BILL ANALYSIS Ó ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 771| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ UNFINISHED BUSINESS Bill No: SB 771 Author: Kehoe (D) Amended: 9/2/11 Vote: 21 SENATE ENERGY, UTILITIES & COMM. CMTE : 10-0, 05/03/11 AYES: Padilla, Fuller, Corbett, De León, DeSaulnier, Pavley, Rubio, Simitian, Strickland, Wright NO VOTE RECORDED: Berryhill SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8 SENATE FLOOR : 38-0, 05/19/11 AYES: Alquist, Anderson, Berryhill, Blakeslee, Cannella, Corbett, Correa, De León, DeSaulnier, Dutton, Emmerson, Evans, Fuller, Gaines, Hancock, Harman, Huff, Kehoe, La Malfa, Leno, Lieu, Liu, Lowenthal, Negrete McLeod, Padilla, Pavley, Price, Rubio, Runner, Simitian, Steinberg, Strickland, Vargas, Walters, Wolk, Wright, Wyland, Yee NO VOTE RECORDED: Calderon, Hernandez ASSEMBLY FLOOR : 77-0, 9/7/11 - See last page for vote SUBJECT : California Alternative Energy and Advanced Transportation Financing Authority SOURCE : Clean Power Campaign CONTINUED SB 771 Page 2 DIGEST : This bill specifies that landfill and digester gas turbines, engines, and microturbines may be considered renewable energy eligible for financial assistance under the California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA) Act. Assembly Amendments (1) expand the definition of "renewable energy" to include energy generation based on thermal energy systems such as natural gas turbines; landfill gas turbines, engines, and microturbines; digester gas turbines, engines, and microturbines, and fuel cells, (2) clarify that landfill and digester gas turbines, engines and microturbines are eligible for funding, and (3) make other clarifying and technical changes. ANALYSIS : Existing law: 1.Creates CAEATFA for the purpose of promoting the development and utilization of alternative energy sources and the development and commercialization of advanced transportation technologies. CAEATFA consists of five members: the Director of Finance, the chairperson on the California Energy Commission, the president of the Public Utilities Commission, the State Controller, and the State Treasurer, who serves as the chairperson of CAEATFA. 2.Permits CAEATFA to provide bond financing to lend assistance to a participating party to enter into loan agreements to finance projects that use an alternative energy source or advanced transportation technologies. 3.Permits CAEATFA to approve a sales and use tax exemption on tangible personal property utilized for the design, manufacture, production, or assembly of advanced transportation technologies or alternative energy source products, components or system. This sales and use tax exemption will sunset on January 1, 2021. 4.Requires CAEATFA to establish a renewable energy program to provide financial assistance to public power entities, independent generators, utilities, or businesses manufacturing components or systems, or both, to generate CONTINUED SB 771 Page 3 new and renewable energy sources, develop clean and efficient distributed generation, and demonstrate the economic feasibility of new technologies, such as solar, photovoltaic, wind, and ultralow-emission equipment. 5.Defines "renewable energy" as either of the following: A. A device or technology that conserves or produces heat, processes heat, space heating, water heating, steam, space cooling, refrigeration, mechanical energy, electricity, or energy in any form convertible to these uses, that does not expend or use conventional energy fuels (e.g., oil, gasoline, natural gas), and that uses biomass, solar thermal, photovoltaic, wind, or geothermal electrical generation technologies; or, B. Ultralow-emission equipment for energy generation based on thermal energy systems such as natural gas turbines and fuel cells. This bill specifies that landfill and digester gas turbines, engines, and microturbines may be considered renewable energy eligible for financial assistance under the CAEATFA Act. Comments California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA). CAEATFA was created in 1980 with an authorization of $200 million in revenue bonds to finance projects utilizing alternative sources of energy, such as cogeneration, wind and geothermal power. It was renamed in 1994 as currently titled and its charge expanded to include the financing of "advanced transportation" technologies. During the energy crisis of 2001, its authority was again expanded, this time to provide financial assistance to public power entities, independent generators, and others for new and renewable energy sources, and to develop clean distributed generation. CAEATFA's authority is broad but in practice it has not CONTINUED SB 771 Page 4 been utilized until recently. The State Treasurer has tried to reinvigorate the authority and has launched a sales and use tax exemption program to stimulate green manufacturing as authorized by SB 71 (Padilla), Chapter 10, Statutes of 2010. According to the author's office, a problem exists with renewable programs and opines that as new technologies evolve the renewable programs are not keeping pace leaving some technologies that serve renewable goals ineligible for specified programs particularly those that the author categorizes as "clean continuous renewable energy technologies." FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No SUPPORT : (Verified 9/1/11) Clean Power Campaign (source) State Treasurer Bill Lockyer City of San Diego Flex Energy, Inc. Marin Sanitary Service ARGUMENTS IN SUPPORT : The Clean Power Campaign states that this bill a new a new category of "continuous clean renewable energy" to recognize the benefits of technologies that provide baseload electricity and maintain an emissions profile equivalent or better than Air Resources Board 2013 standard. By creating this new category and allowing for its inclusion in selected clean technology programs managed by the state, this bill will serve to achieve the state's effort to improve air quality, accelerate the utilization of clean technologies and promote economic growth by way of investment in the clean technology sector. ASSEMBLY FLOOR : 77-0, 9/7/11 AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall, Bill Berryhill, Block, Blumenfield, Bonilla, Bradford, Brownley, Buchanan, Butler, Charles Calderon, Campos, Carter, Cedillo, Chesbro, Conway, Cook, Davis, Dickinson, Eng, Feuer, Fletcher, Fong, Fuentes, Beth Gaines, CONTINUED SB 771 Page 5 Galgiani, Garrick, Gatto, Gordon, Grove, Hagman, Halderman, Hall, Harkey, Hayashi, Roger Hernández, Hill, Huber, Hueso, Huffman, Jeffries, Jones, Knight, Lara, Logue, Bonnie Lowenthal, Ma, Mansoor, Mendoza, Miller, Mitchell, Monning, Morrell, Nestande, Nielsen, Norby, Olsen, Pan, Perea, V. Manuel Pérez, Portantino, Silva, Skinner, Smyth, Solorio, Swanson, Torres, Valadao, Wagner, Wieckowski, Williams, Yamada, John A. Pérez NO VOTE RECORDED: Donnelly, Furutani, Gorell RM:nl 9/8/11 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED