Texas Republican Gov. Rick Perry boasted something in early July that sounded pretty tough to swallow, considering Texas' reputation as a state that produces freewheeling oil men and little else in terms of energy production: "Texas surpassed California to become the national leader in wind energy." Surprisingly, this Texas brag has turned out to be true! How could Texas, the home state of our dear President George Bush, and the terrain of the fossil fuel captains of the world, beat cool, green and progressive California on wind power, one of today's most popular power sources?

At a time when California's electricity grid was again on the verge of rolling blackouts, this battle of state egos sheds some light on gaps between common perceptions and surprising reality. Apparently, California's image as a leader on green power sources could be nothing more than a mirage.

In 2002, the California Legislature passed a law that goes by the wonky moniker Renewable Portfolio Standard (RPS). Inspired by Europe -- which prefers government mandates instead of relying purely upon the "magic" of free markets -- the RPS sets numerical targets for renewable energy for utilities. Renewable energy developers then compete to supply the clean electricity. Wind power has been the first choice of most since it is currently the cheapest renewable energy resource.

Texas recently increased its RPS goal to supplying 10 percent of its total electricity consumption by 2015 with renewable energy. California surpassed that benchmark well over a decade ago. The current California policy is to have renewable sources supplying 20 percent of the state's total electricity from by 2010 and then 33 percent of total state supply by 2020.

But having plans on paper is one thing. Getting projects into the ground and up and running is another. Before getting into the nitty-gritty of why Texas beat California at wind power, let's set the context with a little bit of history.

California launches world's renewable industry

California was held up as a role model on energy policy throughout the world for decades beginning in the 1970s, when the state came up with the novel idea that reducing energy consumption could stave off the building of nuclear power plants up and down the state's coastline. Unlike other states, California banned oil as a fuel for electricity generation and halted construction of coal-fired power plants due to concerns about air pollution during the same decade. Yet the state's real claim to fame came in the 1980s, when California literally gave birth to the world's renewable energy industry.

In the course of just five years, a combination of tax credits, long-term power purchase contracts and state technical assistance jump-started the wind, solar, geothermal and biomass power industries. The passage of the federal Public Utility Regulatory Policy Act (PURPA) in 1978 allowed for private companies to build new power plants relying upon renewable fuels. California was the most aggressive state when it came to implementing PURPA. Among the incentives offered for wind power developers were generous state investment tax credits (which augmented federal tax credits), standard long-term utility power purchase contracts that featured fixed prices during the first five to 10 years of operation, and a state-funded wind resource assessment that identified California's best wind energy opportunities.

Approximately $1 billion was diverted from federal and state taxes into wind farms between 1981 and 1985 to jump-start the world's wind power industry in California. The end result of this effort was the addition of 1,700 megawatts (MW) of new wind power capacity to the state's power plant portfolio. Generally speaking, 1 MW of electricity can power 225 to 300 U.S. households. That translates into California's powering of as many as 500,000 homes with this amount of wind power capacity online some 20 years ago. Both federal and state investment tax credits were terminated in 1986 due to publicity surrounding the abuse of this investment tax shelter. Democratic Rep. Pete Stark of Hayward, Calif., led the fight to terminate the investment tax credits by proclaiming, "these aren't wind farms, they're tax farms."

Yet California's public policies created a global market for wind as well as other renewable energy technologies. The various federal and state financial incentives played a critical role in attracting almost $2 billion in private capital (some of which came from foreign investors) to develop wind farms in California in less than five years. Because of the investment tax credits, wind turbine technology achieved the maturity in five years that typically takes 15 to 30 years in secluded government labs, argued proponents of these financial incentives. Ed DeMeo, former Electric Power Research Institute (EPRI) manager of renewable energy programs, notes that the use of tax credits was "far more effective than the federal wind R&D program. Though not perfect, the credits helped improve the technology bit by bit." In the 1990s, things started to unravel. Leading renewable energy companies such as Kenetech of Livermore, Calif., the world's largest wind power company, went belly-up due, in large part, to California's unstable power market conditions.

