BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 284
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          Date of Hearing:   April 29, 2013

                    ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
                               Steven Bradford, Chair
                     AB 284 (Quirk) - As Amended:  April 24, 2013
           
          SUBJECT  :   Energy:  Road to 2050 Board

           SUMMARY  :   Requires the California Energy Commission (CEC) to  
          convene a board to report on milestones and scenarios to achieve  
          the state's 2050 greenhouse gas (GHG) emission reduction  
          requirement.  Specifically,  this bill  :  

          a)Requires the CEC to convene a board comprised of high level  
            representatives from:
             1)   CEC
             2)   California Public Utilities Commission (PUC)
             3)   State Air Resources Board (ARB)
             4)   California Environmental Protection Agency (CalEPA)
             5)   California Independent System Operator (CAISO)
             6)   Two members appointed by the Speaker of the Assembly.
             7)   Two members appointed by the Senate Committee on Rules.

          a)Requires the Board, by January 1, 2015 and every four years  
            after, to prepare and adopt a "Road to 2050" Report to be used  
            on an advisory basis to guide decision making processes and  
            policies at the local and state level to ensure those  
            processes consider implications for meeting the 2050 goals.
             1)   Requires the report to contain the following:
             2)   An overview of the overall reduction in GHG emissions as  
               a result of energy and environmental policies to date.
             3)   Consistent metric integration among state agencies to  
               ensure the analysis of information in the report is  
               reliable and determines cost-effectiveness.
             4)   Milestones to represent the progress made towards the  
               2050 goal and a determination if a change in course of  
               action is appropriate. 
             5)   Alternative scenarios describing the best possible  
               roadmap to achieve the 2050 goal in the most cost-effective  
               manner. The scenarios are to be based on policies currently  
               in effect and existing technologies and infrastructures at  
               the time of the report; contain separate roadmaps to  
               determine the best processes toward the 2050 goal; include  
               a marginal cost curve analysis to better assess the  
               cost-effectiveness of each given scenario.








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

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

           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).
            (Public Resources Code 25300)

          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.
            (Health and Safety Code 38500)

          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.

            (Public Utilities Code 399.11)

           FISCAL EFFECT  :   Unknown

           COMMENTS  :   

           1)Author's statement  : "Strategies to achieve AB 32 goals have  
            varied in scope, 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  








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            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)Executive Order S-3-05  . In 2005, Governor Schwarzenegger  
            issued an Executive Order addressing climate change causes and  
            impacts. In this Executive Order the Governor ordered the  
            following:

            "1. That the following greenhouse gas emission reduction  
            targets are hereby established for California: by 2010, reduce  
            GHG emissions to 2000 levels; by 2020, reduce GHG emissions to  
            1990 levels; by 2050, reduce GHG emissions to 80 percent below  
            1990 levels; and 
            2. That the Secretary of the California Environmental  
            Protection Agency ("Secretary") shall coordinate oversight of  
            the efforts made to meet the targets with: the Secretary of  
            the Business, Transportation and Housing Agency, Secretary of  
            the Department of Food and Agriculture, Secretary of the  
            Resources Agency, Chairperson of the Air Resources Board,  
            Chairperson of the Energy Commission, and the President of the  
            Public Utilities Commission; and 
            3. That the Secretary shall report to the Governor and the  
            State Legislature by January 2006 and biannually thereafter on  
            progress made toward meeting the greenhouse gas emission  
            targets established herein; and 
            4. That the Secretary shall also report to the Governor and  








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            the State Legislature by January 2006 and biannually  
            thereafter on the impacts to California of global warming,  
            including impacts to water supply, public health, agriculture,  
            the coastline, and forestry, and shall prepare and report on  
            mitigation and adaptation plans to combat these impacts; and 
            5. That as soon as hereafter possible, this Order shall be  
            filed with the Office of the Secretary of State and that  
            widespread publicity and notice be given to this Order."

            In August 2012 Governor Brown announced the launch of a new  
            website, "Climate Change: Just the Facts," to provide facts  
            and data on global warming on the science and data of climate  
            change.

