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The Honorable Arnold Schwarzenegger Governor of California State Capitol Sacramento, CA 95814 Dear Governor Schwarzenegger: I request your VETO of SB 1368 (Perata), which would establish a greenhouse gas emission performance standard, limiting the available power sources to meet California’s energy demands while substantially increasing the price of electricity to consumers and businesses. Reducing greenhouse gas emissions is a goal shared by all Californians, and should be accomplished in a manner that will not jeopardize our state’s economy, jobs, and energy supply. The approach proposed in SB 1368 will compromise these very aspects by establishing an unreachable greenhouse gas performance standard for baseload electrical generating resources. Specifically SB 1368: Discriminates against coal as a low cost fuel. Coal is one of our more abundant and less expensive resources. Although concerns exist regarding the impact coal has on the environment, new clean coal technology is being developed to burn coal more efficiently to reduce emissions and environmental impact. Limits Utility Purchases to short-term contracts. By restricting utility purchases to short time frame contracts, SB 1368 makes financing of clean coal plants with the latest technology virtually impossible. It eliminates long-term contracts with the cleanest coal-fired power plants, which will result in exacerbating the nation’s shortage of natural gas and require Californians to pay more for alternative electricity generation. Increases costs to businesses and retail-end customers. Limiting power sources in California will result in higher costs and electricity prices across the board, eventually reaching the pocketbooks of all Californians. This increase in energy costs will make California less attractive to business, having an adverse effect on the state’s economy. I have major concerns that SB 1368 will do more harm than benefit and lead California on the wrong path in reducing greenhouse gas emissions. For all of the reasons stated above, I request your VETO of SB 1368 (Perata).