A planning process for new power plants that was supposed by to be "biennial" dragged out for eight years, and then was overturned by federal regulators. Some 1,458 MW of planned new supply, including approximately 500 MW of new wind and geothermal capacity, was never put into the ground. In the 2lst century, California's business climate for the cutting-edge energy technologies of tomorrow has deteriorated to the point where many of the nation's leading clean power companies -- a few still based here -- have all but thrown in the towel. During the energy crisis of 2000-2001, when California needed renewable energy more than any other time in its history to avoid rolling blackouts and high-priced wholesale spot power purchases, very little new renewable energy capacity came online, despite developers being ready, willing and able. Perhaps the clearest sign that California has relinquished its leadership role in promoting clean power technologies is the unfolding story of wind power. California was once home to more than 80 percent of the world's total wind power capacity.

But the state stood virtually still between 1994 and 2004, and the state's share of global wind power capacity has shrunk to single digits. Instead, coal imports into California increased from 16 percent to 21 percent. Believe it or not, California now uses nearly twice the amount of coal as renewable energy! The history of Texas energy policy has been dominated by unfettered consumption of oil, natural gas and coal. Due to aggressive energy efficiency programs, California uses less than half as much electricity per dollar of gross state product as does Texas. Because it sealed itself off from the rest of the country and refused to be part of the national electricity grid, Texas increased its consumption per capita as California's per capita power consumption went down over the past few decades.

Texas did not even begin to seriously entertain renewable resources until 1999, when legislation signed into law by then-governor George W. Bush included a RPS goal that was quickly surpassed by companies such as Enron Corp. and Reliant Energy, two firms implicated in the California energy crisis of 2000-2001. These two firms voluntarily exceeded the state RPS goals, citing the volatility and the state's heavy reliance on natural gas as an electricity fuel.

Living in the present

According to the American Wind Energy Association (AWEA) as of the end of June this year, Texas surpassed California in terms of the amount of installed wind power capacity, bringing 2,370 MW online. This compares to California's current installed capacity of 2,323 MW. Because California's wind farm fleet is so old, most of its machines only produce power 20 percent of the time. This compares to modern wind turbines at some of the best wind sites in Texas generating electricity 40 percent of the time. (Remember, these machines can only spin when the wind blows!) Both states are plagued by a lack of fresh investment in the transmission lines required to bring electricity from remote wind farms to urban consumers. In California, this lack of progress on new transmission has stalled new development, whereas in Texas, existing wind farms cannot always get their power to big urban areas such as Dallas-Fort Worth.

Mike Sloan, managing consultant with the Wind Coalition, an Austin-based wind energy advocacy organization, claims the state's accumulative wind power capacity will total almost 2,500 MW by the end of 2006. "Texas has managed to keep its renewable energy rules pretty straightforward. California would be well-served to heed the words of Elvis: 'A little less conversation, a little more action, please,'" joked Sloan. AWEA projects that 500 MW of wind power could come online by year's end in California, but insiders say those numbers are overly optimistic, and that by the end of the year, Texas will likely retain its current lead. Regardless of California's dithering, wind power has never been more popular. Current trends suggest that global wind power capacity will reach 75,000 MW by the end of 2006.

"When it comes to renewable energy sources such as wind power, California has earned a reputation for providing a lot more words than megawatts," said V. John White, executive director of the Center for Energy Efficiency and Renewable Technologies (CEERT). "Everyone in California is in favor of renewable energy sources, but we can't seem get to get our collective act together to get stuff into the ground to actually produce clean electricity."

Both Republican Gov. Schwarzenegger and Democratic gubernatorial candidate Phil Angelides trumpet the virtues of wind and other renewable energy sources in campaign speeches, as do scores of other state politicians. They know it polls well. But Texas has proved that when it gets down to getting the job done, the home state of our current president -- and the center of this nation's fossil fuel industry -- is better at transforming vision into reality.

"The California Legislature has set aside hundreds of millions of dollars in ratepayer funds to help buy down the cost of new renewable energy resources, but almost none of the money has been invested," White said. "Our electric utilities spend hundreds of thousands of dollars on television ads, touting their green energy programs, and yet California today is increasingly vulnerable to unstable natural gas supplies and price spikes."

