electric put the cost to consumers at around $450 million per year if the bill were to pass.

One of the bill’s co-sponsors, Senator Ben Hueso, is expected to introduce another version of the bill next year.

“As we moved through the process, Sen. Hueso realized that this bill needed to be more comprehensive to include existing geothermal and other baseload resources,” Hueso spokesperson Lourdes Jimenez said in a statement. “To do this, the bill needed to be developed further and the legislative process simply did not give him the time to enrich this bill as needed.”

Imperial Irrigation District General Manager Kevin Kelley expressed his disappointment in the failure of the bill, but was still grateful to the attention called to the valley’s resources. Kelley told The Desert Sun that he’s in for the long game.

“This was always going to be a marathon, and while it would have been a quick jumpstart to have had 500 megawatts of new procurement, the environmental problem—the environmental dilemma at the Salton Sea—is unchanged,” he said. “And the greenhouse gas reductions—the aggressive air quality standards that the state of California has set for itself—pretty much demand that this important baseload energy be brought back into the renewable portfolio mix.”

This was not the only discussion tabled regarding the Salton Sea. Lawmakers ended their session without coming up with any incentives for Tesla to build its Gigafactory in the area. While the door is not completely closed on the $5 billion project coming to California, it’s shutting quickly. Tesla is looking at five states total— Arizona, California, Nevada, New Mexico, or Texas—as the factory’s future site. The company is reportedly looking for $500 million in incentives and an expedited environmental assessment.

Negotiations between Tesla and the Governor’s office reportedly continued into the weekend, but nothing has yet to emerge.

“They were sending a variety of different messages,” Roseville Senator Ted Gaines said. “Depending on what day you listened to what Tesla was saying, they were saying they’d like to get a deal done as soon as possible, or in six months, or by year’s end. I don’t think there are too many states in the nation that can put together such a good package, because it is a tall order.”

Mike Rossi, a senior advisor to Governor Jerry Brown, said in a statement that “the Administration continues to engage in productive conversations with Tesla and remains optimistic that we can reach an agreement that meets our common goal of adding jobs in California.”

The Gigafactory is expected to bring more than 6,500 jobs to the region. 

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