Cost Impact in Electric Rates 30% - 60% Higher

Key local and state officials, representing the Burbank, Glendale and Pasadena Municipal Utilities, along with the Los Angeles County Economic Development Corporation, briefed a capacity audience of region business, elected and civic leaders on the costs and benefits of California’s climate change law, AB 32 (The Global Warming Solutions Act). The Forum, held at the Embassy Suites in Glendale, explained how climate change laws would specifically impact businesses and families. AB 32 is the most far reaching climate change law in the country requiring a reduction of greenhouse gas emissions to 1990 levels by 2020 — a 30% reduction. However, there are dramatic cost impact for both business and families.

The cities of Glendale, Burbank and Pasadena, recognize how ambitious AB 32 is and how important it is to clarify what it will mean for their communities, for business and families.

Phyllis Currie general manager of Pasadena Water and Power, served as moderator, stated, “the goal for this Forum was to illuminate the fact that AB 32 will affect all Californians. Consumers look to experts to explain how their businesses and families will be impacted. “

The California Air Resources Board (CARB) has been charged to develop a plan for California that will achieve the Greenhouse Gas (GHG) emissions reduction goals set forth in AB 32. In December of 2008 CARB released a Scoping Plan that is considered the blueprint for AB 32 implementation.  Dave Fogarty of the AB 32 Implementation Group offered an overview of California’s climate change law and the actions of the California Air Resources Board during 2008 and the objectives of 2009. 

Themes throughout the Forum surrounded concerns regarding AB 32 implementation from the increase in utility prices, revisions to land use planning and the impact on local businesses. “Our communities support AB 32 and are working to reduce harmful
greenhouse gas emissions (GHG) in the least costly manner. However, there will be costs to our communities; these should be kept to an absolute minimum,” stated Ron Davis, General Manager, Burbank Water and Power and President of California Municipal Utilities Association. Davis further affirmed, “With a 33% statewide Renewable Energy Standard by 2020 and implementing cost-effective energy efficiency measures, we can meet the GHG goals for the electric sector. Imposing an auction style cap-and-trade program on top of that, our Southern California communities’ electric rates will increase more than they have to.”

AB 32 implementation has broad implications. If not implemented in the most cost effective and technologically feasible manner, retail electricity rates will increase more than necessary. It’s critical CARB implements AB32 in a way that allows utilitiesto best serve their ratepayers. “The direction and intent of AB 32 is quite beneficial in that it will significantly increase efficiency and the use of renewable energy within California”, stated Glenn Steiger, General Manager of Glendale Water and Power. “However, costs associated with an emissions trading program could seriously impact the pace of providing efficient renewable power.”

Richard Bruckner, Director, Pasadena Department of Planning and Development, stated, “New laws in California link transportation, land use and climate change in unprecedented ways. Understanding the issues is critical to business planning.”

Panelist at the Forum, from the left: Ron Davis, general manager,Burbank Water & Power and President of California Municipal Utilities Association; Phyllis Currie general manager of Pasadena Water & Power and Glenn Steiger, general manager of Glendale Water & Power.