Bob Gates, who helped develop some of the first wind farms in California in the early '80s, and is now a senior vice president with Santa Barbara-based Clipper Wind, is clearly frustrated with the slow pace of new wind development in his home state. "In the '80s, we had rules that created a stable market, which is very important for the financial side of things. Today, we worry excessively. California is now considered a laggard. I think we need a wholesale retooling of California's approach. It's just too laborious to get things done in California today. We've known we needed more transmission access to the Tehachapi wind resource area way back in 1983, and here it is 2006, and we are still scratching our heads!" said Gates. He concluded, "To say that permitting facilities goes faster in Texas is a dramatic understatement."

Of course, the air quality in Texas is in jeopardy due to the simultaneous licensing of 17 new power plants that burn coal, the dirtiest of all fossil fuel sources. In this case, the ease of permitting new power plants works against the environment. Texas state legislators are likely to exempt these power plants located upwind of the smoggy Dallas-Fort Worth area from a federally mandated plan to improve regional air quality. In fact, TXU Energy is upon local lignite, the most polluting firm of coal! In a sign that simplicity is not always a virtue, Texas regulators will treat each of these coal units as if they operated in isolation, not looking at the big picture of the accumulative pollution these plants will bring to the Dallas-Fort Worth region.

The mayor of Dallas, as well as other cities, is rising up in protest. "With established wind patterns, those emissions are headed straight for North Texas, especially the six counties around Dallas-Fort Worth. How can Dallas-Fort Worth, which is a significant nonattainment area, possibly clean up the air when 17 new coal-burning plants are on the drawing board and the smoke headed our way?"

Looking to the future

California still leads the nation on solar, geothermal, and biomass renewable energy resources. There is a long list of technical and esoteric reasons why California, despite its impressive looking public policies, is falling behind on its RPS targets. Instead of pointing fingers or going into numbing detail about why California has fallen behind on wind -- but is now leading the world on solar power -- is the legacy of its past success.

In a sense, California has become the victim of its own success. The state's private utilities may run ads touting their "green" power supply portfolios, but they then work behind the scenes to fight adding new supply, playing state agencies against each other, and bringing in armies of lawyers to sabotage the best meaning policies.

But the wind industry itself has also played a role in this. Costs for wind power are going up, not down, due to steel shortages and the simple math of supply and demand. (The same phenomenon is happening with solar power.) The wild popularity of wind and solar has led to shortages of raw materials, which then translates into long waits and higher prices for these clean power systems.

It seems a balance between the ever-present search for perfection that epitomizes today's architects of California's energy policies -- and the simplistic business-friendly attitude of Texas -- might well be the answer. Since California's utilities no longer make any money from power generation provided by wind and other renewable sources built by independent power producers, they have little incentive to move forward.

As someone who moved to California in 1980, a time that marked the very beginning of global wind development on the golden hills that made this state famous, it is certainly ironic that the visionary and entrepreneurial zeal that characterized then Gov. Jerry "Moonbeam" Brown's approach to government would dissipate into today's bureaucratic muck.

With issues such as global climate change, the terrorist threat, and clean air on the table, California, Texas and every other state needs to play a role. So far, 22 states and the District of Columbia have adopted an RPS to foster new markets for clean, renewable energy sources (for more, read the report Race to the Top: The Expanding Role of U.S. State Renewable Portfolio Standards)

California once boasted the world's most forward-looking and sophisticated power supply system -- and renewable energy sources were a key part of why the Golden State earned this reputation. Perhaps the competitive spirit -- and widespread disdain for Texas -- can light a fire under the state's regulators, utilities, developers and NGO's.

Who will be ahead come 2010? I'm not a betting man, but I'm keeping my fingers crossed that my colleagues in California will rise to the occasion and show those good old boys in Texas that we can stop sucking our thumbs and start moving around a little dirt.

One of the few success stories to emerge from California's ill-fated experiment with restructuring its power market is solar power. Over the last two years, installations of this clean non-polluting energy source have increased by 1,000 percent.

