Debate was still going on when midnight rolled around.

The California Legislature last night failed to pass SB 722, a billthat would have required California public utilities to obtain 33percent of their power from "new renewables," i.e., solar, wind,geothermal, and biomass, but not large-scale hydroelectric dams. Debatewas proceeding on a companion bill when August 31 turned into September 1 and the session ended.

The failure is a blow to environmentalists, but also to outgoingRepublican Governor Arnold Schwarzenegger, who has made growingCalifornia’s green economy one of the major pillars of hisadministration. A.B. 32, the carbon regulation passed by the state years earlier, has created 500,000 jobs, according to Bill Weihl, Google’s green energy czar.

But that’s the good news: Arnold still has time before the electionto call a special session of the legislature to get it passed. He’s done it before. Think of the movie tie-ins. "What is good? To see the statesenators driven before you and hear the lamentations of the women."

The bill has widespread support among Silicon Valley executives.There are exceptions. Two semi-retired Valley executives — former eBayCEO Meg Whitman and fired Hewlett Packard CEO Carly Fiorina — areagainst it and are, respectively, running for Governor and the U.S.Senate. Whitman has also vowed to suspend A.B. 32, which former eBayexec turned VC Steve Westly calls a "colossal mistake."

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