BILL ANALYSIS Ó
SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
ALEX PADILLA, CHAIR
AB 1763 - Perea Hearing Date:
June 17, 2014 A
As Amended: May 5, 2014 FISCAL B
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DESCRIPTION
Current law requires the California Energy Commission (CEC) to
develop, every two years, an integrated energy policy report
(IEPR) that assesses major energy trends and issues facing the
state (including, but not limited to, supply, demand, pricing,
reliability, efficiency, and impacts on public health and
safety, the economy, resources, and the environment) and
presents policy recommendations based on assessments of the most
pressing energy trends and issues. (Public Resources Code §
25300 et seq.)
This bill directs the CEC, in consultation with the California
Independent System Operator (CAISO), other relevant state and
local agencies, and interested stakeholders to develop a "state
energy plan" for 2030 and 2050 as part of its 2015 IEPR. The
bill defines "energy" as electricity, natural gas, and
transportation fuels that are used in the state. The bill
directs the CEC to consider, when developing the plan, energy
forecasts; an analysis of California's current and future energy
infrastructure needs; and recommendations on ensuring long-term
energy resource reliability, sustainability, and affordability
through 2050.
BACKGROUND
Function of State Energy Plans - A 2013 report<1> by the
National Association of State Energy Officials states the
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<1> An Overview of Statewide Comprehensive Energy Plans From
2002 to 2011, NASEO, July, 2013;
http://www.naseo.org/Data/Sites/1/naseo_39_state_final_7-19-13.pd
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following:
Although statewide energy plans differ in everything
from their general format to their goals and
recommendations, they all serve as a roadmap for
achieving a prosperous and secure energy future ? The
majority of plans stress the development of a
diversified energy portfolio to meet the states'
economic, environmental, and security objectives.
Many states have tasked the State Energy Offices as
the lead organizing and authoring agencies, most state
energy plans are produced through extensive
stakeholder engagement processes involving other state
agencies, private sector interests, and input from the
general public.
Energy Action Plan - In 2003, the CEC, the California Public
Utilities Commission (CPUC), and the California Power Authority
(now defunct) adopted the Energy Action Plan, which articulated
a common, unified approach to meeting California's energy needs.
In 2005, the CEC and the CPUC adopted a second plan, Energy
Action Plan II, to reflect the policy changes and actions of the
ensuing two years. By 2008, the state's energy policies had -
and have since - been significantly influenced by the passage of
Assembly Bill 32, yet the agencies did not find it necessary or
productive to create a completely new plan. The 2008 Energy
Action Plan Update examined the state's energy-related actions
in light of its commitment to reducing greenhouse gas emissions.
No other plan has been written since the 2008 Update.
CEC Integrated Energy Policy Report (IEPR) - The IEPR, which is
updated every two years,<2> presents in-depth assessments of
energy, supply, demand, pricing, reliability, efficiency, and
impacts on human and environmental health and safety. Each
assessment is based on a set of data and assumptions, which may
differ in their completeness and/or accuracy. The IEPR also
presents policy recommendations (based on the assessments)
intended to help decision-makers reach stated end goals:
conserve resources, protect the environment, ensure energy
reliability, enhance the state's economy, and protect public
health and safety. Importantly, the assessments and associated
policy recommendations are not mandates and, therefore, require
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<2> The next IEPR is due November 1, 2015.
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action from the Governor, the Legislature, or other
decision-makers to have any effect.
COMMENTS
1. Author's Statement . "Over the last fifteen years we have
seen major changes to California's energy system. We have
the most progressive energy policies in the nation and have
implemented some of the most innovative environmental
programs to help curb carbon emissions and improve air
quality. However, many of our policies have been adopted
independently of each other and implemented in a variety of
regulatory agency settings. There is currently no energy
plan that encompasses all of our existing energy policies
and provides a framework for our energy platform moving
forward. Having a state energy plan, forecasted out for the
next 35 years will allow the Legislature and Governor to
have a focused plan that can be used to inform future
policy and decision making."
2. IEPR Duplication ? This bill directs the CEC to develop a
state energy plan that promotes economic growth, ensures
energy resources, complements environmental goals, and
positions the state as a leader. This is different than the
state's IEPR, which presents multiple assessments and makes
policy recommendations based on those assessments but does
not direct the overall development of California's energy
future. The IEPR includes a broad, 10-year (volumetric)
forecast of demand for electricity. It does not forecast
energy infrastructure needs or any other dimension of the
state's energy economy.
