T-Rex: Power Behind the Scenes

It sounds like a technical question: As utilities comply with state laws requiring use of renewable energy, how much of that energy can come from out of state?

But, drowned out by all the din of the governor's race, a behind-the-scenes fight over that question may have a huge impact on the the number one concern of Californians: jobs.

Here's the short version: the state's Public Utilities Commission, which regulates utilities, has said utilities can get no more than 25 percent of their required renewable energy through out-of-state credits (called Tradeable Renewable Energy Credits, or TRECs, or T-Rex, if you prefer). Why? Regulators, backed by unions and legislators, want to encourage the production of renewable energy inside California, so the state can reap the jobs and tax revenues that come from its renewable mandates.

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Utilities and the Schwarzenegger administration are arguing against the 25 percent limit on out-of-state credits. They think requiring so much in-state renewable energy will cost utilities -- and ultimately ratepayers -- too much at a difficult economic time. And if businesses have to pay more for energy, that could cost California jobs.

The state is in uncharted territory here -- no other state has adopted our regulatory regime and mandates on renewable energy. It's hard to know what the right policy is, and it's far from clear who will emerge as the winner in this complicated fight.

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