SACRAMENTO, Calif. – Gov. Arnold Schwarzenegger's office said Saturday that he would veto legislation requiring a third of California's energy to come from renewable sources by 2020, choosing instead to mandate the change through an executive order.

The Democratic bills that passed the state Legislature just before the end of the legislative session Friday would have set up the most aggressive renewable energy standards in the nation.

But they also sought to limit the amount of energy from sources such as wind, solar and geothermal that could come from out-of-state. Schwarzenegger and some energy producers said the legislation would set up too many regulatory hurdles.

"The poorly drafted, overly complex bills passed by the Legislature are protectionist schemes that will kill the solar industry in California and drive prices up like the failed energy deregulation of the late 1990s," Schwarzenegger's communications director, Matt David, said in a statement Saturday.

The governor's office didn't immediately explain how Schwarzenegger would implement the goals of the legislation through the executive order. Supporters worry that it would not have the same strength of law as the bills would have.

The Independent Energy Producers, which represents companies that provide 80 percent of California's renewable energy, opposed the legislation, despite having sought a higher standard.

Jan Smutny-Jones, the association's executive director, said some of the language in the bills would have limited the placement of solar plants in some areas of the state, threatening projects that are already underway and others that are expecting to get funding through the federal stimulus package.

"The bill basically is sort of a dog's breakfast of bad ideas in terms of how it moves us forward," he said.

Consumer advocates and environmental groups sought the limits on out-of-state power because they wanted the bulk of California's renewable energy to be generated within the state. They said it would help promote job growth.

Environment California urged Schwarzenegger to reconsider.

"Creating a hard mandate with the force of law behind it for this 33 percent-by-2020 goal is critical to meeting California's global warming goals, much championed by Gov. Schwarzenegger, as well as bringing upward of 200,000 green jobs to the state," the group's legislative director, Dan Jacobson, said.

The legislation would have allowed utilities to import renewable energy generated outside California as long as the power came from a plant that connects to California's electricity grid.

Utilities also could buy a limited number of credits from out-of-state producers of alternative energy as a way to promote the development of clean power, even though that power would not reach California markets.

Republicans said the restrictions could drive up energy costs for Californians by as much as $10 billion a year; A backer of the legislation, Sen. Joe Simitian, D-Palo Alto, said concerns over cost increases were being exaggerated.

California already has one of the most aggressive standards of the 31 states that require utilities to generate a certain amount of their power from renewable sources, according to the Arlington, Va.-based Pew Center on Global Climate Change.

In Hawaii, utilities must generate 40 percent of their power from renewable sources by 2030 — a longer timeframe than the goal being debated in California.

California's investor-owned utilities also are legally required to generate at least 20 percent of their power from renewable sources by next year, but few are expected to meet that goal.

The California Public Utilities Commission also has said the state's utilities will need to build additional transmission lines and other infrastructure to move more renewable energy. Construction could cost $115 billion over 10 years.

Schwarzenegger sent legislators a detailed letter in May outlining his requirements for a renewable energy standard, including protection for utility ratepayers, removing barriers to building more transmission lines and creating a healthy energy market.

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On the Net:

Read the bills, SB14 and AB64, at http://www.senate.ca.gov and http://www.assembly.ca.gov




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   By Cassandra Sweet
   Of DOW JONES NEWSWIRES

SAN FRANCISCO (Dow Jones)--California lawmakers approved one of the world's most aggressive renewable-energy mandates early Saturday in legislation that would require the state's utilities to use renewable sources like the sun and wind to generate a third of the power they sell by 2020.

The proposal is a centerpiece of the state's 2006 plan to combat climate change, which has broad public support. And although it's more aggressive than a similar federal proposal pending in Congress, the legislation could influence decisions in Washington.

The legislation, in two bills passed by the legislature, will require approval from California Gov. Arnold Schwarzenegger, who has been a vocal advocate for the 33% renewable energy mandate. However, as Schwarzenegger has been under intense lobbying pressure by some power-plant developers to veto the legislation, raising questions about how he will react.

A spokesman for the governor said Schwarzenegger hadn't yet taken a position on the bills and wouldn't do so until they landed on his desk.

The plan has been mired in a dispute over the extent to which utilities should be able to buy renewable power generated in remote areas of states like Montana and Wyoming - power they're unable to use because it's generated too far away to be delivered. One of the bills, from the state Senate, limits such contracts.

California's investor-owned utilities currently are required to use renewable sources for 20% of the power they sell by 2010, with no restriction on long-distance renewable energy contracts.

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