In poll after poll, solar energy consistently ranks as people's first choice when they're asked what fuel source they prefer to generate their electricity. Given concerns over national security and vulnerability of fossil fuel supplies, and the growing evidence confirming a link between fossil fuel burning and global climate change, increasing the nation's reliance upon solar power has never made more sense.

Last year, utilities mounted a campaign to increase the cost and complexity of "net metering," a policy pioneered in California that allows a owner of a solar energy system connected to the grid to barter with their utility. When the sun is shining, solar photovoltaics (PV) transform sunlight into electricity. If the owner of the solar system doesn't need the power produced by solar panels, the electricity can be sent back to the grid under net metering. When the sun isn't shining, the utility, in essence, returns the electricity back to the customer. The meter spins backwards and forwards until production and consumption is netted out on a monthly or annual basis.

Due to a last-minute grassroots lobbying effort by solar advocates and customers, proposed utility changes to net metering for large-scale solar systems were defeated in the closing days of the last legislative session. This year, the California Public Utilities Commission (CPUC) has proposed what amounts to a new tax on customer-owned solar systems that would increase the cost of this non-polluting electricity source by up to 40 percent.

If California's powerful private utilities -- Pacific Gas & Electric (PG&E), Southern California Edison (SCE) and San Diego Gas & Electric (SDG&E) -- have their way, charges ranging from 2 to 5 cents/kWh will be added to each kilowatt hour produced by solar systems that, like energy efficiency measures, reduce the need to purchase electricity from other often more polluting and sometimes more often more expensive sources.

Why would the CPUC increase costs of solar power that would effectively wipe out a 40 percent subsidy granted to solar PV under other existing state programs?

Large industrial customers were recently authorized to retain electricity purchase contracts with outside parties even though small consumers are still required to continue buy overpriced and dirty long-term power supplies purchased by the State of California during the height of the energy crisis in 2001. In exchange for the right to buy cheap and dirty power, the CPUC will require these large customers to pay an "exit fee" or tax to help pay their fair share of the state's investment in long-term fossil fuel supply.

PG&E, SCE, and SDG&E would now like to also charge individual customers who install a solar electric system on their facility the same (or higher!) charge as they levy on large industrial customers who entirely leave the system. This proposed charge is fundamentally unfair for several reasons:

Individuals, companies and government facilities that install solar systems still buy most of their power from utilities. Therefore they pay the same overall higher rates to pay off state investment in power supplies as all other utility customers.

Customer-owned solar power provides public benefits by delivering non-polluting electricity during peak demand periods, when the dirtiest electric generators often come on line to avoid blackouts. Large customers who entirely leave the system offer no comparable benefit.

The proposed utility "solar tax" directly contradicts existing state policies designed to encourage expanded use of on-site solar power. On top of that, implementing the new solar tax will create administrative costs for utilities that will likely supersede the miniscule amounts of money collected from solar customer/generators.

CPUC Commissioner Loretta Lynch has an alternative proposal that would moves in a better direction than the initial proposed CPUC policy. Her proposal would exempt solar customers with net metering arrangements from "exit fees." Though an improvement, this proposal still falls short of a sane way to maintain momentum on a power source ideally suited to California's sunny climate.

All solar customers connected to the grid should be exempt from exit fees. Does anyone propose to tax people who reduce their reliance upon grid power by being more energy efficient? Of course not! In fact, the customers are rewarded for that beneficial behavior with financial incentives. Solar customers who use all of the solar energy their PV panels can crank out should not face stiff financial penalties either because they are reducing peak demand on the grid, too.

Governor Davis signed a new law that would double the amount of renewable energy generated in California over the next decade or so. This law, known as a Renewable Portfolio Standard, is allegedly among the primary accomplishments of the Davis administration in responding to the energy challenges still facing California.

Isn't it time we had some clear and compelling leadership from the top on down the line on renewable energy sources? If the CPUC's majority proposal is adopted, California will be pulling the rug out from under solar power, the one electricity source that can bring "power to the people" while helping the economy and the environment.

To take action and get involved, visit VoteSolar.org and the California Solar Center.

