updated 9/15/2009 6:28:34 PM ET 2009-09-15T22:28:34

Gov. Arnold Schwarzenegger signed an executive order Tuesday giving California the nation's most aggressive alternative energy standards, requiring utilities to get a third of their power from renewable sources by 2020.

Schwarzenegger said the order signed at a solar field in a Sacramento suburb will reduce California's dependence on fossil fuels and help clean its air while creating a reliable power supply for a state with 38 million people.

It also will ensure that California remains a pioneer in clean energy, he said.

"With this investment in renewable energy projects, California has a bright energy future ahead that will help us fight climate change while driving our state's green economy," he said in a statement.

The order came three days after state lawmakers passed legislation mandating the same goal but in a way the governor's office said was too restrictive.

Schwarzenegger has said he will veto the Democratic bills in part because they would limit how much wind, solar and geothermal energy utilities could import from other states. His office also said the bills would impose too many regulatory hurdles.

Hawaii has a 40 percent requirement but allows a longer timeframe, giving its utilities until 2030 to meet the standard. California utilities will have to generate 33 percent of their power from renewable sources a decade sooner.

Critics: No 'lasting assurances'
Supporters of the Democratic legislation criticized the executive order, saying it may not have the force of law.

"An executive order does not provide any lasting assurances because it could be overturned by a future governor, invalidated by a court challenge or rendered completely meaningless by the implementing agency," said Matt Freedman, an attorney with the consumer watchdog group The Utility Reform Network.

Under the executive order, state agencies that oversee utilities can begin writing regulations immediately to carry out the goal. California Air Resources Board Chairwoman Mary Nichols told reporters Monday her panel would develop a rule by next summer, in the middle of Schwarzenegger's final year in office.

The air board must adopt the regulations by July 31 of next year.

"I think any new governor is likely to want to continue that program," Nichols said.

Democrats, consumer advocates and environmental groups had sought limits on the amount of renewable power that could be imported from other states. They want utilities to build renewable plants in California, which they estimated could lead to as many as 200,000 new jobs.

The legislation by Sen. Joe Simitian, D-Palo Alto, and Assemblyman Paul Krekorian, D-Los Angeles, 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 producers of alternative energy in other states as a way to promote the development of clean power, even though that power would not reach California markets.

Key issue involves other states
The Schwarzenegger administration said the Democratic bills would reduce utilities' ability to exchange renewable power with other states in the West. For example, California already imports hydroelectric power from the Northwest and exports solar power to Nevada when it's needed most. The Democratic bill reduces utilities' flexibility in the market, the administration says.

"The restrictions on the way the electricity for renewables is set to be delivered are just unreasonable and produces ways of actually making it even more difficult to deliver to California," said Yakout Mansour, president and chief executive officer of the California Independent System Operator, which manages the state's power grid.

California already has one of the nation's most aggressive standards mandating use of renewable energy. Investor-owned utilities are required to generate at least 20 percent of their power from renewable sources by next year, but few are expected to meet that goal.

Utilities also will have difficulty complying with the standard in Schwarzenegger's executive order, primarily because the system for transmitting electricity from where it's produced to where it's needed is insufficient, said Nancy Ryan, a deputy executive director for policy at the California Public Utilities Commission.

A commission report says California would need about $115 billion in upgrades over 10 years to its transmission grid if utilities hope to meet the renewable energy standard. The language in the Democratic bills would have made the goal impossible to meet, Ryan said.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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