After two failed attempts, California is moving ahead with the most aggressive renewable energy goal in the country. Today the State Assembly passed SB 2x, a bill that requires utilities to get 33% of their electricity from renewable sources like solar and wind, by 2020.

By all accounts, utilities will need to add an unprecedented amount of renewable energy to meet the goal. Peter Miller of the Natural Resources Defense Council says that will spur new technology and green job opportunities. “There’s worldwide competition to lead this industry, which is the growth industry of the 21st century,” said Miller. “And this moves us, I believe, to the front of the pack.”

If the 33% renewable portfolio standard (RPS) doesn’t sound new, that’s because it isn’t. The goal was originally set by former Governor Arnold Schwarzenegger in a 2008 executive order. Supporters knew that an executive order could be overturned by a future governor, but two previous bills aiming at cementing the goal failed to make it into law.

Miller says that’s why today’s passage is such big news for the renewable energy industry. “Businesses need that stable foundation to be confident that these investments are in line with the long term direction of the state,” he said. The State Senate has already passed the bill and Governor Jerry Brown is widely expected to sign it into law.

Critics of the bill cited cost as a major concern, since renewable energy still comes with a higher price tag than its fossil counterparts. Under the bill, the California Public Utilities Commission must devise a cost containment strategy, something that isn’t in place under the executive order. Concerns over the cost of renewable energy emerged recently in this report from the Division of Ratepayers Advocates.

Notably, the bill puts the RPS back into the hands of the CPUC. Before leaving office, Schwarzenegger had directed the California Air Resources Board to adopt a 33% mandate as part of his climate change goals.

California’s three largest utilities have yet to meet the 2010 RPS of 20%, though they are expected to in the next year or so. Both solar and wind projects have faced delays due to lawsuits and permitting challenges, which has led many to conclude that the 33% goal may be out of reach (there’s more on the specific challenges in our 33×20 series).

NRDC’s Miller says he sees the permitting process getting better. “I think we’ve learned a lot about the siting process,” he said. It took some real work among all the stakeholders and we need to continue that effort to ensure that we can achieve these goals, because they are ambitious.”

The report, released Wednesday, predicts modest growth in the state economy over the next 10 years, including growth of 2.4% in both personal income and gross state product with or without the law.

During a Wednesday conference call,  CARB chairman Mary Nichols told reporters that sectors where California is strong, such as renewable energy and informational technology, will benefit from AB 32.

“California is uniquely positioned to benefit because this is the direction in which our economy is going anyway,” she said.

Nichols added that industries heavily dependent on petroleum will also benefit, but that they will have to go through a transition.

“We will see economic benefits overall by 2020,” said Nichols, “but it will be easier for some than for others.”

The report was reviewed by the 16-member Economic and Allocation Advisory Committee (EAAC), an independent panel of policy, business and economic experts appointed by Nichols and California Environmental Protection Agency Secretary Linda Adams.

The report finds that AB 32 provides, “neither a huge boost nor a major negative impact on California,” said Larry Goulder, chair of the EAAC and of Stanford’s Economics Department on a call Wednesday with reporters.  “These findings are not that different from other studies that have been done.”

The Air Board’s original analysis was questioned earlier this month in a report from the non-partisan Legislative Analyst’s Office, which projected a mixed bag of pluses and minuses, with a short-term negative impact on jobs.

CARB’s first economic projections were criticized by others, including UCLA economics professor Matthew Kahn.   Kahn said he is much happier with this new report because of adjustments made to the baseline scenario and because of the independent review made by EAAC panel, which he called a “dream team” of economists.  However, the report still falls short, Kahn says, because its macroeconomic approach doesn’t identify how specific industries and businesses will fare under AB32.

“The report released today is about averages. And where I think we need more research is in how individual firms will be affected,” said Kahn. “When I was in graduate school, I had a professor who used to say ‘if your feet are in the fridge and your head is in the oven, on average, you’re ok’ and I always thought that was a funny joke, but I think it’s apropos about California today.”

Also on Wednesday, Kahn published an opinion piece in the LA Times with co-author James L. Sweeney, director of Stanford’s Precourt Energy Efficiency Center, arguing that a study frequently cited by opponents of AB 32 is seriously flawed.  The study, known as the Varshney/Tootelian analysis, estimates that the law will cost small businesses $50,000 a year and each household $3,857 a year once the new rules kick in.

Opponents of AB 32 are advocating for a ballot initiative that would suspend the law’s regulations until the state economy improves and the state unemployment rate drops to 5.5%. It’s currently pegged at 12.5%, officially.

You can read more about of the current situation in a piece by Ben Gemen at E&E Daily, but to access the article directly, you must be a subscriber.  For the rest of us, Climate Progess has posted the story here.