           3)Cleveland National Forest Foundation et al. v. San Diego  
            Association of Governments et al.  In November 2011, the  
            Cleveland National Forest Foundation and Center for Biological  
            Diversity filed a lawsuit against the San Diego Association of  
            Governments (SANDAG), primarily challenging SANDAG's approval  
            of its 2050 Regional Transportation Plan/Sustainable  
            Communities Strategy (RTP/SCS) and certification of its Final  
            Environmental Impact Report (FEIR) for the 2050 RTP/SCS,  
            alleging violations of the California Environmental Quality  
            Act (CEQA). A separate case against SANDAG was filed at the  
            same time by Citizens for Responsible Equitable Environmental  
            Development (CREED-21) and the Affordable Housing Coalition of  
            San Diego County, also challenging SANDAG's 2050 RTP/SCS and  
            FEIR. These two (2) cases were consolidated by the court.  
            Additionally, the court granted requests to add The Sierra  
            Club and the California Attorney General's request to join as  
            interveners.

            In its ruling on December 3, 2012, the Superior Court of the  
            County of San Diego stated:

            "First, although SANDAG acknowledges SB 375 mandates a  
            "sharper focus on reducing GHG emissions" the EIR is  
            impermissibly dismissive of Executive Order S-03-05. SANDAG  
            argues that the Executive Order does not constitute a 'plan'  
            for GHG reduction, and no state plan has been adopted to  
            achieve the 2050 goal. The EIR therefore does not find the  
            RTP/SCS's failure to meet the Executive Order's goals to be a  
            significant impact.  This position fails to recognize that  
            Executive Order S-3-05 is an official policy of the State of  
            California, established by a gubernatorial order in 2005, and  








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            not withdrawn or modified by a subsequent (and predecessor)  
            governor.  Quite obviously it was designed to address an  
            environmental objective that is highly relevant under CEQA  
            (climate stabilization)." [emphasis added]

            The court found in favor of the petitioners and stated that  
            "the real focal point of this controversy is whether the EIR  
            is in conformance with a series of state policies enunciated  
            by the legislative and executive branches since 2005 relating  
            to greenhouse gases. Governor Schwarzenegger issued, in 2005,  
            Executive Order S-03-05, which for the first time set a state  
            goal of reducing greenhouse gas emissions. This Executive  
            Order gave rise to the Global Warming Solutions Act of 2006  
            (AB 32), which is codified at H&S Code section 38500 et seq."

            While this court's ruling is not binding on any other court it  
            does set a precedent that could affect the decisions made by  
            other courts.

           4)Follow on to Visions of 2050?   In 2011 a 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 pursuant to Executive  
            Order S-3-05.  This report identified four key actions can  
            feasibly reduce California greenhouse gas emissions to roughly  
            60 percent below 1990 levels (150 MtCO2e/yr) by 2050:

             a)   Aggressive efficiency measures for buildings, industry  
               and transportation to dramatically reduce per capita energy  
               demand.
             b)   Aggressive electrification to avoid fossil fuel use  
               where technically feasible.
             c)   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.
             d)   Decarbonizing the remaining required fuel supply where  
               electrification is not feasible.

            The report went on to state that:








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            "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 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)   Similar Boards?  Similar to the Governor Schwarzenegger's  
               Order, this bill establishes a high-level board, but with a  
               slightly different composition. 

             The author may wish to amend the bill to designate the Chair  
            of the California Air Resources Board as the lead agency and  
            include the Agencies and Departments identified in the order. 

             In so doing, the provisions in this bill would move from its  
            current location in the Public Resources Code to another  
            section of the Public Resources Code.

              2)   Similar but Different?  Similar to the Governor  
               Schwarzenegger's Order, this bill establishes that the  
               Secretary of CalEPA "shall report to the Governor and the  
               State Legislature by January 2006 and biannually thereafter  
               on progress made toward meeting the greenhouse gas emission  
               targets established herein;"

            This bill would require a new separate report, on a four year  
            reporting schedule. In addition, this new report would be used  
            to guide key infrastructure decision making processes and  
            policies at the local and statewide level.









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            It is also unclear what is meant by "guide key infrastructure  
            decisions." As written, this reporting requirement does not  
            specify which key infrastructure decisions would be guided by  
            this report. As written this could apply to any of a variety  
            of actions from electricity transmission and distribution  
            systems, natural gas infrastructure, energy generation  
            facilities, water infrastructure, land use planning, and  
            possibly other types of infrastructure.

