On September 29, California’s Greenhouse Gas Emissions Performance Standard Act (SB 1368) was signed into law by Governor Arnold Schwarzenegger. The bill ensures that future long-term investments in electricity generation for California come from sources that emit low amounts of carbon dioxide and other heat-trapping gases. SB 1368 establishes a greenhouse gas (GHG) performance standard applicable to "baseload" generation resources seeking extended access to California markets. These are the workhorse power plants that are designed to meet electricity needs around the clock. The new standard prohibits any more long-term investment in these facilities unless their air emissions are as low, or lower, than emissions from a clean and efficient natural gas power plant. The state’s utilities are devising long-term plans to purchase new energy that include literally billions of dollars in investments over the next decade. Depending on how those investments are made, they could substantially increase global warming emissions for the next 40 years or longer. This bill doesn’t say "no" to electricity from coal, but it puts the coal industry on notice that it needs to use much cleaner and more efficient technologies if it wants California financing.

SB 1368 is a key part of this year’s California global warming legislative package. Together with AB 32 (see above), which was signed by the governor on September 27, 2006, it will put California firmly on a path to a clean energy future, while protecting California’s economy from future regulatory costs. SB 1368 was supported by utilities and power generators, including PG&E, Southern California Edison, Sempra and Calpine.