3. Research and Analysis, Not Just Synthesis, Would be
Required . The author states that the state energy plan
would require the synthesis and presentation of information
already available to the CEC. The CEC reports that this
information (used to write the IEPR) represents only a
portion of what would be required to develop the state
energy plan called for in this bill. For example, CEC staff
has neither data nor analytical capability regarding
population projections.
Moreover, forecasts post-2030 would be speculative because
current and mid-term conditions cannot accurately predict
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conditions that far into the future. As recent history
reflects, a prescriptive, one-time energy plan developed 35
years ago could not have foreseen or planned for the
impacts of innovative technology (relating to energy
efficiency, rooftop solar, fuel cells, etc.) on our current
energy and transportation sectors. Storage was not
considered an option years ago, but is quickly becoming
commercially viable.
4. Overall, This Plan May Be Premature . In Joint testimony
to the Little Hoover Commission on April 11, 2014, the
Governor's Office, CEC, CAISO, and CPUC stated that state
agencies are jointly conducting comprehensive data analyses
and modeling to determine a 2030 greenhouse gas reduction
target and developing an integrated, economy-wide plan for
achieving that target. The plan will consider the interplay
between diverse sectors,<3> cost impacts, and the proper
sequence for implementing various reduction strategies.
The Administration anticipates completing the plan by the
end of 2014 and releasing it for public review and comment
as a supplement to the AB 32 Scoping Plan in early 2015.
Based on public and stakeholder input, the Administration
anticipates submitting a proposal to implement the plan to
the Legislature later in 2015.
5. Related Legislation .
AB 1257 (Bocanegra, Chapter 749, Statutes of 2013) required
the CEC, beginning November 1, 2015 and every four years
thereafter, to analyze natural gas use in the state and
identify strategies to maximize the benefits of natural
gas, as specified, in conjunction with the IEPR. The
legislation only focused on natural gas use and was not
directed at all energy sources.
AB 1779 (Gaines) would require the CEC to prepare a report
that assesses the effect in the aggregate of specified
state policies on electricity reliability and rates, and
whether these policies are achieving the environmental and
economic goals of these policies. Status: Failed passage in
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<3> The major sectors of the economy that contribute to GHG
emissions include energy, transportation, water, agriculture,
natural and working lands, waste management, etc.
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the Assembly Committee on Natural Resources.
SB 1125 (Pavley) would require the State Air Resources
Board (ARB) to develop greenhouse gas emissions targets for
2030 and report them to the Legislature. Status: Held in
the Senate Committee on Appropriations.
AB 2050 (Quirk) would require the ARB to include specified
items, a proposal for further reducing greenhouse gas
emissions by 2050, in the next AB 32 (Nunez, Chapter 488,
Statutes of 2006) Scoping Plan Update (2019) and to report
to the Legislature. The current proposed update arguably
already includes 2050 and intermediate goal "proposals,"
though it stops short of proposing or adopting specific
targets. Status: Pending consideration in the Senate
Committee on Environmental Quality.
6. Double Referral . Should this bill be approved by the
committee, it will be re-referred to the Senate Committee
on Environmental Quality for its consideration.
ASSEMBLY VOTES
Assembly Floor (70-3)
Assembly Appropriations Committee (16-0)
Assembly Natural Resources (8-0)
Assembly Utilities and Commerce Committee
(11-0)
POSITIONS
Sponsor:
Author
Support:
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|CA Asian Pacific Chamber of |Inland Empire Economic |
|Commerce |Partnership |
|California Business Roundtable |Little Hoover Commission |
|California Chamber of Commerce |Los Angeles Area Chamber of |
|California Grocers Association |Commerce |
|California League of Food |Los Angeles County Business |
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|Processors |Federation |
|CA Manufacturers and Technology |National Federation of |
|Association |Independent Business |
|California Small Business |Orange County Business Council |
|Association |San Diego Gas & Electric |
|City of Bell |Company |
|City of Lynwood |San Diego Regional Chamber of |
|DeWitt Petroleum |Commerce |
|Industrial Environmental |San Gabriel Valley Economic |
|Association |Partnership |
| |Western States Petroleum |
| |Association |
| |2 Individuals |
| | |
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Oppose:
American Lung Association in California
Asian Pacific Environmental Network
California League of Conservation Voters
Clean Power Campaign
Physicians for Social Responsibility - Los Angeles
Sierra Club California
Alexis Erwin
AB 1763 Analysis
Hearing Date: June 17, 2014
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