Climate Change Crisis Strikes Again

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California Assemblyman Phil Ting introduced in February AB 1184, now in committee process.  Assembly Bill 1184 if enacted would do the following,

*   Establish the California Electric Vehicle Initiative, to be administered by California Air Resources Board in coordination with the California Energy Commission and the California Public Utilities Commission.

*   Authorize on or before September 1, 2018, until December 31, 2025, changes to the Clean Vehicle Rebate Project in order to ensure 1.5 million Electric Vehicles are deployed in California by 2025.

*   Promote, in coordination with the State Energy Resources Conservation and Development Commission and the Public Utilities Commission, electrical transmission and distribution grid benefits to electric customers, including, but not limited to smart charging for the benefit of the grid, integration of eligible renewable energy resources, maximization of the utilization of grid assets.

*   Establish a portfolio of funding resources in order to deliver point-of-sale rebates for various types of electric vehicles.

*   Require the Air Resources Board to establish up to a $3 billion funding portfolio and funding plan to implement California Electric Vehicle Initiative by September 1, 2018 from existing funding sources.

*   Require the initial rebate amount for an electric vehicle to be equal to the net purchase price of a compact car, and that the rebate declines over time to zero as the 1.5 million electric vehicle target is accomplished.

*   Require the funding plan to, among other things, take into account access and direct benefits from electric vehicles to low- and moderate-income consumers.

*   No later than February 1, 2018, begin a review to adopt revisions to all other vehicle electrification programs to ensure those programs consider funding benefits for disadvantaged individuals, low-income individuals, or both for all eligible vehicle types.

*   “Notwithstanding any other law, the state board may provide, to the extent funds are available, for projects funded by the state board from the Greenhouse Gas Reduction Fund, created pursuant to Section 16428.8 of the Government Code, for advance payment based on the total grant or contract to all entities if the state board makes a finding that those advance payments will reduce greenhouse gas emissions.”   (This last paragraph is placed in quotes, since it could mean anything.)

Clean air is, of course, a worthwhile objective.  However, it appears that California standards are moving targets that render our air forever in need of more cleansing – even if that means a massive electric car “giveaways.”   

Inconvenient Challenges of AB 1184

As of today, there are 10 vehicle-electrification bills pending in the California Assembly, either in floor or committee process.  These bills target a number of objectives intended to increase electric vehicle use, such as directing investor-owned utilities to develop programs and investments, providing sales tax exemptions, extending rebate programs to used vehicles, providing loan guarantees to low-income and high-risk individuals, developing networks of charging stations.

Should all these bills be enacted, Californians may or may not end up with cleaner air, but chances are they will end up with a state even more deeply mired in expenses.

Whether the electricity used to power the avalanche of electric vehicles envisioned by these bills is clean depends of where it comes from.  In California the sources are relatively clean.  However, natural gas, a finite source with some say questionable credentials, remains dominant.  Methane leaks from drilling, extraction, and transportation of natural gas, and methane is 34 times stronger than CO2 at trapping heat over a 100-year period.  Unconventional methods of extracting gas such as fracking can contaminate water and cause seismic abnormalities.

Renewable energy, especially solar, has gained traction over the years, but remains expensive compared to other sources of power.  California started providing direct subsidies to the solar industry in 2005, renewing expiring terms for the last 12 years.  Now California is adding substantial direct subsidies to the electric vehicle industry.

Can California Afford its Largesse?  

Assembly Bill 1184 comes with a price tag of $3 billion.  The money is supposed to come from “existing sources,” such as cap-and-trade, the 2017-2018 budget which has $1.3 billion in discretionary funding, and shifting funds from other existing clean vehicle programs.  The sources are vague, and there is no guarantee the price tag will remain as stated.  

$3 billion spread over the next 12 years might not seem much for a state with a $125 billion budget.  But it is a lot for a state that in 2017 ranks below average in financial solvency, at 43 out of 50, according to George Mason University Mercatus Center.  Perhaps Californians need to start saying NO to promises of largesse, letting the free market force entrepreneurs to compete in the production of better and cheaper products, and invest in basic clean-energy public transit.