MERCED — Under newly proposed legislation, the Merced Irrigation District could see an easing of green-energy requirements, a move officials say would benefit local ratepayers' pocketbooks.
Under California law, power utilities have to provide 33 percent of their energy from renewable sources by the end of 2020. Power providers also must hit benchmarks of 20 percent renewable energy by 2014 and 25 percent by 2017.
As only about 5 percent of the district's energy comes from green power, meeting those requirements likely will mean significant rate hikes for consumers, said General Manager John Sweigard.
"We believe the state's renewable energy program is going to place an undue burden on our community, which is already among the most impoverished in the nation," he said.
In response to the district's concerns, state Sen. Anthony Cannella, R-Ceres, and Assemblyman Adam Gray, D-Merced, have introduced legislation that would allow power generated at the New Exchequer Dam hydroelectric project to offset a portion of the district's green-energy requirement.
Past legislation has tried to get similar changes for all large-scale hydroelectric projects, which don't qualify as renewable if they exceed a size cap. But SB 591 and its companion bill, AB 793, would only affect the MID, say the authors.
"We've narrowed it down to (be) Merced-specific," Gray said. "Merced has some unique circumstances that make it reasonable, not the least of which are high unemployment and our rates of poverty."
The MID provides about 450,000 megawatt-hours of electricity a year. Under the proposed legislation, the district would be able to deduct the 300,000 megawatt hours a year it will get from its hydroelectric project, leaving only 33 percent of 150,000 megawatt-hours to come from renewable energy.
Under the bill, the MID estimates that it would have to spend an additional $15.5 million to come into compliance. Without the legislation, district officials say, that number would double.
"For me, it's all about saving the ratepayers several hundred dollars a year," Cannella said.
If the bill passes, about 6,500 residential customers would see increases over the next seven years that would total about $25 per month on their electric bill, according to MID officials. Without the legislation, that price bump would be $50 a month.
At the same time, the cost of renewable energy has dropped recently.
Private companies hoping to provide renewable-energy projects for electric utilities have flooded the market with more clean power than what the state needs to meet its long-term goals.
As a result, the cost of buying renewable energy decreased 30 percent from 2009 to 2011, according to a report issued by the California Public Utilities Commission.
The California Division of Ratepayer Advocates estimates that, by the end of the decade, the green-energy requirements will cost ratepayers only 5 percent more.
The MID buys wind power from a company called Iberdrola in Solano County, and hydropower from a federal energy project called the Western Area Power Administration. The rest of the electricity that the MID sells to its roughly 8,000 customers is purchased from the Turlock Irrigation District.
The MID will take over the New Exchequer Dam hydroelectric project and its revenue from the Pacific Gas and Electric Co. in July 2014. Under a contract signed in 1960, PG&E agreed to build the hydro project in exchange for controlling 50 years of its power generation.
Reporter Joshua Emerson Smith can be reached at (209) 385-2486 or email@example.com.