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Economic Trends 2009: Energy Providers Under Pressure to Meet 2010 Deadline
Monday, December 22, 2008 5:51 PM


(Source: San Diego Business Journal)trackingBy Sharp, Tara

The next two years are critical to energy independence in California. Statewide, utilities providers are feeling the pressure to meet what Will Gabrielski, analyst at Broadpoint. Am-Tech, calls "the most aggressive renewable energy mandates" in the country.

In 2006, Senate Bill 107 created the state's Renewables Portfolio Standard, which requires energy providers to generate 20 percent of their electricity from renewable energy resources by 2010.

Predicting 2009 will be a "volatile" year, Gabrielski believes the expense and complicated nature of wind and solar farms make it unlikely that the state will meet its energy goals in time.

"The state of California is in a financial emergency," he said. "Access to capital right now is so low that it's tough to get the finances necessary. The utilities have the money, but are being more conservative with where they spend it because electricity demands have been declining and profits are down.

"Private companies need to raise money. Sixty to 70 percent of new solar and wind farms :across the nation are owned by utilities and the remaining 30 to 40 percent of those owned by private companies are having a hard time raising capital."

Sunrise Saga

But utility providers looking to build renewable energy projects face major obstacles - finding an expansive plot of land in a remote location and connecting the energy to the cities.

"You need large transmission lines, and that requires a substantial investment and also a substantial change in the way people view the transmission lines," said Gabrielski. "There are political and environmental hurdles to getting the transmission lines built quickly."

Sempra Energy, parent of San Diego Gas & Electric and Southern California Gas, is hoping to develop wind, solar and geothermal projects in the Imperial Valley. Its plan to connect these energy sources to San Diego

County through the proposed Sunrise Powerlink line in Anza- Borrego Desert State Park and East County areas was thwarted by public opposition. The California Public Utilities Commission approved the Sunrise Powerlink project Dec. 18 via a new route.

The project is expected to be completed in the summer of 2012, according to Mike Niggli, chief operating officer at Sempra.

"Within this next year ... we will finalize the engineering activities, complete cultural and environmental studies, and we will have all the towers and access roads specifically located," Niggli said.




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