BILL NUMBER: SB 426 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 13, 2005
INTRODUCED BY Senator Simitian
FEBRUARY 17, 2005
An act to amend Section 26011.6 of the Public Resources
add Article 2 (commencing with Section 25571) to
Chapter 6.5 of Division 15 of the Public Resources Code, and to amend
Sections 1002 and 1003 of the Public Utilities Code, relating
to energy.
LEGISLATIVE COUNSEL'S DIGEST
SB 426, as amended, Simitian. California Alternative
Energy and Advanced Transportation Financing Authority: renewable
energy program. State Energy Resources Conservation
and Development Commission: liquified natural gas plants.
The existing Warren-Alquist State Energy Resources Conservation
and Development Act establishes the State Energy Resources
Conservation and Development Commission (Energy Commission) and
requires the Energy Commission to prepare a biennial integrated
energy policy report. The act requires the Energy Commission to
certify sufficient sites and related facilities that are required to
provide a supply of electricity sufficient to accommodate projected
demand for power statewide. The act grants the Energy Commission the
exclusive authority to certify any stationary or floating electrical
generating facility using any source of thermal energy, with a
generating capacity of 50 megawatts or more, and any facilities
appurtenant thereto.
Existing law authorizes the Public Utilities Commission (CPUC) to
regulate public utilities, including electrical corporations and gas
corporations. The existing Public Utilities Act prohibits any
electrical corporation or gas corporation from beginning the
construction of, among other things, a line, plant, or system, or of
any extension thereof, without having first obtained from the CPUC a
certificate that the present or future public convenience and
necessity require or will require that construction (certificate of
public convenience and necessity). The act requires that the CPUC
consider certain factors in determining whether to issue a
certificate of convenience and necessity, but requires that the
issuance of a certificate by the Energy Commission for an electrical
generating facility and facilities appurtenant thereto, is conclusive
as to all matters determined thereby when the CPUC is determining
whether to issue a certificate of public convenience and necessity.
This bill would require the Energy Commission to make a liquefied
natural gas (LNG) needs assessment study that assesses demand and
supply for natural gas and alternatives to natural gas to meet energy
demands, and to determine the number of LNG terminals, if any,
needed to meet the state's projected natural gas demand. The bill
would require the LNG needs assessment study to be completed no later
than November 1, 2006, and incorporated into its biennial integrated
energy policy report. The bill would require the Energy Commission
to hold public hearings to consider the results of the LNG needs
assessment study and to provide an opportunity for public comment.
All costs of the LNG needs assessment study would be funded from fees
charged to persons or entities applying for permits to build and
operate a LNG terminal according to mechanisms that would be added by
SB 1003 of the 2005-06 Regular Session. The bill would require the
Energy Commission to compare and rank every site for which an
application for a permit to build and operate a LNG terminal has been
filed, based upon certain criteria and in consultation with
specified entities, and would require the Energy Commission to issue
permits only according to the rank order or priority, and as
necessary. The bill would authorize the Energy Commission to issue a
permit to build and operate a LNG terminal only if it determines that
the technology chosen for a particular site will have the least
adverse public health, safety, and environmental impacts then
feasible.
This bill would require that with respect to any LNG terminal
that requires a certificate of public convenience and necessity from
the CPUC, that no certificate be issued unless the LNG terminal has
first obtained a permit from the Energy Commi ssion, and
that the issuance of a permit by the Energy Commission is conclusive
as to all matters determined thereby when the CPUC is determining
whether to issue a certificate of public convenience and necessity.
The bill would make other conforming changes.
The bill would provide that it shall only become operative if SB
1003 of the 2005-06 Regular Session is also enacted and becomes
operative on or before January 1, 2006.
Existing law requires the California Alternative Energy and
Advanced Transportation Financing Authority to establish a renewable
energy program, and requires that emergency regulations adopted by
the authority for the program be repeal 180 days after their
effective date unless specified conditions are met.
This bill would instead require that the emergency regulations be
repealed 190 days after their effective date unless those specified
conditions are met.
Vote: majority. Appropriation: no. Fiscal committee: no
yes . State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 26011.6 of the Public Resources Code is amended
to read:
SECTION 1. The Legislature finds and declares all of the
following:
(a) It is the policy of the state to meet California's energy
growth by optimizing energy conservation and resource efficiency and
by reducing per capita demand to ensure a clean, safe, and reliable
supply of energy for California.
(b) It is the policy of the state to be sensitive to the impact of
the state's energy policy on global climate change and environmental
impacts in host countries that export natural gas.
(c) It is the policy of the state to accelerate the use of
renewable energy resources wherever feasible and to ensure a diverse
and affordable portfolio of fuel sources to minimize the opportunity
for supply interruptions.
(d) The state has a lead role in decisions regarding the siting
and design of new onshore and offshore infrastructure for the
importation of liquefied natural gas that results in impacts to
public health, safety, and the environment.
