BILL NUMBER: SB 669 AMENDED
BILL TEXT
AMENDED IN SENATE MARCH 23, 2011
INTRODUCED BY Senator Rubio
FEBRUARY 18, 2011
An act to add Section 25228 to the Public Resources Code, and
to amend Section 8341 of the Public Utilities Code, relating
to greenhouse gas reduction .
LEGISLATIVE COUNSEL'S DIGEST
SB 669, as amended, Rubio. Greenhouse gas reduction: carbon
sequestration.
The
(1) The California Global Warming
Solutions Act of 2006 requires the State Air Resources Board to
identify opportunities for greenhouse gas emission reduction
measures, including carbon sequestration.
This bill would state the intent of the Legislature to
enact legislation establishing a regulatory framework for the
permitting and operation of require the State Energy
Resources Conservation and Development Commission to
coordinate the development of performance standards and other
operational measures for carbon capture and geologic
storage projects sites that are
consistent with the goals of protecting groundwater and preventing
the emission of carbon dioxide to the atmosphere. The bill would
require the State Air Resources Board to establish an accounting
protocol for sequestered carbon dioxide .
(2) The California Environmental Quality Act (CEQA) requires a
lead agency, as defined, to prepare, or cause to be prepared, and
certify the completion of, an environmental impact report (EIR) on a
project that it proposes to carry out or approve that may have a
significant effect on the environment or to adopt a negative
declaration if it finds that the project will not have that effect.
CEQA also requires a lead agency to prepare a mitigated negative
declaration for a project that may have a significant effect on the
environment if revisions in the project would avoid or mitigate that
effect and there is no substantial evidence that the project, as
revised, would have a significant effect on the environment. CEQA
requires a lead agency to consult with a responsible agency, which is
a public agency, other than the lead agency, that has
responsibilities in carrying out or approving a project, in
conducting the lead agency's environmental review.
This bill would designate the commission as the lead agency and
specified state agencies as responsible agencies for carbon capture
and storage projects under CEQA.
(3) Existing law prohibits a load-serving entity or local publicly
owned electric utility from entering into a long-term financial
commitment unless any baseload generation complies with a greenhouse
gas emission performance standard. Existing law provides for the
recovery in rates of long-term financial commitments entered into
through a contract approved by the Public Utilities Commission, for
electricity generated by zero- or low-carbon generating resources
that are contracted for, on behalf of consumers on a cost-of-service
basis.
This bill would additionally provide for the full recovery in
rates of long-term commitments entered into through a contract
approved by the commission for electricity generated by zero- or
low-carbon generating resources demonstrating new technology, if the
commission determines that the commitment would benefit the state's
ratepayers, economy, and the environment. The bill would cap the
recovery at 600 megawatts of electric generating capacity in the
combined electrical corporation service territories.
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 25228 is added to the
Public Resources Code , to read:
25228. (a) For the environmental review of a carbon capture and
storage project pursuant to the California Environmental Quality Act
(Division 13 (commencing with Section 21000)) all of the following
apply:
(1) The commission is the lead agency.
(2) The responsible agency is as follows:
(A) The Division of Oil, Gas and Geothermal Resources for
activities related to the subsurface.
(B) The State Fire Marshal for carbon dioxide pipelines.
(C) The State Water Resources Control Board for impacts to water
quality.
(D) The State Air Resources Board for air-related aspects of
carbon dioxide monitoring, reporting, and verification requirements.
(b) The State Air Resources Board shall establish an accounting
protocol for sequestered carbon dioxide.
(c) The commission shall coordinate the development of performance
standards for carbon capture and storage sites that would include
design requirements and other operational measures consistent with
the goals of protecting the groundwater and preventing the emission
of carbon dioxide to the atmosphere.
(d) The standards and regulations developed pursuant to
subdivision (c) shall be applicable to the injection of carbon
dioxide and other injectants in allowable geologic formations for the
purposes of greenhouse gas emission reduction or limitation through
long-term sequestration and shall not be applicable to the use of
Class II injection wells for conventional enhanced hydrocarbon
recovery.
SEC. 2. Section 8341 of the Public
Utilities Code is amended to read:
8341. (a) No A load-serving entity
or local publicly owned electric utility may
shall not enter into a long-term financial commitment unless
any baseload generation supplied under the long-term financial
commitment complies with the greenhouse gases emission performance
standard established by the commission, pursuant to subdivision (d),
for a load-serving entity, or by the Energy Commission, pursuant to
subdivision (e), for a local publicly owned electric utility.
