Last Tuesday, Governor Schwarzenegger issued an executive order that vetoed the California climate bill and replaced it with one of his own design. The vetoed bill contained a strict clause that would prevent out-of-state clean electricity, like the booming solar industry of Nevada, from competing with California companies. Schwarzenegger's replacement legislation is intended to allow free access to the California energy market, which leaves some worried about how California will be able to compete with electric companies in less regulated markets.
Governor Schwarzenegger was quoted in the New York Times as saying "I am totally against protectionist policies because it never works... You have to understand that we get our water from outside California. We get it from the Colorado River, for instance. Why can we get the water from the Colorado River but we can’t get Renewable energy from outside the state? We get most of our cars from outside the state; why can’t we get renewable energy?"
To keep Renewable Energy jobs in state, California lawmakers established subsidies for solar power generators, which has been considered green job funding. Other States with renewable energy standards have considerably stricter rules as to where the electricity is generated. Montana's renewable energy standard (RES) — which will be 10% in 2010 and 15% in 2015 — has to be met by utilities operating within Montana, and within the specific geographical boundaries of the Western Reliability Organization. Ohio's RES contains a clause that eventually requires 50% of renewable energy to be purchased in-state.
A recent article in the New York Times states that while these are clear instances of Green industry protectionism — and perhaps Constitutionally illegal — some states have turned to a more shrewd approach. States like Colorado and Missouri as examples, as these states give "extra credit" to electricity companies that buy renewable energy from in-state generators.
This isn't expected to cause major feuds between states, as actual enforcement of the standard falls on each state individually. In California's case, despite having the ability to import clean electricity, the Golden State is virtually guaranteed to miss their current renewable energy target according to the California Public Utlities Commission. The primary utility companies only achieved 13% renewables in 2008, which is the only year that renewable growth exceeded power consumption growth, which the CPUC largely attributed to a sagging economy.
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