BILL ANALYSIS �
AB 628
Page 1
Date of Hearing: April 22, 2013
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Steven Bradford, Chair
AB 628 (Gorell) - As Proposed to be Amended: April 1, 2013
SUBJECT : Energy management plan for harbor and port districts.
SUMMARY : Authorizes a harbor or port district in collaboration
with an investor owned utility (IOU) or publicly owned electric
utility (POU), serving the district, to prepare one or more
energy management plans (Plan). Specifically, this bill :
1)Specifies the Plan should include recommendations to reduce
air emissions and promote economic development through the
addition of new businesses and the retention of existing
businesses in the district, and other specified provisions.
2)Requires the California Public Utilities Commission (PUC) to
provide expedited review and to encourage IOUs to participate
jointly with districts in developing and administering viable
Plans.
3)Requires the POU and rural electric cooperatives governing
boards to encourage joint participation with local agencies
and gas corporations in developing, implementing, and
administering a viable Plan.
4)States Plan shall address the development of projects that
provide greater certainty of energy costs over a period of up
to 15 years for businesses developing in the district and
shall consider applying to the California Infrastructure and
Economic Development Bank.
5)Requires the Plan propose methods to fund identified
activities.
6)Authorizes funding from potential sources such as utility
ratepayer-funded programs, the California Infrastructure Bank,
the California Alternative Energy and Advanced Transportation
Financing Authority.
EXISTING LAW :
1)Requires the California Infrastructure and Economic
AB 628
Page 2
Development Bank to establish criteria, priorities, and
guidelines for the selection of projects to receive assistance
from the bank. (Government Code 63040)
2)Requires that projects that receive assistance from the bank,
among other things, facilitate effective and efficient use of
existing and future public resources so as to promote both
economic development and conservation of natural resources.
(Government Code 63041)
3)Requires the State Energy Resources Conservation and
Development Commission to adopt energy conservation standards
to reduce wasteful, uneconomic, inefficient, or unnecessary
consumption of energy, and to implement various programs to
provide financial assistance to specified entities for energy
efficient improvements. (Public Resources Code 25401)
4)Requires electric and gas corporations regulated by the Public
Utilities Commission to identify separate nonbypassable rates
components to collect revenues to fund cost-effective energy
efficiency and conservation activities. (Public Utilities Code
381 and 890)
5)Allows the PUC to authorize public utilities to engage in
programs to encourage economic development including Community
marketing and development, including: technical assistance to
support technology transfer, market research, site
inventories, industrial and commercial expansion and
relocation assistance, business retention and recruitment, and
management assistance, without discriminatory rates, for the
purpose of attracting or benefiting specific industries or
business entities, except that incentives may be provided for
the benefit of industries or business entities whose
facilities are located within the boundaries of enterprise
zones, economic incentive areas, recycling market development
zones, or federal rural enterprise communities (Public
Utilities Code 740.4)
6)Establishes the intent of the Legislature that the PUC allow
rate recovery of expenses and rate discounts supporting
economic development programs within the geographic area
served by any public utility to the extent the utility
incurring or proposing to incur those expenses and rate
discounts demonstrates that the ratepayers of the public
utility will derive a benefit from those programs. (Public
Utilities Code 740.4 (h))
AB 628
Page 3
FISCAL EFFECT : Unknown.
COMMENTS : According to the author, "California ports are an
essential contributor to the state's economy. Port activities
employ more than half-a-million people in California and
generate an estimated $7 billion in state and local tax revenue
annually. But increasing competition along the North American
coast and Mexican Ports are threatening to attract business away
from California. The trend will increase after the expansion of
the Panama Canal in 2014. In order to maintain California's
competitive edge, AB 628 will help stabilize energy supply and
costs for all ports statewide. This is an important economic
tool to help achieve business and environmental objectives."
1)California's ports : California's ports are a key component in
the state's economy. There are
eleven publicly-owned commercial ports throughout California.
International trade is a major force in California's economy,
currently accounting for nearly 25 percent of the state's
economy. With major port facilities in the San Francisco and Los
Angeles areas, California is a major gateway for products
entering and leaving the United States. According to the
California Marine and Intermodal Transportation System Advisory
Council (CalMITSAC), in 2007, more than 40% of the total
containerized cargo entering the United States, arrived at
California ports; and almost 30% of the nation's exports flowed
through ports in the Golden State. California's ports also
provide non-cargo related services and facilities, such as
passenger cruise line services, restaurant and hotel
accommodations, entertainment, and tourist attractions.
In addition to the vast economic benefits driven by a robust
port industry, there are environmental implications associated
with the port services. The ports have long been a focus as a
source of air emissions and California has implemented a number
of plans to address port air emissions. At the same time,
rising energy costs represents an important fact in the
competitive operation of the ports and port businesses.
2)Need for an energy management plan : The bill recognizes the
nexus between supply and cost
of energy, business development, and environmental management in
port and harbor districts. In light of this issue, AB 628
authorizes a port or harbor district to develop and implement a
AB 628
Page 4
Plan jointly with the serving electric or gas utilities in order
to reduce energy use, reduce unhealthy air emissions, promote
economic development and the addition of new businesses, and the
retention of existing businesses in that district.
At a minimum, the Plan would include -
An electric or natural gas load forecast.
Consideration of the role that distributed generation
and accurately priced utility services could play in
providing greater rate stability and energy cost certainty.
Proposed actions for the enhanced use of cost effective
energy efficiency and demand side management in existing
and new building in the port or harbor district.
A plan to reduce air emissions for vehicle use within
district boundaries, including vehicles used for movement
of commercial products. In this context, proposed actions
may include replacement of vehicles with lower emitting
alternatives and development of infrastructure to aid in
the refueling of alternative fuel vehicles, and may provide
for utility ownership or operation of such facilities to
provide services within the district.
Other actions and associated utility services to
implement the Plan.
The desired outcome of such a Plan would involve a harbor or
port district and the serving utility to identify programs
administered by the utility to facilitate economic development
and energy efficiency, among other things. The PUC would then
be required the conduct expedited review of the Plan to ensure
prompt implementation and encourage collaboration by the
utilities and districts in developing and administering a Plan.
Upon review and approval by the PUC a special tariff could be
established for these facilities to implement the Plan.
In the case of the POUs, the governing boards are required to
encourage joint participation with local agencies and gas
corporations in developing and administering a Plan.
1)Who pays for the plan? : The bill requires the Plan propose
methods to fund identified
activities. Several funding sources are authorized to
facilitate implementation of a Plan such as utility
ratepayer-funded programs, the California Infrastructure and
Economic Development Bank, and the California Alternative Energy
and Advanced Transportation Financing Authority.
AB 628
Page 5
2)Technical amendment : This bill's Section 63045.1 conflicts
with Section 63045.1 in AB 1079
(Bradford). The committee may wish make an amendment to
renumber 63045.1 to 63045.2 in this bill to resolve this
conflict.
REGISTERED SUPPORT / OPPOSITION :
Support
Chula Vista Chamber of Commerce
Jess E. Van Deventer, Member, Sweetwater Authority Board
Jim Unger, Board Member of the San Diego Port Tenants
Association
Ron Morrison, Mayor, City of National City
San Diego Gas & Electric (SDG&E)
Southern California Gas Company
Opposition
None on file.
Analysis Prepared by : DaVina Flemings / U. & C. / (916)
319-2083