            As written, this is an advisory document only and does not  
            bind the decision making of any state or local governing body.

            In a recent report by the Legislative Analyst's Office (LAO)  
            on energy efficiency, the LAO found it difficult to evaluate  
            effectiveness across all programs and suggested that in order  
            to ensure the state is expending resources where it can get  
            the biggest bang for its buck the state should use a  
            consistent set of evaluation metrics and methods and use a  
            comparison of programs' marginal costs to help provide a  
            better understanding of the relative costs and benefits of  
            various programs.

               "While some of the energy efficiency and alternative energy  
               programs we reviewed have an evaluation component, the  
               state has not methodically assessed all of these programs.  
               As such, the state does not currently evaluate the relative  
               cost-effectiveness of all programs. Such an evaluation  
               would include a comparison of programs' marginal costs of  
               achieving the state's energy goals and, thus, would help  
               provide program feedback for policymakers. In addition,  
               given that there are multiple departments involved in  
               administering the various programs, departments have  
               developed their own set of evaluation metrics and methods  
               specific to their programs-making it difficult to compare  
               the relative effectiveness of one program to another. 

               "Thus, it is currently difficult for the Legislature to  
               ensure that the state is expending resources where it can  
               get the biggest bang for its buck. The existence of common  
               evaluation methods would help the Legislature better  
               understand the investments it is making in energy  
               efficiency and alternative energy and what the impact would  
               be if it decided to reduce or increase its investments in  
               particular programs. This is particularly important given  
               that the Legislature will need to decide how to invest the  








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               additional funding that will be available from the  
               cap-and-trade auctions and Proposition 39."

            This bill seeks to establish a common set of metrics and to  
            provide a marginal cost assessment of the "Road to 2050" to  
            help inform policy makers and program implementers. However,  
            using a marginal cost assessment would relieve the need to  
            develop alternate scenarios as all programs would be assessed  
            in the same manner.

             The author may wish to revise the language in the bill and  
            instead codify the reporting requirement in S-3-05, while  
            maintaining that the report is for advisory purposes only, and  
            include the provisions proposed for the Road to 2050 report in  
            the currently required report, with the exception of the  
            scenario provisions.
             
              3)   Need for an independent contractor?  By moving these  
               provisions to the ARB the bill will no longer require an  
               independent contractor provision as ARB has mechanisms to  
               contract for these services. The specific investigations  
               regarding best processes and methods can be incorporated  
               into the reporting requirements.  
             

             25229.   71090 (a) To ensure that the interests of the people  
            of California are served, the  commission   Chair of the  
            California Air Resource Board  shall convene the Road to 2050  
            Board consisting of all of the following:

             (1) A high-level representative from the commission.
            (2) A high-level representative from the Public Utilities  
            Commission.
            (3) A high-level representative from the State Air Resources  
            Board.
            (4) A high-level representative from the California  
            Environmental Protection Agency.
            (5) A high-level representative from the Independent System  
            Operator.
            (6) Two members appointed by the Speaker of the Assembly.
            (7) Two members appointed by the Senate Committee on Rules.
                
              (1)  the Secretary of the Business, Transportation and  
               Housing Agency, 
             (2)  Secretary of the Department of Food and Agriculture, 








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             (3)  Secretary of the Resources Agency, 
             (4)  Chair of the Energy Commission,
             (5)  President of the Public Utilities Commission.
              
             (b)  For the purposes of this section, "2050 goal" means the  
            goal of reducing emissions of greenhouse gases by 80 percent  
            from 1990 emission levels by 2050.  
             