(b) (1) The commission shall not approve a long-term financial
commitment by an electrical corporation unless any baseload
generation supplied under the long-term financial commitment complies
with the greenhouse gases emission performance standard established
by the commission pursuant to subdivision (d).
(2) The commission may, in order to enforce this section, review
any long-term financial commitment proposed to be entered into by an
electric service provider or a community choice aggregator.
(3) The commission shall adopt rules to enforce the requirements
of this section, for load-serving entities. The commission shall
adopt procedures, for all load-serving entities, to verify the
emissions of greenhouse gases from any baseload generation supplied
under a contract subject to the greenhouse gases emission performance
standard to ensure compliance with the standard.
(4) In determining whether a long-term financial commitment is for
baseload generation, the commission shall consider the design of the
powerplant and the intended use of the powerplant, as determined by
the commission based upon the electricity purchase contract, any
certification received from the Energy Commission, any other permit
or certificate necessary for the operation of the powerplant,
including a certificate of public convenience and necessity, any
procurement approval decision for the load-serving entity, and any
other matter the commission determines is relevant under the
circumstances.
(5) Costs incurred by an electrical corporation to comply with
this section, including those costs incurred for electricity purchase
agreements that are approved by the commission that comply with the
greenhouse gases emission performance standard, are to be treated as
procurement costs incurred pursuant to an approved procurement plan
and the commission shall ensure timely cost recovery of those costs
pursuant to paragraph (3) of subdivision (d) of Section 454.5.
(6) A long-term financial commitment entered into through a
contract approved by the commission, for electricity generated by a
zero- or low-carbon generating resource that is contracted for, on
behalf of consumers of this state on a cost-of-service basis, shall
be recoverable in rates, in a manner determined by the commission
consistent with Section 380. The commission may, after a hearing,
approve an increase from one-half to 1 percent in the return on
investment by the third party entering into the contract with an
electrical corporation with respect to investment in zero- or
low-carbon generation resources authorized pursuant to this
subdivision.
(7) A long-term financial commitment entered into through a
contract approved by the commission for electricity generated by
zero- or low-carbon generating resources demonstrating new technology
shall be fully recoverable in rates for the term of the commitments,
in a manner determined by the commission consistent with Section 380
and up to a cap of 600 megawatts of electric generating capacity in
the combined electrical corporation service territories, if the
commission finds that the commitment will benefit the state's
ratepayers, economy, and environment.
(c) (1) The Energy Commission shall adopt regulations for the
enforcement of this chapter with respect to a local publicly owned
electric utility.
(2) The Energy Commission may, in order to ensure compliance with
the greenhouse gases emission performance standard by local publicly
owned electric utilities, apply the procedures adopted by the
commission to verify the emissions of greenhouse gases from baseload
generation pursuant to subdivision (b).
(3) In determining whether a long-term financial commitment is for
baseload generation, the Energy Commission shall consider the design
of the powerplant and the intended use of the powerplant, as
determined by the Energy Commission based upon the electricity
purchase contract, any certification received from the Energy
Commission, any other permit for the operation of the powerplant, any
procurement approval decision for the load-serving entity, and any
other matter the Energy Commission determines is relevant under the
circumstances.
(d) (1) On or before February 1, 2007, the commission, through a
rulemaking proceeding, and in consultation with the Energy Commission
and the State Air Resources Board, shall establish a greenhouse
gases emission performance standard for all baseload generation of
load-serving entities, at a rate of emissions of greenhouse gases
that is no higher than the rate of emissions of greenhouse gases for
combined-cycle natural gas baseload generation. Enforcement of the
greenhouse gases emission performance standard shall begin
immediately upon the establishment of the standard. All
combined-cycle natural gas powerplants that are in operation, or that
have an Energy Commission final permit decision to operate as of
June 30, 2007, shall be deemed to be in compliance with the
greenhouse gases emission performance standard.
(2) In determining the rate of emissions of greenhouse gases for
baseload generation, the commission shall include the net emissions
resulting from the production of electricity by the baseload
generation.
(3) The commission shall establish an output-based methodology to
ensure that the calculation of emissions of greenhouse gases for
cogeneration recognizes the total usable energy output of the
process, and includes all greenhouse gases emitted by the facility in
the production of both electrical and thermal energy.
(4) In calculating the emissions of greenhouse gases by facilities
generating electricity from biomass, biogas, or landfill gas energy,
the commission shall consider net emissions from the process of
growing, processing, and generating the electricity from the fuel
source.
