BILL ANALYSIS                                                                                                                    Ó          1





                SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
                                 ALEX PADILLA, CHAIR
          

          AB 1073 -  Fuentes                                Hearing Date:  
          March 12, 2012        A
          As Amended:              February 23, 2012        FISCAL/Urgency 
                B

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                                      DESCRIPTION
           
           Current law  vests the California Energy Commission (CEC) with 
          exclusive certification jurisdiction over thermal powerplants 
          with a generating capacity of 50 megawatts (MW) or more, and any 
          appurtenant facilities.

           Current law  excludes from the definition of a thermal powerplant 
          any wind, hydroelectric, or solar photovoltaic (PV) electrical 
          generating facility. 

           Current law  allows a thermal powerplant with a generating 
          capacity of less than 50 MW to voluntarily submit to the CEC's 
          exclusive certification jurisdiction.

           Current law  authorizes the CEC to retain jurisdiction over 
          specified solar thermal powerplants where the owner seeks an 
          amendment to the certification to convert the electric 
          generating facility to PV thus avoiding the necessity of filing 
          a new application with a local jurisdiction.

           This bill  clarifies that the CEC's jurisdiction over specified 
          solar thermal powerplants which seek conversion to PV also 
          applies to a PV powerplant that was challenged in court but for 
          which the challenge was later dismissed.


                                      BACKGROUND
           












          CEC Siting Process - The CEC performs the siting review function 
          for all large thermal powerplants, including concentrated solar 
          thermal, natural gas combined cycle, and geothermal powerplants. 
           It is a one-stop shop wherein all state, local, and regional 
          environmental reviews are completed.  The process begins with an 
          Application for Certification (AFC) by the powerplant developer. 
           Once complete the CEC staff reviews the project and issues a 
          Preliminary Staff Assessment (PSA), which contains their 
          analysis of the engineering, environmental, public health and 
          safety aspects of the project.  The PSA determines if the 
          project conforms to all applicable laws, ordinances, regulations 
          and standards.  Upon identifying any potentially significant 
          environmental impacts, the PSA recommends mitigation measures in 
          the form of conditions of certification for construction, 
          operation, and closure of the project.  The PSA is issued for 
          public comment and is revised, if warranted, and reissued as a 
          Final Staff Assessment (FSA).  This document is subject to 
          formal public hearings before CEC Commissioners.  The five 
          member CEC may accept or revise the FSA, which is voted on in a 
          public meeting.

          Changing Market Conditions - Solar thermal generation uses 
          mirrors or lenses to concentrate a large area of sunlight, or 
          solar thermal energy, onto a small area. Electrical power is 
          produced when the concentrated light is converted to heat, which 
          drives a heat engine (usually a steam turbine) connected to an 
          electrical power generator.  Since 2007 the CEC has received 
          project applications from developers of 16 solar thermal plants 
          collectively totaling over 5,700 MW of generation primarily 
          located in the Mojave and Colorado desert regions of Southern 
          California.  However as the siting process neared completion for 
          some of these projects, and in some instances after an 
          application had been certified by the CEC, market prices for 
          solar PV dropped so precipitously that some solar thermal 
          project developers desired to change technologies seeking a 
          lower cost of power generated from the plant.  Had the 
          developers began the siting process with PV they would have been 
          required to gain siting approvals from the city or county in 
          which the project was located.  But because the CEC had already 
          done much, if not all of the work required for siting the solar 
          thermal projects, a question was raised as to whether the 
          project applicant should be required to begin the siting process 
          all over again at the local level or whether the CEC had the 
          authority to accept an amended application from the developer to 










          convert the plant to PV.

          In response the Legislature adopted SB 226 (Simitian) in 2011 
          which provided the CEC with limited jurisdiction over PV 
          projects which were filed after August 15, 2007 and approved by 
          the CEC and for projects on federal land where a decision had 
          been issued by the Bureau of Land Management before September 1, 
          2011.  The one caveat was that a project would not qualify for 
          the exception if the project had been challenged in court.  The 
          author of the bill submitted a letter to the Senate Daily 
          Journal expressing his intent that this limitation did not apply 
          to a project which was challenged in court but subsequently 
          dismissed.

          K Road Calico Solar - This project originated with the CEC in 
          2008 as a solar thermal project and was approved as such in 
          December 2010.  The 663.5-megawatt project was to be constructed 
          on a 4,613-acre site located in San Bernardino County 
          approximately 37 miles east of Barstow.

