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California's Green Wall

A new law dampens coal-by-wire prospects.

Fortnightly Magazine - March 2007

encouraged the utility to reject the coal contract on environmental grounds. The governor’s letter said, in part, “We all recognize the need for a stable and affordable supply of electricity, but we have a responsibility to generate it in a way that is environmentally sensitive.”

Why would a small town the size of Truckee, Calif., get such enormous publicity and pressure on a seemingly trivial power contract? City officials originally had planned a vote on the contract in December 2006 before the new law went into effect in January but were caught off-guard by the public outcry. They said rejecting the coal contract from IPA likely would raise the rates on the district’s 12,000 customers by 30 percent. A startled Reed Searle, general manager of IPA, said the company “has heard California’s demand for cleaner energy.” Other California cities and municipalities will face similar decisions in the next few years.

Pacific Gas and Electric Co. (PG&E), a unit of PG&E Corp., is offering Climate Smart, a voluntary program aimed at environmentally conscious residential consumers. The company estimates that as many as 4 percent of its customers may sign up to become carbon neutral—which for PG&E would be relatively painless since the company generates power predominately from hydro, nuclear, and natural gas—which are either carbon-free or low-carbon fuels. The cost is around $4 to $5 for the average residential customer per month—or about the cost of a morning café latte.