(e) Laws and regulations enacted by the state to address consumer,
public health, safety, and environmental impacts of new onshore and
offshore imported liquefied natural gas infrastructure, where more
protective, should not be preempted by weaker, less protective
federal laws and regulations.
(f) Decisions regarding the importation of liquefied natural gas
should be based on a comprehensive review of current and projected
natural gas supply and demand in California, and alternative sources
of supply.
(g) Construction and operation of liquefied natural gas onshore
and offshore infrastructure may commence after completion of a
rigorous evaluation that analyzes the need for liquefied natural gas
and the relative merits of pending and future proposals with respect
to business, consumer, public health, safety, and environmental
impacts.
SEC. 2. Article 2 (commencing with Section 25571) is added to
Chapter 6.5 of Division 15 of the Public Resources Code
, to read:
Article 2. Evaluation of Potential Liquefied Natural Gas
Terminals and Alternatives
25571. (a) The commission shall not issue a permit to construct
and operate a liquefied natural gas terminal, except in accordance
with this article.
(b) The commission shall issue a permit, or more than one permit,
to construct and operate a liquefied natural gas terminal, only
according to the rank order priority established in this article and
as necessary to further the purposes of this chapter.
25571.2. (a) The commission shall make a study of the need for
liquefied natural gas terminals to meet the state's energy demands,
to be known as the LNG Needs Assessment Study. The study shall assess
all of the following:
(1) The future demand for natural gas in California.
(2) The future supply of natural gas in California available from
domestic production and imported into California through interstate
pipelines, supply available from domestic production within
California, and supply available from foreign production and imported
into California through international pipelines from Mexico and
Canada, including any liquefied natural gas terminal proposed to be
built outside the state that would be the source for natural gas
imported into the state.
(3) All supplemental sources of natural gas and natural gas
alternatives that can reasonably be expected to be available to meet
the projected demand for natural gas, including, but not limited to,
conservation and energy efficiency programs, steps to increase
production and importation of natural gas from other states, Mexico,
and Canada, steps to increase available supply from federally owned
or federally regulated supplies, and steps to increase energy
supplies available from renewable energy resources, including solar,
wind, geothermal, and biomass.
(b) The LNG Needs Assessment Study shall determine the number of
liquefied natural gas terminals, if any, needed to meet the state's
projected natural gas demand and whether it is economically feasible
to meet the state's future natural gas needs without building a
liquefied natural gas terminal.
(c) The LNG Needs Assessment Study shall be commenced by January
1, 2006, shall be completed no later than November 1, 2006, and shall
be incorporated into the integrated energy policy report prepared
pursuant to Section 25302.
(d) The commission shall hold at least two public hearings to
consider the results of the LNG Needs Assessment Study and to provide
an opportunity for public comment. At least one public hearing shall
be held in any county that is the proposed site for which an
application for a permit has been filed with the commission, to build
and operate a liquefied natural gas terminal.
(e) All costs incurred by the commission to conduct the LNG Needs
Assessment Study, including costs for any temporary personnel or
consultants, shall be funded by fees charged to persons or entities
applying for permits to build and operate a liquefied natural gas
terminal.
25571.4. (a) The commission shall compare and rank every site for
which an application for a permit has been filed with the commission
to build and operate a liquefied natural gas terminal. The
comparison and ranking shall be based on the following criteria:
(1) The extent to which the facility is necessary to meet the
future energy needs of California.
(2) The extent to which environmentally less damaging alternatives
are feasible to meet California's future energy needs.
(3) The extent to which a no-build alternative is or is not
economically feasible for California's economy.
(4) All effects on the environment, public health, safety, and
welfare, including any disproportionate negative effects upon low
income or disadvantaged communities.
(5) The economic merits of the respective proposals, including,
but not limited to, the reliability and sustainability of the
proposed supply.
(b) In conducting the comparison and ranking, the commission shall
consult with all entities of local government that would be affected
by a proposed liquefied natural gas terminal, the California Coastal
Commission, the State Lands Commission, the Public Utilities
Commission, the Office of Emergency Services, the Department of Fish
and Game, the State Water Resources Control Board, the affected
California regional water quality control board, the State Air
Resources Board, the Federal Energy Regulatory Commission, and the
United States Coast Guard.
25571.6. The commission may issue a permit to build and operate a
liquefied natural gas terminal only if it determines, based on the
record, that among the available technologies for producing natural
gas through a liquefied natural gas process, that the technology
chosen for a particular site will have the least adverse public
health, safety, and environmental impacts then feasible.
25571.8. (a) The commission shall be the lead agency for issuing
any approval necessary for the construction or operation of a
liquefied natural gas terminal in California.
(b) This article does not limit any existing authority of state
government pursuant to Division 13 (commencing with Section 21000).
