New state regulations will give Lodi wiggle room in meeting strict renewable energy standards by 2020 without major rate increases, according to city officials who briefed Lodi City Council members on the issue Tuesday.
As part of a state effort to protect the environment and reduce reliance on nonrenewable energy sources — coal, natural gas and nuclear power — the city is required to have 33 percent of its energy portfolio include renewable energy sources such as solar or wind energy by 2020. Lodi is slightly exceeding the current 20 percent renewable energy standard.
The state regulations that took effect Tuesday allow the city to apply past renewable energy use through 2010 that exceeded the state requirements — known as “historic carryover” — to meet future standards.
“What this means is that our good deeds that have been done in the past (are) an accounting exercise to carry forward to meet future needs,” said Lodi Electric Utility Director Elizabeth Kirkley.
The state Air Resources Board will enforce the renewable energy standards, but has yet to set out specific penalties for failure to meet the requirements.
Councilman Larry Hansen worried that state lawmakers may raise the renewable energy requirements to 50 percent, or the California Energy Commission could revise the regulations, making it tougher to meet the standards and forcing the city to raise electricity rates to consumers.
“It’s very much akin to the state of California mandating improvements to our sewage treatment plant knowing that the city will increase the rates to pay for the costs,” Hansen said. “So it’s an unfunded mandate, because they know they can demand that of cities and the only options cities have is to increase the cost to the ratepayers.”
City Manager Rad Bartlam said city officials can’t speculate about future changes, but must work to meet the regulations currently in place.
He said with steep price drops for renewable energy in recent years, combined with other options for meeting the renewable energy portfolio requirements, the city should be able to meet the standards without significant rate hikes.
“Our rates will be lower than PG&E — that’s an absolute cap for us,” Bartlam said.
He also said that when the city began the process of meeting the 2020 requirement three years ago, the cost of renewable energy was more than $100 per megawatt. Current prices for renewable energy are slightly more than $70 per megawatt.
“So we’ve dropped 30 percent,” Bartlam said. “That’s just simply the scale of the business as it becomes more technologically advanced, and as more resources come online the cost per megawatt is dropping.”
Going forward, city officials will decide where to apply the city’s “historic carryover” and look for short-term contracts for renewable energy purchases, Bartlam said.
By entering into short-term contracts it will be easier for the city to take advantage of future price drops for renewable energy, he said.
Contact reporter Todd Allen Wilson at firstname.lastname@example.org.