California Plans $15 Billion Renewable Energy Initiative

Proposal estimates state will save $10-$15 billion by not buying as much natural gas.

Source: Bloomberg EvWorld 2002.02.05

Sacramento, California, Jan. 18 (Bloomberg) -- California's
newly formed power authority may spend as much as $12
billion in public and private funds to build alternative-energy
plants and make government buildings and schools more
energy-efficient.

Under the plan by the California Consumer Power and
Conservation Financing Authority, the $5 billion in bonds the
authority is allowed to sell would be leveraged to produce
additional financing. The 39-page plan [pdf] released today is a draft
and will be used for gathering public comment, authority
spokeswoman Linda Chou said.

"We are very pleased with the report," said Dan Jacobson,
legislative advocate with the California Public Interest Research
Group, a consumer group. "This report predicts a savings of
between $10 billion and $15 billion over the next fifteen years"
by using renewable resources rather than natural gas to produce
power.

The power authority was created by California lawmakers
during the height of the state's power crisis, which left
California's largest utility bankrupt and its second-largest
insolvent. The authority was formed to prevent the blackouts
and high wholesale power prices that plagued the state last
year.

Under the proposal, the authority would spend at least $5
billion by 2006 on geothermal, wind, solar and other renewable
power resources, and on upgrading state and local government
buildings and schools. Several financial institutions and power-
plant developers, including the Federal National Mortgage
Association, have said they would like to provide co-financing,
the authority said.

The $5 billion in bonds, if they are issued, may be sold by the
end of the year, Chou said. The authority has hired a financial
adviser to explore ways other than a bond sale to finance the
power plant and conservation projects, she said.

A final version of the power authority's report is due to
Governor Gray Davis and the California Legislature by Feb. 15.