Calif. approves billions for clean power, rejects limiting green energy lobby

Source: Anne C. Mulkern and Debra Kahn, E&E reporters • Posted: Thursday, November 8, 2012

California voters yesterday passed a ballot measure that would generate as much as $2.75 billion for clean energy projects and rejected one that would have hobbled a green power ally.

With 81 percent of ballots counted, the Golden State by a vote of 60 to 40 percent approved Proposition 39, which changes how multi-state businesses are taxed. It is expected to generate $1.1 billion annually in new revenue, money for the general fund and green energy.

For the next five years, half of the proceeds will fund efforts that create jobs, improve energy efficiency and expand clean power.

Californians opted “to close a loophole that special interests were taking advantage of and get a bunch of money back into the state and create a bunch of jobs,” said Thomas Steyer, a San Francisco investment manager who largely funded the measure. He has been active in green energy causes in the state for several years.

“We’ve said from the beginning we thought this was a proposition that benefited every single Californian,” he added.

California voted down Proposition 32, which would have banned taking money from union members’ paychecks and using it for political purposes. That would hurt clean energy, environmental groups said.

Labor groups help persuade a wider swath of the population on green issues, said Sierra Club California Director Kathryn Phillips.

“What matters is that we have a coalition of people that appeal to the public that represent different public interests,” she said.

The clean energy funding mechanism, Proposition 39, would raise new state revenues by mandating that all businesses operating in California pay taxes based on their in-state sales. Under current law, companies can choose that method or one that calculates sales along with buildings and workers in the Golden State. Opponents of that option say it discourages building or hiring in California.

Some businesses, however, call the measure an unfair new tax.

Gino DiCaro, spokesman for the California Manufacturers & Technology Association, a trade group, did not immediately respond to a request for comment last night. But on Monday, he said that Golden State businesses already pay for energy efficiency as part of their electricity rates, which are higher there than they are in other states.

“The bigger problem is that it’s a tax increase on certain manufacturers in California,” DiCaro said.

Proposition 39 caps the money that clean energy programs can take in at $550 million annually for five years. The whole initiative sunsets after a decade.

Solar for schools

The new revenue from Proposition 39 is expected to be used to upgrade schools and other public buildings, including potentially adding solar power at those sites.

“The state not only gets more general fund dollars but also gets money to invest in lowering energy costs for our schools and public buildings, which is a double win for both the state’s coffers and clean energy,” said Jim Metropulos, Sierra Club California senior advocate.

The state Legislature will decide how the money is used, within the mandates of the proposition.

Steyer, who bankrolled the initiative with $29.6 million, said he would like to see the dollars used for energy efficiency and renewable power projects that continue to save the state money in reduced energy use.

“This is not money that we’re spending,” Steyer said. “This is money that we’re investing. One of the things we want to do is show it’s a very good deal for the citizens of California.”

If it’s successful, he said, it could lead to private building owners both in California and beyond retrofitting their buildings and adding renewable power.

“It’s the low-hanging fruit of the advanced energy revolution,” Steyer said.

“The whole point when you’re talking about carbon .. it’s global pollution,” he added. “Ultimately, everyone has to catch this fever and understand where we’re going, but it’s got to start somewhere and there has to be leadership somewhere.”

Unions can still spend on green issues

The Golden State rejected Proposition 32 on a 44.5 percent to 54.5 percent vote with 85 percent of the ballots counted.

With the likely failure of Proposition 32, environmental groups said labor could continue supporting green building policies.

“It was a blatant attempt by big business, corporate billionaires to silence working people and have the playing field all to themselves,” said Sandy Harrison, a spokesman for the State Building and Construction Trades Council of California. He said that if it had passed, Proposition 32 would have inhibited unions’ ability to support green construction standards and retrofitting programs.

Harrison could not say how much the group had spent to oppose Proposition 23, the 2010 initiative that would have postponed the state’s global warming goals, but that restrictions on union spending “would have hindered our ability to oppose it in a meaningful way.”

Environmental groups and unions often have teamed on key changes in the state, including helping enact California’s landmark climate law, A.B. 32, higher energy efficiency standards and a major increase in wind and solar installations, Michael Brune, executive director of the Sierra Club, has said.

California also has one of the most aggressive renewable power mandates in the country, requiring utilities by 2020 to make 33 percent of their power from green sources, which labor and environmental groups backed, he said.

The Yes on 32 side has not responded to repeated requests for comment.