BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 1318|
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THIRD READING
Bill No: AB 1318
Author: V. Manuel Perez (D)
Amended: 9/11/09 in Senate
Vote: 27 - Urgency
SENATE ENERGY, U.&C. COMMITTEE : 6-0, 8/24/09
AYES: Padilla, Benoit, Calderon, Cox, Strickland, Wright
NO VOTE RECORDED: Corbett, Kehoe, Lowenthal, Simitian,
Wiggins
SENATE ENV. QUALITY COMMITTEE : 5-2, 8/26/09
AYES: Simitian, Corbett, Hancock, Lowenthal, Pavley
NOES: Runner, Ashburn
ASSEMBLY FLOOR : 63-3, 7/13/09 - See last page for vote
SUBJECT : South Coast Air Quality Management District:
emission
reduction
SOURCE : Cooperative Power Venture
State Building and Trades Construction Council
of CA
DIGEST : This bill establishes special air pollution
permitting procedures for one power plan and essential
public service facilities in the South Coast Quality
Management District in order to circumvent an unfavorable
court ruling.
CONTINUED
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ANALYSIS : Under current law, known as the California
Environmental Quality Act (CEQA), an environmental impact
report shall be prepared on a project that may have a
significant effect on our environment.
Under current law, every air quality management district in
a federal non-attainment area (e.g. the greater Los Angeles
area) is required to establish a system by which major new
and modified sources of air pollutants are required to
obtain permits, meet emission standards that constitute the
lowest achievable emission rates, and obtain equivalent
emission reductions, or offsets, from other sources.
Pursuant to this requirement, the South Coast Air Quality
Management District (SCAQMD) promulgated various rules.
Under it's rules, the SCAQMD has accumulated emission
reduction credits in an internal bank which it makes
available to specified entities for specified purposes.
In Los Angeles Superior Court, certain of the district's
rules were found to violate CEQA, including the rule under
which the SCAQMD accumulated the emission reduction credits
in its internal bank.
This bill:
1.Requires the State Air Resources Board, on or before
July 1, 2010, in consultation with the Public Utilities
Commission, the State Energy Resources Conservation and
Development Commission, the State Water Resources
Control Board, and the Independent System Operator, to
prepare and submit to the Governor and the Legislature a
report that evaluates the electrical system reliability
needs of the South Coast Air Basin and recommends the
most effective and efficient means of meeting those
needs while ensuring compliance with state and federal
law, as specified.
2.Establishes special air pollution permitting procedures
for one power plant and essential public service
facilities in the South Coast Air Quality Management
District (SCAQMD).
3.Requires the SCAQMD's executive officer to transfer from
the SCAQMD's internal accounts to "eligible electrical
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generation facilities" emission reduction credits, or
"offsets," in the full amounts needed to issue permits
for eligible electrical generating facilities to meet
requirements for sulfur oxides (SOx) and particulate
matter (PM2.5 and PM10) emissions.
4.Establishes the following eligibility criteria for
electrical generation facilities, which limit the
application of the bill to the proposed CPV Sentinel
power plant in Riverside County:
A. Have a purchase agreement, executed on or before
December 31, 2008, to provide electricity to a
public utility (i.e., Southern California Edison)
for use within the Los Angeles Basin Local
Reliability Area.
B. Be under the jurisdiction of the SCAQMD, but not
within the South Coast Air Basin.
5.Requires SCAQMD to rely on the emission reduction credit
tracking system used prior to the adoption of the south
coast district's Rule 1315, until a new tracking system
is approved by the United States Environmental Protection
Agency and is in effect, at which point that new system
shall be used by the south coast district in implementing
number 2) above.
6.Requires payment for offsets according to a schedule of
mitigation fees included in SCAQMD Rule 1309.1. Requires
fees to be used for emission reduction purposes, at least
30 percent in areas within close proximity to the power
plant and at least 30 percent in areas designated by the
SCAQMD as "environmental justice areas."
7.Requires SCAQMD, within 60 days of the effective date of
this bill, for each eligible electrical generating
facility, to report to the State Energy Commission the
emission credits to be credited and transferred.
8.Requires State Energy Commission to determine whether
the emission credits to be credited and transferred to
satisfy all applicable legal requirements. Prohibits the
State Energy Resources Conservation and Development
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Commission from certifying an eligible electrical
generation facility if the ARB has determined that the
credit and transfer by the south coast district does not
satisfy the standard for reductions in clause.
