BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 628
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          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  








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            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))








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           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  








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          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.   








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           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