On November 4th, California voters rejected both of the proposed renewable energy measures.  Proposition 7, the Renewable Energy Generation Initiative, would have required government-owned utilities to generate 20% percent of their electricity from renewable energy by 2010, a renewable energy portfolio standard already applicable to private utility companies.  Proposition 7 also would have raised the requirement for all utilities to 40% by 2020 and 50% by 2025.  Many argued that, while well-meaning, the measure was poorly drafted, and would have created loopholes for compliance, resulted in higher electric rates and forced small renewable energy companies out of business.  Opposed by leading environmental groups, renewable power providers, taxpayers, business and labor, Proposition 7 was defeated 65% to 35%. 

Proposition 10, the Alternative Fuel Vehicles and Renewable Energy measure, would have authorized the state to sell $5 billion in general obligation bonds to finance various renewable energy and alternative fuel vehicle incentives, largely green car rebates.  It would have cost the state about $10 billion over 30 years to repay the bonds.  This proposition was heavily backed by Clean Energy Fuels Corp., a company founded by Texas billionaire T. Boone Pickens that operates natural gas filling stations throughout the U.S. and Canada.  Opponents, which included environmental groups and consumer watchdogs, criticized the measure as special interest legislation that would have provided large subsidies to compressed natural gas.  Voters rejected the measure 60% to 40%. 

The voters’ overwhelming rejection of the two renewable energy measures does not mean that Californians support clean, renewable energy and alternative fuel vehicles any less now than before.  It actually reflects that Californians are thinking more critically about what solutions would really work.

In contrast to Propositions 7 and 10, Californians voted in favor of Proposition 1A, the Safe, Reliable High Speed Passenger Train Bond Act, which approves a $9.95 billion bond issue to construct a clean, efficient high-speed train linking Southern California, the Sacramento/San Joaquin Valley and the San Francisco Bay Area.  Approved 52% to 48%, this 220 miles-per-hour bullet train is expected to relieve 70 million passenger trips a year that now clog California’s highways and airports.  It is a real solution that would reduce greenhouse gases and California’s dependence on foreign oil.

For further information about this topic, please contact Akin Gump.