          In December 2010 the project was challenged in the California 
          Supreme Court alleging that the CEC's environmental review was 
          deficient.  The challenge was dismissed in April 2011.

          In March of 2011 the project developers filed an amendment to 
          their project with the CEC to convert the electrical generation 
          to PV from solar thermal.  The amendment did not propose to 
          change the size, boundary, or generating capacity of the 
          previously approved project but additional environmental review 
          by the CEC would be necessary.


                                       COMMENTS
           
              1.   Author's Statement  .  AB 1073 is a "clean up" measure 
               that clarifies one minor issue contained in SB 226 
               (Simitian) from last year.  The bill authorized a small 
               group of solar projects that were certified by the CEC to 
               petition the CEC for an amendment to the certificate if 
               they switch their technology from solar thermal to solar 
               PV.  Any project that was challenged in court was barred 
               from seeking such an amendment. 

               In a letter to the Senate Journal, Senator Simitian 










               clarified his intent relative to SB 226 language - stating 
               that it was not his intent to bar projects "?whose 
               certificate was challenged and subsequently dismissed by 
               the California Supreme Court."  AB 1073 simply clarifies 
               that point in statute - using the same language from the 
               letter itself - to ensure there is no ambiguity. Further, 
               AB 1073 clarifies that nothing in the new law abrogates a 
               party's right to challenge projects going forward - a point 
               also contained in the letter to the Senate Journal.

              2.   Conversion  .  On its face it seems logical and efficient 
               to allow one siting agency, which had already invested a 
               great deal of time and expertise in the siting of a 
               project, to continue the work even if a project applicant 
               later modifies the electrical generation technology.  That 
               was the purpose behind SB 226.  On its face, this bill is 
               technical and clarifying.  Its provisions, in effect, will 
               only apply to one project - K Road Calico Solar.

               There is however opposition to this measure from several 
               environmental advocacy groups which reportedly supported or 
               remained neutral on SB 226 last fall.  Their concern isn't 
               necessarily related to the authority of the CEC but the way 
               that authority has been used for the Calico project.  They 
               remain concerned that the CEC's environmental review of K 
               Road Calico's original application was deficient and that 
               local agency review would be more effective.  They also 
               opine that this project location was a bad choice from the 
               start and its siting cannot strike the balance between the 
               necessity for clean energy while maintaining a healthy 
               environment.  

              3.   CEC Taking License  ?  A proposed decision (PD) of the CEC 
               on a siting application referred to as Ridgecrest has drawn 
               fire.  It is germane to this bill because the PD asserted 
               that the CEC has the authority to allow any project 
               developer of any non-thermal electric generation facilities 
               in the state to voluntarily utilize the CEC's siting 
               process.

               At issue in Ridgecrest is the conversion of a solar thermal 
               plant to PV and the CEC's siting jurisdiction.  The law 
               prior to SB 226 and still in effect does provide for an 
               exception for a project developer to "voluntarily" file an 










               application with the CEC for any facility excluded from the 
               CEC's specific statutory authority which the PD argues 
               includes PV.

               If the law provided for that option, then this bill and its 
               predecessor SB 226 would not be necessary.  

               Current law defines a "facility" as a thermal powerplant 
               and a "thermal powerplant" is defined as a plant of 50 MW 
               or more.  The committee sees the CEC's jurisdictional 
               exception as one for plants under 50 MW in size, not for 
               any non-thermal plant.  Legislative history approving SB 
               226 is consistent with this interpretation.

               Moreover, the CEC's siting division is not funded to 
               accommodate the additional responsibility of siting 
               non-thermal powerplants.  Although thermal developers do 
               pay licensing fees, those fees are not sufficient to cover 
               the full agency costs of siting the projects.  
               Consequently, siting is subsidized by electric ratepayers 
               through the surcharges that all gas and electric customers 
               pay to the agency through fees on their utility bills and 
               the CEC would face adverse budget impacts if it routinely 
               accepted applications for non-thermal plants.


                                    ASSEMBLY VOTES
           
          Not relevant


                                       POSITIONS
           
           Sponsor:
           
          Author

           Support:
           
          K Road Calico Solar

           Oppose:
           
          Audobon California










          Center for Biological Diversity
          Defenders of Wildlife
          Natural Resources Defense Council
          The Nature Conservancy
          Sierra Club California
          The Wilderness Society


          Kellie Smith 
          AB 1073 Analysis
          Hearing Date:  March 12, 2012