9.Requires the bill to be implemented in a manner
consistent with the federal Clean Air Act.
10.Provides that the California Environmental Quality Act
(CEQA) does not apply to the SCAQMD's actions undertaken
pursuant to this bill.
11.Provides that the bill shall remain in effect until
January 1, 2012.
Background
In Superior Court, the SCAQMD was found to have illegally
revised its rules to provide air emission credits to
powerplants. Until the district legally revises its rules
through a CEQA analysis, the Court has prohibited the
district from issuing any air emissions permits. This has
halted powerplant development within the district's
jurisdiction and as well thousands of other non-powerplant
projects.
The Sentinel Powerplant project is an 850 MW natural
gas-fired powerplant owned by Competitive Power Ventures
(CPV) proposed for Riverside County near Palm Springs. The
plant, which must be approved by the California Energy
Commission, has been proposed to operate up to 3200 hours
per year, fewer hours than a baseload powerplant but more
hours than a typical peaker powerplant. Output of the
powerplant has been contracted to Southern California
Edison.
This bill is similar to, but narrower than, SB 696
(Wright). Simply put, both bills abrogate the Superior
Court's decision and provide a CEQA exemption. While SB
696 authorizes credits for three powerplants, essential
public service projects and projects which were previously
exempt from obtaining credits, these projects were
imprecisely described as "small business" projects, but
they also included powerplant repowering, emergency
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equipment, equipment replacement, equipment relocations for
businesses of any size, this bill authorizes credits for
only the Sentinel Powerplant and the essential public
service projects.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 9/10/09)
Competitive Power Ventures (co-source)
State Building Trades Construction Council of California
(co-source)
Building Industry Association/Desert Chapter
City of Cathedral City
City of Desert Hot Springs
City of Palm Springs
Desert Water Agency
Desert Wind Energy Association
Environmental Service Professionals
Express Mortgage Lenders, Inc.
Family Service of the Desert
Indio Chamber of Commerce
International Brotherhood Electrical Workers, 9th District
International Brotherhood Electrical Workers, Local 440
Palm Springs Economic Development Corporation
Southern California Edison
OPPOSITION : (Verified 9/10/09)
Breathe California
California League of Conservation Voters
CBE
Natural Resources Defense Council
Planning and Conservation League
Sierra Club California
Union of Concerned Scientists
ARGUMENTS IN SUPPORT : The author's office believes it is
important to provide air credits to essential public
services and to the Sentinel Powerplant project. The
author's office is concerned that public agencies seeking
credits have been forced to either delay construction of
their planned facilities or pay very high prices for
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credits. The author's office views the Sentinel Powerplant
as essential to advancing the State's renewable energy and
climate change goals as well as enhancing electrical grid
reliability. In support the author's office cites an April
2008 report by the California Independent System Operator
and a 2009 Staff Draft Report by the California Energy
Commission.
Supporters also note significant economic development
benefits from the project including 350 construction jobs,
$25 million in sales tax revenue, and $6.4 million in
annual property taxes.
ASSEMBLY FLOOR :
AYES: Adams, Anderson, Arambula, Beall, Bill Berryhill,
Tom Berryhill, Blakeslee, Block, Caballero, Charles
Calderon, Carter, Chesbro, Conway, Cook, Coto, Davis, De
Leon, DeVore, Duvall, Emmerson, Fuentes, Fuller,
Furutani, Gaines, Galgiani, Garrick, Gilmore, Hagman,
Hall, Harkey, Hayashi, Hernandez, Huber, Jeffries, Jones,
Knight, Krekorian, Lieu, Logue, Ma, Mendoza, Miller,
Nestande, Niello, Nielsen, John A. Perez, V. Manuel
Perez, Portantino, Ruskin, Salas, Saldana, Silva,
Skinner, Smyth, Solorio, Audra Strickland, Swanson,
Torlakson, Torres, Torrico, Tran, Yamada, Bass
NOES: Feuer, Hill, Huffman
NO VOTE RECORDED: Ammiano, Blumenfield, Brownley,
Buchanan, De La Torre, Eng, Evans, Fletcher, Fong, Bonnie
Lowenthal, Monning, Nava, Villines, Vacancy
DLW:JJA:do 9/11/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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