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Governor Signs Two Bills to Spur Renewables, Green Manufacturing

Mar 31, 2010 - California Energy Markets

Gov. Arnold Schwarzenegger Monday signed SB X8 34, a bill designed to expedite the licensing of large solar-power plants in the desert and create a state-run mitigation program for environmental impacts. On Wednesday Schwarzenegger signed SB 71, a measure that would eliminate sales and use taxes on clean-technology manufacturing equipment.

The governor signed SB X8 34 at a press conference at NextEra's Harper Dry Lake Solar Electric Generating System in Hinckley, currently the world's largest operating solar plant.

The bill authorizes the California Department of Fish and Game to buy and preserve land as mitigation for the impacts of large solar-thermal and photovoltaic projects on endangered and threatened species. The law will allow developers to pay a per-acre fee into a fund managed by DFG rather than carry out mitigation strategies themselves. Those fees will include the costs of acquiring and managing land as well as administrative costs of the program.

The bill pertains only to large solar-thermal and PV projects proposed in California's Colorado and Mojave deserts-within the planning area of the state Desert Renewable Energy Conservation Plan-that are seeking federal stimulus money and whose applications were accepted as complete as of Feb. 1 this year.

There are about 11 proposed solar-thermal projects being reviewed at the CEC and four PV projects under review by local counties that meet those requirements. Combined, the projects represent about 5,000 MW, according to Sen. Alex Padilla (D-San Fernando Valley), the bill's sponsor and chair of the Senate Energy, Utilities and Communications Committee.

According to the CEC, the list of solar-thermal projects includes BrightSource Energy Inc.'s Ivanpah Electric Generating Station; Solar Millennium's Palen, Blythe and Ridgecrest projects; NextEra's Genesis and Beacon projects; Tessera Solar's Calico and Imperial Valley projects; Abengoa Solar's Abengoa Mojave Solar Project, the Palmdale Hybrid Power Project; and SolarReserve's Rice Solar Energy Project.

"Today's action will help speed up the process for some of these projects to break ground this year and qualify for federal stimulus funding," Schwarzenegger said in a statement.

The bill also requires solar developers covered by the bill to pay a retroactive permitting fee of $75,000 to DFG to assist in the permitting process. Renewables developers previously have been exempt from such fees. It also allows the CEC to spend more to retain staff and allows developers to pay the commission additional funds for third-party contractors to assist in analyzing projects.

The change in the way mitigation strategies will be carried out is perhaps the biggest piece of the bill. While the amount of mitigation will still be determined on a project-by-project basis, depending on project impact, the bill will help streamline the mitigation process, said Kevin Hunting, chief deputy director at DFG.

"It is simply a means to provide more certainty to everyone" from environmental groups to developers and their backers, he said.

The measure requires DFG within 60 days to develop an interim mitigation strategy focusing on habitat conservation, preservation and species enhancement.

Typically, mitigation plans for these types of projects include land acquisition and enhancement to make it better for target species, and long-term management, Hunting said.

Predicting costs for enhancement and long-term management is relatively easy, Hunting said, but land-acquisition costs are less predictable. Desert land can range from $300,000 to $500,000 an acre, he said.

The per-acre fees for the so-called in-lieu mitigation will actually be decided when a developer is issued a permit. Those fee negotiations could be an issue.

As of Wednesday, no developers had specifically said they would opt into the program, Hunting said.

Keely Wachs, a spokesman for BrightSource Energy, said the company was still looking at the implications of the bill. But he said he expected that BrightSource could make a decision on the program relatively quickly to bring "certainty into the [project] cost structure."

Alice Harron, senior director of development at Solar Millennium, said in an e-mail that the company would continue to explore all options for mitigation until the DFG develops its final regulations for the in-lieu mitigation program.

A diverse group of developers, trade associations and lobbying groups, environmental groups and utilities supported the bill. That group included the Chamber of Commerce, the Large-scale Solar Association, First Solar, NextEra, Tessera Solar, Defenders of Wildlife, Southern California Edison, the Nature Conservancy, and the Trust for Public Land.

Carl Zichella, director of Western renewables at the Sierra Club, expressed cautious optimism that the mitigation model proposed for fast-tracked renewables projects in the state could be a model going forward.

"We think it has a lot of promise," he said. "We're going to see how it works."

On Wednesday, the governor was at the headquarters of Nanosolar Inc. to sign SB 71, also sponsored by Padilla.

The bill specifically targets investments in clean technology, alternative energy and advanced transportation to help boost job growth. SB 71 passed the Legislature Monday.

"We are sending a clear message to manufacturers: locate and expand in California," Padilla said in a statement.

The sales-and-use-tax exemption will run through Jan. 1, 2021 and is capped at $100 million a year [Mavis Scanlon].


Updated: 2003/07/28