SEC. 3. Secti on 1002 of the Public
Utilities Code is amended to read:
1002. (a) The commission, as a basis for granting any certificate
pursuant to Section 1001 shall give consideration to the following
factors:
(1) Community values.
(2) Recreational and park areas.
(3) Historical and aesthetic values.
(4) Influence on environment, except that in the case of any line,
plant, or system or extension thereof located in another state which
will be subject to environmental impact review pursuant to the
National Environmental Policy Act of 1969 (Chapter 55 (commencing
with Section 4321) of Title 42 of the United States Code) or similar
state laws in the other state, the commission shall not consider
influence on the environment unless any emissions or discharges
therefrom would have a significant influence on the environment of
this state.
(b) With respect to any thermal powerplant or electrical
transmission line for which a certificate is required pursuant to the
provisions of Division 15 (commencing with Section 25000) of the
Public Resources Code, no certificate of public convenience and
necessity shall be granted pursuant to Section 1001 without such
other certificate having been obtained first, and the decision
granting such other certificate shall be conclusive as to all matters
determined thereby and shall take the place of the requirement for
consideration by the commission of the four factors specified in
subdivision (a) of this section.
(c) With respect to any liquefied natural gas terminal for which a
permit is required pursuant to the provisions of Article 6.5
(commencing with Section 25570) of Division 15 of the Public
Resources Code, no certificate of public convenience and necessity
shall be granted pursuant to this chapter without a permit having
been obtained first, and the decision granting the permit shall be
conclusive as to all matters determined thereby and shall take the
place of the requirement for consideration by the commission of the
four factors specified in subdivision (a) of this section.
SEC. 4. Section 1003 of the Public Utilities Code
is amended to read:
1003. Every electrical and every gas corporation submitting an
application to the commission for a certificate authorizing the new
construction of any electric plant, line, or extension, or gas plant,
line, or extension, not subject to the provisions of Chapter 6
(commencing with Section 25500) or Chapter 6.5 (commencing with
Section 25570) of Division 15 of the Public Resources Code,
shall include all of the following information in the application in
addition to any other required information:
(a) Preliminary engineering and design information on the project.
The design information provided for thermal electric plants shall
include preliminary data regarding the operating characteristics of
the proposed plant, including, but not limited to, the annual
capacity factor, availability factor, and the heat rate for each year
of the useful life of the plant, line, or extension.
(b) A project implementation plan showing how the project would be
contracted for and constructed. This plan shall show how all major
tasks would be integrated and shall include a timetable identifying
the design, construction, completion, and operation dates for each
major component of the plant, line, or extension.
(c) An appropriate cost estimate, including preliminary estimates
of the costs of financing, construction, and operation, including
fuel, maintenance, and dismantling or inactivation after the useful
life of the plant, line, or extension.
(d) A cost analysis comparing the project with any feasible
alternative sources of power. The corporation shall demonstrate the
financial impact of the plant, line, or extension construction on the
corporation's ratepayers, stockholders, and on the cost of the
corporation's borrowed capital. The cost analyses shall be performed
for the projected useful life of the plant, line, or extension,
including dismantling or inactivation after the useful life of the
plant, line, or extension.
(e) A design and construction management and cost control plan
which indicates the contractual and working responsibilities and
interrelationships between the corporation's management and other
major parties involved in the project. This plan shall also include a
construction progress information system and specific cost controls.
SEC. 5. This act shall only become operative if Senate Bill
1003 of the 2005-06 Regular Session is also enacted and becomes
operative on or before January 1, 2006.
26011.6. (a) The authority shall establish a renewable energy
program to provide financial assistance to public power entities,
independent generators, utilities, or businesses manufacturing
components or systems, or both, to generate new and renewable energy
sources, develop clean and efficient distributed generation, and
demonstrate the economic feasibility of new technologies, such as
solar, photovoltaic, wind, and ultralow emission equipment. The
authority shall give preference to utility-scale projects that can be
rapidly deployed to provide a significant contribution as a
renewable energy supply.
(b) The authority shall make every effort to expedite the
operation of renewable energy systems, and shall adopt regulations
for purposes of this section and Section 26011.5 as emergency
regulations in accordance with Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code. For
purposes of that Chapter 3.5, including Section 11349.6 of the
Government Code, the adoption of the regulations shall be considered
by the Office of Administrative Law to be necessary for the immediate
preservation of the public peace, health and safety, and general
welfare. Notwithstanding the 120-day limitation specified in
subdivision (e) of Section 11346.1 of the Government Code, the
regulations shall be repealed 190 days after their effective date,
unless the authority complies with Sections 11346.2 to 11347.3,
inclusive, as provided in subdivision (e) of Section 11346.1 of the
Government Code.
(c) The authority shall consult with the State Energy Resources
Conservation and Development Commission regarding the financing of
projects to avoid duplication of other renewable energy projects.
(d) The authority shall ensure that any financed project shall
offer its power within California on a long-term contract basis.