California Governor: Still Hope For Renewable-Energy Bill

SAN FRANCISCO -(Dow Jones)- California Gov. Arnold Schwarzenegger
said Wednesday that he would work to help push through an
ambitious renewable-energy bill that the state legislature failed
to pass before a midnight deadline.

Schwarzenegger said he would work with lawmakers on the
renewable-energy bill while negotiating the state budget.

"We can fine-tune that so we get it done," he said, speaking at a
press conference webcast from Sacramento where he discussed the
outlook for a bipartisan agreement on the state's budget.

California's Democratic-controlled legislature has been unable to
reach agreement with Schwarzenegger and minority Republicans on
how to close an estimated $19 billion budget deficit.
Schwarzenegger has called for reforming the state's
pension-funding scheme, among other changes, as part of a budget
agreement, but Democrats have demurred, proposing tax and fee
increases instead.

One area on which Schwarzenegger and Democrats agree is the need
to expand California's renewable-energy mandate to require
utilities to use renewables for one-third of the power they sell
by 2020. The mandate, among the most ambitious in the world, is a
central component of the state's 2006 plan to combat climate
change, a centerpiece of Schwarzenegger's administration.

A state Senate bill, called SB 722, would establish the 33%
renewable-energy mandate as a separate law. Despite broad
support, the legislature ran out of time Tuesday night for a
final vote on the measure before a midnight deadline. While SB
722 is technically dead, the bill could be revived if it were
included in the budget process, which is ongoing. It will be up
to Schwarzenegger to decide whether to allow the bill to be
included in the budget process, a move that he indicated he would
consider.

The legislature passed a similar renewable-energy bill last year,
but Schwarzenegger vetoed the measure over a disagreement about
how much out-of-state electricity would be allowed under the
program. This year, the two sides have been much closer to
agreement on a renewable-energy bill, although details, including
a limit on out-of-state power purchases and compliance rules,
were still being ironed out. Lawmakers also were working out
final provisions, pushed by Schwarzenegger, for simplifying the
approval process for construction of new solar and wind farms in
California.

Schwarzenegger, who will leave office at year's end due to term
limits, and Democrats have extra motivation to nail down a 33%
renewable-energy law, as the climate law that envisioned the
mandate is under threat by a proposal set for the November
ballot.