(5) Carbon dioxide that is injected in geological formations, so
as to prevent releases into the atmosphere, in compliance with
applicable laws and regulations shall not be counted as emissions of
the powerplant in determining compliance with the greenhouse gases
emissions performance standard.
(6) In adopting and implementing the greenhouse gases emission
performance standard, the commission, in consultation with the
Independent System Operator shall consider the effects of the
standard on system reliability and overall costs to electricity
customers.
(7) In developing and implementing the greenhouse gases emission
performance standard, the commission shall address long-term
purchases of electricity from unspecified sources in a manner
consistent with this chapter.
(8) In developing and implementing the greenhouse gases emission
performance standard, the commission shall consider and act in a
manner consistent with any rules adopted pursuant to Section 824a-3
of Title 16 of the United States Code.
(9) An electrical corporation that provides electric service to
75,000 or fewer retail end-use customers in California may file with
the commission a proposal for alternative compliance with this
section, which the commission may accept upon a showing by the
electrical corporation of both of the following:
(A) A majority of the electrical corporation's retail end-use
customers for electric service are located outside of California.
(B) The emissions of greenhouse gases to generate electricity for
the retail end-use customers of the electrical corporation are
subject to a review by the utility regulatory commission of at least
one other state in which the electrical corporation provides
regulated retail electric service.
(e) (1) On or before June 30, 2007, the Energy Commission, at a
duly noticed public hearing and in consultation with the commission
and the State Air Resources Board, shall establish a greenhouse gases
emission performance standard for all baseload generation of local
publicly owned electric utilities at a rate of emissions of
greenhouse gases that is no higher than the rate of emissions of
greenhouse gases for combined-cycle natural gas baseload generation.
The greenhouse gases emission performance standard established by the
Energy Commission for local publicly owned electric utilities shall
be consistent with the standard adopted by the commission for
load-serving entities. Enforcement of the greenhouse gases emission
performance standard shall begin immediately upon the establishment
of the standard. All combined-cycle natural gas powerplants that are
in operation, or that have an Energy Commission final permit decision
to operate as of June 30, 2007, shall be deemed to be in compliance
with the greenhouse gases emission performance standard.
(2) The greenhouse gases emission performance standard shall be
adopted by regulation pursuant to the Administrative Procedure Act
(Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3
of Title 2 of the Government Code).
(3) In determining the rate of emissions of greenhouse gases for
baseload generation, the Energy Commission shall include the net
emissions resulting from the production of electricity by the
baseload generation.
(4) The Energy Commission shall establish an output-based
methodology to ensure that the calculation of emissions of greenhouse
gases for cogeneration recognizes the total usable energy output of
the process, and includes all greenhouse gases emitted by the
facility in the production of both electrical and thermal energy.
(5) In calculating the emissions of greenhouse gases by facilities
generating electricity from biomass, biogas, or landfill gas energy,
the Energy Commission shall consider net emissions from the process
of growing, processing, and generating the electricity from the fuel
source.
(6) Carbon dioxide that is captured from the emissions of a
powerplant and that is permanently disposed of in geological
formations in compliance with applicable laws and regulations, shall
not be counted as emissions from the powerplant.
(7) In adopting and implementing the greenhouse gases emission
performance standard, the Energy Commission, in consultation with the
Independent System Operator, shall consider the effects of the
standard on system reliability and overall costs to electricity
customers.
(8) In developing and implementing the greenhouse gases emission
performance standard, the Energy Commission shall address long-term
purchases of electricity from unspecified sources in a manner
consistent with this chapter.
(9) In developing and implementing the greenhouse gases emission
performance standard, the Energy Commission shall consider and act in
a manner consistent with any rules adopted pursuant to Section
824a-3 of Title 16 of the United States Code.
(f) The Energy Commission, in a duly noticed public hearing and in
consultation with the commission and the State Air Resources Board,
shall reevaluate and continue, modify, or replace the greenhouse
gases emission performance standard when an enforceable greenhouse
gases emissions limit is established and in operation, that is
applicable to local publicly owned electric utilities.
(g) The commission, through a rulemaking proceeding and in
consultation with the Energy Commission and the State Air Resources
Board, shall reevaluate and continue, modify, or replace the
greenhouse gases emission performance standard when an enforceable
greenhouse gases emissions limit is established and in operation,
that is applicable to load-serving entities.
SECTION 1. It is the intent of the Legislature
to enact legislation establishing a regulatory framework for the
permitting and operation of carbon capture and geologic storage
projects.