6/9/14 – Landmark Legislation Could Put Geothermal Back on Track for California

From Renewable Energy World, 6-9-2014

WASHINGTON, D.C. — The California Assembly is up next to consider a 500-megawatt (MW)-by-2024 geothermal procurement bill. This follows the May 28 passage of S.B. 1139 by the state Senate in a 21-11 vote. Electricity procured under this new geothermal bill would be separate from RPS-counted electricity. Industry, utilities, government agencies, and environmentalists say this bill is an answer that solves many time-sensitive problems at once. Some opponents, as stated in the May 28 Senate floor analysis, asked whether a mandate for geothermal in the case of this bill is fair and cost-effective. But geothermal companies working in California find fairness to be something they have been lacking and see this bill as a potential way to get geothermal valued properly.

Despite being renewable, geothermal is not treated equally in practice under California’s Renewables Portfolio Standard (RPS) program. Bob Sullivan, Vice President of Business Development at Ormat Technologies, says: “California has a preferred loading order, and renewables are at the very top along with distributed generation and efficiency. Then fossil fuels start coming on. But geothermal keeps getting overlooked.” The problem lies in the lack of recognition of geothermal energy’s differences from other renewable sources, and a lack of incentives for the ancillary benefits that make it key to the energy mix.

Local government such as the Imperial Irrigation District (IID), Imperial County agencies, Salton Sea Authority, and others working on the bill are pioneering fairness efforts for legal recognition of the unique values that geothermal energy provides. Geothermal’s characteristic differences from other renewables are apparent in the geography and chemical make-up of the strategically placed Salton Sea geothermal area.

The Salton Sea is currently facing imminent deterioration that would further devastate many of the businesses and inhabitants in one of the most economically challenged areas of California. With its enormous geothermal potential, those involved see no reason for Imperial County to continue having the highest unemployment rate in the state, at 21.6 percent.

Imperial County District Supervisor Michael Kelley says, “As the leading area for geothermal resources in the U.S., Imperial County is very pleased with the progress of S.B. 1139. This bill is critical to address California’s renewable energy needs, our County’s economic needs, and the creation of new and exciting industries. We are proud to partner with IID, labor and environmental groups and others to take this step forward for our State and our County.”

Assemblymember V. Manuel Pérez who co-authored the bill along with State Senator Ben Hueso has stated that the development of geothermal resources in the Salton Sea basin supports local economic development and job creation and could actually fund the Salton Sea restoration.

In part, S.B. 1139 strengthens a regional initiative that addresses the Salton Sea Restoration and Renewable Energy Initiative.  Responding to both environmental and economic needs, over 1,000 MW of geothermal power and important transmission links would be constructed.

“Geothermal, with its ability to provide baseload power with negligible greenhouse gas emissions, has the potential to anchor southern California’s energy needs, while keeping us on track to achieve our state’s emissions reductions goals,” said the Assemblyman.  “Either we are serious about these goals or we aren’t.  At the same time, the development of these resources could produce thousands of jobs for our Coachella and Imperial Valley communities while also serving as a source of financing for Salton Sea restoration.”

However, the Senate Appropriations Committee’s Fiscal Summary high-balls the costs of the program and leaves out the economic benefits. “We expect that the net result of this legislation will be cost-savings for Californians,” says Geothermal Energy Association Executive Director Karl Gawell. “As the E3 report concluded in January, an RPS with greater diversity and more geothermal will benefit the state, consumers and the environment.”

Geothermal’s long-term value has been proven, and since the cost of geothermal operation and maintenance is lower than any of the early development stages, geothermal plants begin making money as soon as they are operable.

Support Builds Steadily for S.B. 1139 on Energy, Water, and Environmental Fronts

Environmental groups like Sierra Club California and Defenders of Wildlife; labor representatives, including CA State Association of Electrical Workers and Desert Valleys Builders Association; water groups, such as IID and Latino Water Coalition; and industry experts have rallied in support of geothermal energy.

Meanwhile, the state’s powerful utilities lined up in opposition including Pacific Gas & Electric, Sacramento Municipal Utilities District, San Diego Gas & Electric, and Southern California Edison.

In April, Senator Hueso and Assemblymember Pérez hosted a Sacramento hearing on the status of geothermal in California. At that hearing, Gawell provided testimony on the values that geothermal energy brings to the state, along with fellow panel members California Energy Commission Commissioner David Hochschild and Executive Director of Independent Energy Producers Association Jan Smutny-Jones. Other witnesses included IID’s General Manager, Kevin Kelley; California Independent System Operator’s Vice President, Karen Edson; and Energy Division Director for California Public Utilities Division Edward Randolph.

“We view SB 1139 as critical to unlocking the vast geothermal energy potential at the Salton Sea and advancing the cause of a smaller but sustainable sea through renewable energy development,” says IID Board President James Hanks. “Senator Hueso and Assemblymember Pérez have provided real leadership in taking up this cause, and IID stands ready to help as the bill moves on to the Assembly.”