BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 284
                                                                  Page 1

          Date of Hearing:  April 15, 2013

                       ASSEMBLY COMMITTEE ON NATURAL RESOURCES
                                Wesley Chesbro, Chair
                     AB 284 (Quirk) - As Amended:  April 8, 2013
           
          SUBJECT  :  Energy:  Road to 2050 Board

           SUMMARY  :  Requires the California Energy Commission (CEC) to  
          convene the Road to 2050 Board (2050 Board) to commission  
          studies to determine the best process for meeting the "2050  
          goal" [i.e., reducing greenhouse gas (GHG) emissions by 80  
          percent by 2050].

           EXISTING LAW  :

          1)Requires the CEC to assess energy infrastructure trends and  
            issues facing California and develop and recommend energy  
            policies for the state to address and resolve such issues as  
            part of the biennial Integrated Energy Policy Report (IEPR).

          2)Pursuant to the California Global Warming Solutions Act (AB  
            32), requires the Air Resources Board (ARB) to adopt a  
            statewide GHG emissions limit equivalent to 1990 levels by  
            2020 and to adopt rules and regulations to achieve maximum  
            technologically feasible and cost-effective GHG emission  
            reductions.

          3)Requires electric utilities and certain other retail sellers  
            of electricity to procure eligible renewable energy resources  
            to meet the following portfolio targets:

             a)   20 percent on average from January 1, 2011 to December  
               31, 2013.

             b)   25 percent by December 31, 2016.

             c)   33 percent by December 31, 2020 and each year  
               thereafter.

           THIS BILL  :

          1)Requires the CEC to convene the 2050 Board to contract with an  
            independent research group to determine the best process for  
            meeting the "2050 goal," which the bill defines as reducing  








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            GHG emissions by 80 percent from 1990 levels by 2050.

          2)Provides that the 2050 Board consists of representatives from  
            the CEC, ARB, Public Utilities Commission, California  
            Environmental Protection Agency, California Independent System  
            Operator and the Governor's Office.

          3)Requires the 2050 Board to adopt a 2050 Report by January 1,  
            2015 and every four years thereafter to provide guidance to  
            state and local infrastructure decision-making processes.  The  
            2050 Report must contain:

             a)   An overview of the overall GHG reductions as a result of  
               California's energy and environmental policies.

             b)   Consistent metric integration among the state agencies  
               to ensure the analysis of the information included in the  
               report is reliable and determines cost-effectiveness.  

             c)   Milestones to represent the progress made towards the  
               2050 goal and a determination if a change in course of  
               action is appropriate.  

             d)   Different scenarios describing the best possible roadmap  
               to achieve the 2050 goal.  The scenarios shall (1) be based  
               on policies in effect, and existing technologies and  
               infrastructures at the time of the report, (2) contain  
               separate roadmaps to determine the best process towards the  
               2050 goal, and (3) include a marginal cost curve analysis  
               to better assess the cost-effectiveness of each given  
               scenario. 

          4)Authorizes the 2050 Board to contract with an independent  
            research group to prepare the report.

          5)Requires the 2050 Board to hold a public hearing every two  
            years regarding the 2050 Report.

           FISCAL EFFECT  :  Unknown

           COMMENTS : 

           1)Author's statement  :

               Strategies to achieve AB 32 goals have varied in scope,  








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               length and complexity.  One strategy has been the creation  
               of different programs to incentivize the use of energy  
               efficiency, alternative energy and alternative fuel  
               technologies.  However, there lacks a state-wide strategic  
               or cohesive structure to encourage communication and  
               coordination on AB 32-associated programs.

               Furthermore, the implementation of California's ambitious  
               energy and environmental goals are the responsibility of a  
               group of fragmented state agencies that lack a  
               comprehensive plan to effectively move forward and  
               synchronize to ensure maximum efficiency. 

               According to a recent Legislative Analyst's Office (LAO)  
               report, Energy Efficiency and Alternative Energy Programs,  
               "the state currently lacks a comprehensive framework that  
               fully coordinates these activities to help ensure that the  
               state's goals are being met in the most cost-effective  
               manner." 

               Furthermore, a December 2012 report by the Little Hoover  
               Commission, Rewiring California: Integrating Agendas for  
               Energy Reform, states, "the state lacks the ability to  
               impose order on the multitude of proceedings that determine  
               how these policies unfold, order which is essential to  
               ensuring the state maximizes progress toward each of its  
               policy goals."

