California unlikely to see power market changes despite close governor recall election: experts

The outcome of the California governor recall election is unlikely to have immediate impacts on wholesale power markets or existing laws such as the one concerning state's goal of 100% clean energy by 2045, but the leading opponent would likely change the heads of the state's various utility commissions, industry experts say.

Gov. Gavin Newsom, who has had five recall attempts, faces 46 opponents on the Sept. 14 ballot. The leading challenger is Republican Larry Elder, a conservative talk radio host.

"It will be a close election but given the recent ground swell of support for the incumbent, it's likely that he'll squeak by," said Gary Ackerman, Foothill Services Nevada president and Western Power Trading Forum former executive director. "If not, and Elder becomes governor, I think there will be significant executive order changes but as such, nothing the governor orders can counter existing law which includes the [Renewable Portfolio Standard] and 100% clean energy by 2045."

Senate Bill 100, passed in 2018, sets the statewide goal of 100% carbon-free electricity by 2045.

"Any regulations which result from legislation such as RPS or Clean Energy targets would require a legislative act to repeal, so I would not expect much impact there either," said Morris Greenberg, senior manager of North American Power for S&P Global Platts Analytics.

California leads the US in utility-scale solar capacity with 13.620 GW and battery storage capacity at 1.390.6, according to the American Clean Power Association's Q2 report. California ranks sixth for wind capacity at 6.104 GW. The California Independent System Operator footprint set a record April 24 when renewables served 94.5% of the load. CAISO has 24.877 GW of installed renewables capacity, 57.8% is solar, while 28.5% is wind, according to its August Key Statistics report.

Governor appointments

The governor appoints commissioners to the California Energy Commission and the California Public Utility Commission, as well as members of the CAISO Board of Governors and 12 of the 14 members of California Air Resources Board. The governor's appointments then go to the state Senate for confirmation.

A new governor would have to wait until existing terms expire, Greenberg said about changing appointments. CEC commissioners serve staggered five-year terms. CPUC commissioners and CARB members serve staggered six-year terms. ISO board members serve staggered three-year terms.

"Most of California's energy policies are embedded in legislation. However, in terms of staffing at the various energy agencies, no doubt the heads of the CPUC, CEC and CARB would change," Ackerman said about possible changes if Elder is elected.

While many commissioners, especially chairs, may offer resignations at the beginning of a new administration, there would be less incentive for anyone to make such offers following this election given that a full general election for a new term of governor will take place in November 2022, WPTF executive director Scott Miller said.

Recall election background

Since 1913, there have been 179 recall attempts of state elected officials in California, according to the California Secretary of State's website. Eleven recall efforts collected enough signatures to qualify for the ballot and of those, the elected official was recalled in six instances. Of the 179 recall attempts of state elected officials, 55 were for governor.

This is the second governor recall attempt that has made it to the ballot, according to the California Secretary of State's website. The last California governor recall election in 2003 saw Arnold Schwarzenegger elected governor.

While polls have favored Newsom, it all comes down to voter turnout, Miller said.

"The democrats have an overwhelming advantage in registration and, while many democrats are not enthusiastic about the governor, they are generally united in opposing his recall based simply on the alternative being a very conservative republican," Miller said.

If Newsom were to lose, Miller's view is that very little will change in power markets. Electricity, unless there is a large blackout, would be a low priority item for any new governor with such a thin mandate, Miller said. There is about one more year until a general election for a new term for governor and the democrats would still have huge majorities in both the Assembly and the Senate, Miller added.

"I think many people share my view: I'm not a supporter of the governor but he hasn't done anything 'recallable' and the recall mechanism in this case is just a bad way to govern," Miller said.