Friday, September 19, 2008

Greengate in the Golden State

A Bridge Too Far: California always is on the cutting edge of new innovations and sometimes the country's other states follow in lockstep. Proposition 13 in the 1970s brought skyrocketing property taxes under moderate control and other states followed. Several years ago state voters passed a revenue measure funding stem cell research for diabetes, cancer and other cures. California is among the leaders in attacking air pollution in the uphill battle for cleaner air. Now, state government and environmental groups are addressing the energy problem and searching for alternative fuels to power the economy. Two such approaches are on the Nov. 4 election ballot for state voter consideration. They sound terrific but a careful review of their details unveils a devil in the works.

Proposition 10: This is oilman T. Boone Pickens baby to convert gasoline driven vehicles to compressed natural gas filled at service stations he owns throughout the U.S. and Canada. His company has shelled out $3.2 million to promote the proposition which calls for passage of a $5 billion bond to implement the plan and incentive rebates to buy and convert vehicles to alternative fuels. The breakdown: $210 million for demonstration tests, $1.5 billion in research and development, $250 million for renewable energy regeneration and $2.875 billion for rebates. The rebates go to hybrids such as the Toyota Prius in the amount of $2,000 for the first 55,000 purchases. But, $10,000 would be offered for new purchases of vehicles powered by natural gas, electricity or hydrogen of which the latter two are for now non-existent. It gets worse. Rebates of $50,000 would be offered by taxpayers for purchases of new trucks meeting the "clean air" rules. The problem is the proposition fails to account for the likely prospects new truck buyers travel to another state, sell and collect the rebate as pure 100% profit. Finally, when these vehicles hit the scrap heap in 20 years, state taxpayers will still be paying off the bonds.

Proposition 7: This proposition is so bad even most of the major environmental groups oppose it. Among its biggest complaint is the standards it sets down cannot be overturned except by a two-thirds vote of the Legislature or a special ballot initiative by voters. If something unforeseen occurs, fixing the problem would be politically difficult. The measure mandates 20% power from renewable energy sources by 2010, 40% by 2020 and 50% by 2025. The state already requires that from investor-owned utilities such as Southern California Edison but not municipalities such as the Los Angeles Department of Water and Power. Furthermore, small businesses selling excess solar generation less than 30 megawatts to utilities would most likely lose their rebates and be forced to close shop. The larger producers' sales would be sold to consumers at a guaranteed mark up of 10%. Control of the renewable energy transmission lines would be shifted from the Public Utilities Commission to the California Energy Commission without stripping the PUC from its current authority. Now, there's a litigator's dream come true as the turf war in the courts could last for years.

An admission: Granted the above prospective of Propositions 7 and 10 accentuated the negatives. The framers have honorable intentions. Perhaps they propose a path to lessen man's effect on global warming. Any step is a giant step towards that goal. At least Californians are trying to do their part. These two propositions stripped down to the basics are fraught with devilish details too overwhelming to cast their feet in stone.

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