              25229 (b) The board shall do both of the following:
            (1) (A) On or before January 1, 2015, and on or before January  
            1 every four years thereafter, the board shall prepare and  
            adopt, the Road to 2050 Report containing findings that are  
            used, on an advisory basis, to guide key infrastructure  
            decisionmaking processes and policies at the local and  
            statewide level to ensure those processes adequately consider  
            implications for meeting the 2050 goals.
            (B) The report shall contain all of the following:
            (i) An overview of the overall reduction in emissions of  
            greenhouse gases as a result of California's energy and  
            environmental policies to date.
            (ii) Consistent metric integration among the state agencies to  
            ensure the analysis of the information included in the report  
            is reliable and determines cost-effectiveness.
            (iii) Milestones to represent the progress needed to achieve  
            the 2050 goal, an evaluation of what is reasonably possible,  
            and if a change in course of action is appropriate.
            (iv) Alternative scenarios describing the best possible  
            roadmap to achieve the 2050 goal in the most cost-effective  
            manner.
            (I) The scenarios shall be based on policies currently in  
            effect and existing technologies and infrastructures at the  
            time of the report.
            (II) The scenarios shall contain separate roadmaps to  
            determine the best processes toward the 2050 goal.
            (III) The scenarios shall include a marginal cost curve  
            analysis to better assess the cost-effectiveness of each given  
            scenario.
            (C) The board shall hold a public meeting, on a biennial  
            basis, for the preparation of the report.
            (D) The board shall submit to the Legislature, notwithstanding  
            Section 10231.5 of the Government Code, and pursuant to  
            Section 9795 of the Government Code, the report and identify  
            statutory changes, policy gaps, limitations in statutes, or  
            conflicting policies among state agencies that are needed to  
            optimize the objectives of the state's energy and  








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            environmental policies.
            (E) The board may contract with an independent research group  
            to prepare the report.
            (2) Contract with an independent research group to focus on a  
            study to determine the best process for meeting the 2050 goal  
            to include all of the following:
            (A) The best process for reducing carbon emissions from  
            electrical generation that ensure cost-effectiveness and  
            reliability.
            (B) Methods to reduce emissions of greenhouse gases from  
            homes, farms, and industrial and commercial structures.
            (C) Emission reductions from sources of transportation.
            
             70091 (a) The Chair shall report to the Governor and the State  
            Legislature, notwithstanding Section 10231.5 of the Government  
            Code, and pursuant to Section 9795 of the Government Code, by  
            January 2016 and biennially thereafter on the impacts to  
            California of global warming, including impacts to water  
            supply, public health, agriculture, the coastline, and  
            forestry, and shall prepare and report on mitigation and  
            adaptation plans to combat these impacts.
             (b)  The report shall contain all of the following:
             (1)  An overview of the overall reduction in emissions of  
               greenhouse gases as a result of California's environmental  
               and energy policies to date.
             (2)  Milestones to represent the progress needed to achieve  
               the 2050 goal, an evaluation of what is reasonably  
                                                                                      possible, and if a change in course of action is  
               appropriate.
             (3)  Descriptions of all programs and policies using  
               currently available technologies to achieve the 2050 goal.
             (4)  The best process for reducing carbon emissions from  
               electrical generation that ensure cost-effectiveness and  
               reliability.
             (5)  Methods to reduce emissions of greenhouse gases from  
               homes, farms, and industrial and commercial structures.
             (6)  Emission reductions from sources of transportation.
             (a)  The report shall be used establish consistent metrics to  
               be used for quantifying greenhouse gas emissions and  
               greenhouse gas emission reductions and assessing the costs  
               and benefits of each emission reduction program.
             (1)  The report shall be based on policies currently in  
               effect based on existing infrastructures and technologies.
             (2)  The report shall include a marginal cost curve analysis  
               on each program to provide an assessment of the cost  








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               effectiveness of the program.  
              (3)  An identification of any statutory changes, policy gaps,  
               limitations in statutes, or conflicting policies among  
               state agencies that are needed to or prevent the ability to  
               optimize the objectives of the state's energy and  
               environmental policies
             (a)  The report shall be used on an advisory basis to guide  
               key infrastructure decisionmaking processes and policies at  
               the local and statewide level.
             (b)  The Chair shall convene at least one public meeting to  
               take public comments on the report.
           
           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          California Municipal Utilities Association (CMUA)
          East Bay Municipal Utility District (EBMUD)
          Sacramento Municipal Utility District (SMUD)
          California Energy Efficiency Industry Council 
          Coalition of California Utility Employees (CCUE) (if amended)
          California State Association of Electrical Workers (if amended)

           Opposition 
           
          None on file
           
          Analysis Prepared by  :    Susan Kateley / U. & C. / (916)  
          319-2083