BILL ANALYSIS
AB 1318
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Date of Hearing: July 8, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
AB 1318 (V. Manuel Perez) - As Amended: July 6, 2009
Policy Committee: Natural
ResourcesVote:7-0
Urgency: Yes State Mandated Local Program:
Yes Reimbursable: Yes
SUMMARY
This bill requires the executive officer of the South Coast Air
Quality Management District (SCAQMD) to transfer "eligible
electrical generating facilities emission credits" to the
Competitive Power Venture (CPV) so as to allow the construction
and operation of CPV's Sentinel Energy Project in Riverside
County. Specifically, this bill:
1)Requires the SCAQMD's executive officer to transfer emission
credits to eligible electric generating facilities to permit
up to the following emission amounts:
a) 0.1 tons (200 pounds) per day of sulfur oxides (SOx).
b) 0.6 tons (1200 pounds) per day of fine particulate
matter (PM10).
2)Establishes criteria for eligible electrical generating
facilities such that the only such qualifying facility is
CPV's Sentinel Energy Project.
3)Requires the SCAQMD's executive officer to transfer emission
credits necessary to allow essential public services,
including sewage treatment facilities, prisons, police and
fire fighting facilities, schools, hospitals, landfill gas
control or processing facilities, water delivery operations
and public transit.
FISCAL EFFECT
Negligible state costs.
AB 1318
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COMMENTS
1)Rationale. The author describes the purpose of this bill as
to require SCAQMD to issue priority emission credits to a
specific project-CPV's Sentinel Energy Project-that qualified
for the credits prior to a lawsuit that prevents the issuing
of additional credits, as well as to other essential public
services. The author states CPV's project is needed to
provide reliable and secure sources of electricity for the
entire Los Angeles region and to provide jobs in an area hard
hit by the ongoing economic downturn, and that the need for
essential public services is self evident.
2)Background.
a) SCAQMD Emissions Credits. Existing law authorizes air
districts to establish offset systems, by which reductions
in air pollution at one source may be used to offset future
increases in air pollution at another source. Under the
system developed by SCAQMD, a facility must obtain
sufficient offsets credits before being allowed to increase
emission of certain pollutants. SCAQMD created a priority
reserve account of offsets to provide credits for essential
public services and other priority sources, including power
plants.
b) SCAQMD Emissions Credit System Challenged in Court. The
Natural Resources Defense Council (NRDC) and other groups
challenged SCAQMD's creation of a priority reserve account
of offsets, claiming that the rule change allowing the
priority reserve offsets violates the requirements of the
California Environmental Quality Act (CEQA). The superior
court ruled in favor of the plaintiffs and prohibited
SCAQMD from using its amended rules until it completes a
CEQA review of the rules.
c) Previously Approved Projects Stranded. In keeping with
the court decision, SCAQMD is not able to issue offset
emission credits for thousands of previously approved
projects throughout Southern California. The result is
that many projects cannot go forward- among them CPV's
Sentinel Energy Project-until SCAQMD is able to issue more
emissions credits.
AB 1318
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3)Supporters , including several industry groups and
representatives of local government, claim the CPV project is
critical to ensuring that Southern California maintain an
adequate power supply and avoid harmful events, such as
brownouts. These supporters additionally note the state's
renewable energy goals will require reliance on intermittent
energy sources, such as sun and wind power, which must be
supported by energy facilities like Sentinel that can provide
a steady supply of power.
4)Opponents , including several environmental organizations,
question whether it is appropriate to impose a legislative
remedy on an ongoing judicial process. These opponents point
out that it is within SCAQMD's power to remedy the problem
identified by the court, either through completion of CEQA
documents or through judicial appeal. In addition, some
opponents question whether it is appropriate for the
Legislature to make an exception in the law that applies to
only one facility (aside from the facilities for essential
public services), when there are thousands of presumably
worthy potential projects throughout Southern California that,
like the Sentinel facility, cannot move forward for want of
emission credits.
Analysis Prepared by : Jay Dickenson / APPR. / (916) 319-2081