Peter Asmus has covered energy issues for 15 years. He is author of "Reinventing Electric Utilities: Competition, Citizen Action and Clean Power" and "Reaping The Wind: How Mechanical Wizards, Visionaries and Profiteers Helped Shape Our Energy Future," both published by Island Press.

SEATTLE, WA. -- Most of us hardly give a passing thought to electricity, let alone what resources are used to produce what we call "power." Electricity's details remain mysterious because this elixir of the metropolis is virtually unseen and has always been supplied by a faceless "utility."Our lights, computers, stereos, refrigerators -- and soon even our cars -- run on a substance Nikola Tesla, a scientist many considered mad, wanted to give away for free. His arch-rival Thomas Edison came up with a measuring and pricing scheme that became the basis for electric utilities -- now the world's largest monopoly business enterprise.Most power plants burn fuel -- coal, oil, natural gas -- which creates steam to drive a turbine that generates electricity as well as pollution. In the past, the average person could do little about choosing where his or her power came from -- or what it cost.That is changing now. By breaking up electric monopolies our leaders are either getting rid of an onerous responsibility or empowering individuals to better the world. Perhaps both. Consumers in California and Pennsylvania can choose their own power supplier and 20 other states will soon follow.Thus the last of the great monopolies is following telecommunications. Soon, the way we power ourselves will have a lot more in common with the Internet and cell phones than today's antiquated energy delivery system.At least that was the picture painted at a recent Seattle symposium on "Clean Energy: The Next High Tech Revolution." According to Denis Hayes, one of the architects of the first Earth Day thirty years ago, the future will rely on "quantum power," which takes advantage of "flows instead of stocks" of fuel. He believes our ultimate fuel will be liquid hydrogen.Government can play an important role, Hayes told a crowd fairly equally split among business types, egghead scientists and bureaucrats with their subsidized laptops. Hayes pointed out that the Department of Defense jump-started today's information revolution by making the first purchases of integrated circuits.During the first year, 1962, 100 percent of sales went to the military. But two years later, just over half was being purchased for defense applications, and by 1970 some 90 percent went to the private sector."If the federal government would make a $4 to $5 billion annual purchase of solar photovoltaics -- the same approach that worked with integrated circuits -- this clean power would be the cheapest source of electricity for half the world within four years time," said Hayes.In contrast, Sam Wyly, board chairman of GreenMountain.com, a leading green power retailer, gave free markets a bear hug. "Washington D.C. has copped out," he said.Wyly, a well-heeled Texas Republican and a major backer of George Bush Jr's presidential campaign, said the most valuable lesson to be learned from computers and telecommunications "is to skip the poles and wires in the deregulated world." Noting that cell phones dominate new communication systems in the developing world, he said, "We can do the same with electricity with micro-generation systems," and not bother to install the grids which dominate the distribution of electricity in the industrialized world.Chris Flavin, senior vice president of Washington, DC-based World Watch, says the shift toward cleaner, decentralized power systems is already underway. The fastest growing power source in the world over the course of the last decade was wind power, up an average of 26 percent a year throughout the 1990s."As we enter a new century, our current energy system has too many liabilities. It is highly polluting, highly centralized and not at all consistent with the way the world is moving."Local smaller power sources offer all kinds of benefits -- they eliminate the need for tearing up streets and installing substations, for example.A third of the world's current total population -- live in the developing world without electricity. This can be interpreted as a sign of poverty but it can also be seen as a trillion dollar business opportunity.Quantum power installations in remote places make it possible for young people to stay in their villages. Micro-power stations, linked to computers, the Internet and wireless communication systems, may allow many rural villages to preserve their cultures -- while joining the information revolution.This apparent paradox may be a pipe dream, but Flavin pointed out that developing countries typically lack fossil fuels and have an abundance of renewable sources such as the sun and wind.Hayes, Wyly and Flavin all seem to see solar power -- the darling of the 1970s -- and other cleaner sources finally finding their place in the sun. The future of electricity in the developing world clearly holds our fate. Thirty years from now, we will surely know whether we did too little too late.