BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 628| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 628 Author: Gorell (R) and Hall (D), et al. Amended: 9/11/13 in Senate Vote: 21 SENATE ENERGY, UTIL.& COMMUNIC. COMMITTEE : 8-0, 7/2/13 AYES: Padilla, Corbett, De León, DeSaulnier, Hill, Knight, Wolk, Wright NO VOTE RECORDED: Fuller, Cannella, Pavley SENATE APPROPRIATIONS COMMITTEE : 7-0, 8/30/13 AYES: De León, Walters, Gaines, Hill, Lara, Padilla, Steinberg ASSEMBLY FLOOR : 77-0, 5/29/13 (Consent) - See last page for vote SUBJECT : Energy management plans for harbor and port districts SOURCE : Sempra Energy DIGEST : This bill provides a framework for the development of energy management plans between specified port and harbor districts and investor-owned utilities (IOUs), publicly-owned utilities (POUs) and Community Choice Aggregators (CCAs), as defined, in order to reduce air emissions and promote economic development of the district. Senate Floor Amendments of 9/11/13 limit the CCAs authorization to develop energy management plans with local port districts to CONTINUED AB 628 Page 2 those established on or before July 1, 2013. ANALYSIS : Current decisions of the Public Utilities Commission (PUC) require IOUs to administer energy efficiency programs in multi-year portfolios designed to meet pre-established energy savings goals which are funded by ratepayer charges, currently at about $1 billion per year. Existing law: 1. Requires California's electric utilities to first meet their energy needs through cost effective energy efficiency measures. 2. Directs the PUC to authorize IOUs to engage in economic development programs and further permits the recovery of associated costs from ratepayers. 3. Authorizes California Alternative Energy and Advanced Transportation Financing Authority to issue bonds and fix fees, charges, and interest rates for loans in order to promote the creation of manufacturing, jobs, reduction of greenhouse gases, or reductions in air and water pollution or energy consumption. This bill: 1. Establishes a framework for the development of energy management plans between specified port and harbor districts, IOUs, POUs, and CCAs established on or before July 1, 2013, as defined. 2. Requires the plans to include assessments of current energy consumption, energy management issues, forecasts, domestic and international shipping requirements related to energy usage, measureable energy performance goals, recommendations for implementation, short and long-term objectives and authorizes utility ownership of alternative fuel vehicle infrastructure facilities. 3. Mandates that the PUC approve elements of the energy management plans that are jointly developed between specified port or harbor districts, IOUs and CCAs including ownership of alternative fuel vehicle infrastructure facilities. The CONTINUED AB 628 Page 3 PUC is also required to provide expedited review of jointly developed energy management plans. 4. Defines "district" as the Humboldt Bay Harbor, Recreation, and Conservation District, the Ports of Hueneme, Oakland, Long Beach, Los Angeles, Redwood City, Richmond, San Diego, San Francisco, Stockton, and West Sacramento, and any other harbor, recreation, and conservation district that operates a harbor or port in the state. Background Energy management plans . Energy management plans are negotiated plans between utility customers, local authorities, and servicing utilities that outline a comprehensive assessment of energy usage. The plans consider energy consumption, energy efficiency measures, and infrastructure in order to determine a policy and set of actions to manage the demand for energy. The Port of Los Angeles recently announced plans to cooperate with the Los Angeles Department of Water and Power to develop an Energy Management Action Plan. Energy management plans are not currently defined in statute; they are not explicitly authorized, nor are they prohibited. The At-Berth Regulations . The Air Resources Board (ARB) has developed regulations commonly referred to as the At-berth Regulations for ships at California ports. The Regulations are being implemented in stages and began in 2010. By 2014, the ARB will require that 50% of visits by container and passenger ships be powered by on-shore power, or that ship operators alternatively reduce 50% of emissions associated with their ships at-berth. Ultimately these percentages will be increased to 80% by 2020. Previously, ships visiting ports would power themselves with on-board diesel generators, which are a significant cause of air pollutants in port and harbor districts. The ARB regulations are intended to improve the air quality of these ports, but in doing so will increase demand for electricity power from the local electric utility. The ARB identifies three types of incentives for compliance with the at-berth regulations: 1. Emission credits that can be accumulated and used by fleets complying with the equivalent emissions reduction option; CONTINUED AB 628 Page 4 2. Proposition 1B (2006) funding available to reduce emissions from goods-movement activities; and 3. Carl Moyer funding available to reduce emissions of diesel emissions. PUC proceedings . The PUC currently requires IOUs to submit energy efficiency plans every two to three years for approval. The PUC approves the budgets and goals of the energy efficiency plans, but does not review every element or specific project. The IOUs develop energy efficiency goals, approved by the PUC, along with outreach plans for every class of ratepayers and also work with communities and large business sectors to develop energy management plans as called for in this bill. The PUC may authorize ratepayer funding of projects that pass benefits to ratepayers including energy savings. Common energy efficiency projects include retrofits on lighting, heating and air conditioning systems, replacement windows, and insulation installation. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No According to the Senate Appropriations Committee, annual costs up to $50,000 from the Public Utilities Reimbursement Account (special) to the PUC to incorporate information from the energy management plans into broader PUC considerations. SUPPORT : (Verified 9/12/13) Sempra Energy (source) California Asian Chamber of Commerce California Chamber of Commerce California Manufacturers and Technology Central City Association Chula Vista Chamber of Commerce City of National City Mayor, Ron Morrison Congress of California Seniors Hornblower Cruises and Events National City Chamber of Commerce OPPOSITION : (Verified 9/12/13) CONTINUED AB 628 Page 5 Clean Energy ASSEMBLY FLOOR : 77-0, 5/29/13 AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom, Blumenfield, Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian Calderon, Campos, Chau, Chávez, Chesbro, Conway, Cooley, Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox, Frazier, Beth Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon, Gorell, Gray, Grove, Hagman, Hall, Harkey, Roger Hernández, Jones, Jones-Sawyer, Levine, Logue, Lowenthal, Maienschein, Mansoor, Medina, Melendez, Mitchell, Morrell, Mullin, Muratsuchi, Nazarian, Nestande, Olsen, Pan, Patterson, Perea, V. Manuel Pérez, Quirk, Quirk-Silva, Rendon, Salas, Skinner, Stone, Ting, Wagner, Waldron, Weber, Wieckowski, Wilk, Williams, Yamada, John A. Pérez NO VOTE RECORDED: Holden, Linder, Vacancy JG/RM:k 9/12/13 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED