BILL ANALYSIS
SB 388
Page 1
SENATE THIRD READING
SB 388 (Ron Calderon)
As Amended September 12, 2009
Majority vote
SENATE VOTE :Vote not relevant
UTILITIES & COMMERCE
(vote not available)
SUMMARY : Requires the Executive Officer of the South Coast Air
Quality Management District (SCAQMD) to transfer emission
reduction credits from its internal emission credit accounts to
eligible electrical generating facilities, and establishes
eligibility criteria so that the powerplant must have a purchase
agreement and be under the jurisdiction of SCAQMD and within the
City of Industry. Specifically, this bill :
1)Requires SCAQMD Executive Officer to transfer air credits from
SCAQMD's internal offset accounts to eligible electrical
generating facilities in the full amounts needed to issue
permits for eligible electrical generating facilities.
2)Permits SCAQMD to rely on the offset tracking system used
prior to the adoption of Rule 1315 until a new tracking system
is approved by the United States Environmental Protection
Agency, and make use of any emission credits that have
resulted from emission reductions and shutdowns from minor
sources since 1990.
3)Requires, within 60 days, SCAQMD to report to the California
Energy Commission (CEC) the emission credits to be credited
and transferred for each eligible electrical generating
facility; requires CEC to determine whether the credits to be
transferred satisfy the standard for reductions of emissions;
and, precludes CEC from certifying an eligible electrical
generation facility if CEC has determined that the credit and
transfer does not satisfy the standard for reductions of
emission.
4)Establishes the following eligibility criteria for eligible
electrical generation facilities:
a) Be subject to the permitting jurisdiction of CEC;
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b) Have a purchase agreement, executed on or before
December 31, 2008, to provide electricity to a public
utility for use within the Los Angeles Basin Local
Reliability Area;
c) Be under the jurisdiction of SCAQMD; and,
d) Be located within the City of Industry.
5)Precludes the Executive Officer from transferring emission
reduction credits until it receives mitigation fees, and
requires the mitigation fees to only be used for emission
reduction purposes, and ensure that at least 30% of the fees
are used for emission reductions in areas within close
proximity to the electrical generating facility and at least
30% are used for emission reductions in areas designated as
"Environmental Justice Areas."
6)Sunsets on January 1, 2013.
EXISTING LAW requires every air pollution control district to
establish a system to bank all reductions in the emission of air
contaminants that are to be used to offset certain future
increases in the air contaminant emissions, to provide a
mechanism to recognize reductions that can be used as offsets,
and to provide greater certainty that the offsets shall be
available for emitting industries.
FISCAL EFFECT : Unknown
COMMENTS : This bill would require the Executive Officer of
SCAQMD to issue priority air credits for powerplants. The
California Independent System Operator and the Public Utilities
Commission have identified the Los Angeles region as one in need
of additional electricity generation sources.
This bill is a result of a lawsuit that was intended to stymie
plans for a powerplant in Vernon, and unintentionally had the
effect of halting thousands of other businesses by freezing
SCAQMD's Priority Reserve Account.
This bill is similar to AB 1318 (V. Manuel Perez) which is being
held in Senate Rules Committee. For a more thorough background,
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review the Assembly Utilities and Commerce Committee analyses on
AB 1318 (V. Manuel Perez) for the hearing dated May 18, 2009,
and SB 827 (Wright) and SB 450 (Lowenthal) for the hearing dated
September 11, 2009. AB 1318 requires SCAQMD to transfer credits
to a powerplant located within the SCAQMD's jurisdiction, but
not within the air basin. Only one powerplant meets that
criteria. SB 388 requires the Executive Officer of the SQAQMD
to transfer the credits to a powerplant within SCAQMD's
jurisdiction, and located within the City of Industry. Only one
powerplant, the Walnut Creek plant (500 MW), would be eligible.
This bill complements SB 827 (Wright) and SB 450 (Lowenthal).
Both bills require the Executive Officer to transfer priority
air credits to exempt sources and essential public services. SB
827 and SB 450 do not explicitly allow the Executive Officer to
issue credits for powerplants.
Analysis Prepared by : Gina Adams / U. & C. / (916) 319-2083
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