           2)Visions of 2050.   The prevailing opinion among climate  
            scientists is that achieving an 80 percent reduction in GHG  
            emissions compared to 1990 levels by 2050 is necessary to  
            stabilize the global climate.  Questions about what it may  
            take to achieve such dramatic reductions have been asked  
            before.  In the California context, the 2011 report  
            California's Energy Future - The View to 2050 was sponsored by  
            the California Council on Science and Technology and funded by  
            the CEC and the Stephen Bechtel Fund.

            The View to 2050 report assessed technology requirements for  
            reducing GHG emissions in California to 80 percent below 1990  
            levels by 2050, a target established by Executive Order S-3-05  
            in 2005.  The following information is excerpted from the  
            report:

                 By 2050, California's population is expected to grow  








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               from the 2005 level of 37 million to 55 million.  Even with  
               moderate economic growth and business-as-usual efficiency  
               gains, we will need roughly twice as much energy in 2050 as  
               we use today.

                 To achieve the 80 percent reduction goal, California's  
               GHG emissions will need to fall from 470 MtCO2e/yr (million  
               metric tons of CO2 equivalent per year) in 2005 to 85  
               MtCO2e/yr in 2050, with most of those emissions (77  
               MtCO2e/yr) coming from the energy sector.  Accomplishing  
               this will require a reduction from about 13 tons CO2e per  
               capita in 2005 to about 1.6 tons CO2e per capita in 2050.

                 The following four key actions can feasibly reduce  
               California greenhouse gas emissions to roughly 60 percent  
               below 1990 levels (150 MtCO2e/yr) by 2050:

                    o           Aggressive efficiency measures for  
                      buildings, industry and transportation to  
                      dramatically reduce per capita energy demand.

                    o           Aggressive electrification to avoid fossil  
                      fuel use where technically feasible.

                    o           Decarbonizing electricity supply while  
                      doubling electricity production, and developing  
                      zero-emissions load balancing approaches to manage  
                      load variability and minimize the impact of variable  
                      supply for renewables like wind and solar.

                    o           Decarbonizing the remaining required fuel  
                      supply where electrification is not feasible.

                 Leaving any of these off the table will significantly  
               increase the 2050 emissions.

                 We could further reduce 2050 greenhouse gas emissions to  
               80 percent below 1990 levels with significant innovation  
               and advancements in multiple technologies that eliminate  
               emissions from fuels.  All of these solutions would require  
               intensive and sustained investment in new technologies plus  
               innovation to bridge from the laboratory to reliable  
               operating systems in relatively short timeframes.

                 There are many additional technologies that reduce  








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               emissions from fuels. In combination these could achieve  
               the required additional emission cuts from 60 to 80  
               percent.  Many require multiple simultaneous strategies,  
               some are industrially complex and costly and some are  
               actually offsets, but all of them require research and  
               innovation.

                 Possible breakthrough technologies such as carbon  
               neutral fuel from sunlight or advances in nuclear power  
               could be game changers.  These would allow us to produce  
               abundant electricity or fuel with nearly zero emissions.

              1)   Meanwhile, back in 2013.   Notwithstanding the  
               big-picture significance of the analysis proposed by this  
               bill, the bill itself prompts several practical questions  
               that should be addressed.  

             It's not clear what the Board's powers and duties are.  If the  
            Board's primary function is to hire the research group, and  
            the likely source of funds is from the CEC, then it would seem  
            to be more efficient and straightforward to simply authorize  
            the CEC hire the research group.  On the other hand, if the  
            Board is intended to have broader decision-making authority,  
            then its powers and procedures should be clearly delineated.   
            Its composition should also be carefully examined.  For  
            example, the CAISO should not be a voting member on a public  
            decision-making body because it is not a public agency.  It  
            also seems unusual, and awkward, to have the Governor's Office  
            on the board because the Governor's interests would be  
            represented already by the agency members.

            If the report's purpose goes beyond information, it's not  
            clear.  To the extent the report may be interpreted to have  
            any binding effect on state and local decisions, a host of  
            issues will be raised.  First is that the report may be  
            prepared under contract by a private entity without all the  
            usual process checks that apply to public agencies.

            The intended number and frequency of reports and hearings is  
            also unclear.

              2)   Double referral  .  This bill has been doubled-referred to  
               the Assembly Utilities and Commerce Committee.

           REGISTERED SUPPORT / OPPOSITION  :   








                                                                  AB 284
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           Support 
           
          California Municipal Utilities Association
          East Bay Municipal Utility District
          Sacramento Municipal Utility District

           Opposition 
           
          None on file

           
          Analysis Prepared by  :  Lawrence Lingbloom / NAT. RES. / (916)  
          319-2092