BILL ANALYSIS �
SB 760
Page 1
SENATE THIRD READING
SB 760 (Wright)
As Amended August 19, 2013
Majority vote
SENATE VOTE :39-0
NATURAL RESOURCES 9-0 APPROPRIATIONS 17-0
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|Ayes:|Chesbro, Grove, Bigelow, |Ayes:|Gatto, Harkey, Bigelow, |
| |Garcia, Muratsuchi, | |Bocanegra, Bradford, Ian |
| |Patterson, Skinner, | |Calderon, Campos, |
| |Stone, Williams | |Donnelly, Eggman, Gomez, |
| | | |Hall, Holden, Linder, |
| | | |Pan, Quirk, Wagner, Weber |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Specifies that air districts are prohibited from
requiring the physical destruction of electrical generating
facility equipment that is or will be retired unless required by
the new source review program of the federal Clean Air Act (CAA)
or the owner or operator retires the equipment to provide
emission reduction credits (ERCs), emission offsets, or an
offset exemption from an air district.
EXISTING LAW :
1)Under the CAA:
a) Requires the United States Environmental Protection
Agency (EPA) to set national ambient air quality standards
(NAAQS); authorizes states to adopt more stringent
standards; and requires states to develop a general plan,
known as a state implementation plan (SIP), to attain and
maintain the standards for each area designated
nonattainment for NAAQS. The SIP is subject to EPA
approval.
b) Requires the SIP to include a New Source Review (NSR)
permitting program for nonattainment areas for the
construction and operation of new and modified major
sources of air emissions. NSR regulations require that
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emission increases from the permitting of major sources be
offset by corresponding emission reductions.
2)Under state law:
a) Specifies that the Air Resources Board (ARB) has primary
responsibility for control of mobile source air pollution,
including adoption of rules for reducing vehicle emissions
and the specification of vehicular fuel composition.
Requires that ARB coordinate efforts to attain and maintain
ambient air quality standards.
b) Specifies that air pollution control districts (APCDs)
and air quality management districts (AQMDs) have primary
responsibility for controlling air pollution from all
non-mobile sources and establishes certain powers, duties,
and requirements for those districts.
c) Requires every APCD and AQMD in a federal nonattainment
area for any NAAQS to establish a system by which air
contaminant emission reductions that are to be used to
offset future emission increases can be banked prior to use
to offset future emission increases. The system must
provide that only those emission reductions not otherwise
required by any federal, state, or district requirement are
approved by the district.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, this bill has no direct state costs.
COMMENTS : According to the author, even though the EPA does not
require an owner of a retired facility to demolish or otherwise
deliberately damage equipment in order to demonstrate compliance
with the CAA, some air districts in California have interpreted
EPA policy regarding "cost and time required to reactivate the
facility" as requiring owners of power generating facilities to
deliberately and systematically damage and destroy equipment to
make the facility permanently inoperable. The author states
that this policy "endangers electric grid reliability and
needlessly places the public at risk." By forcing power
generators to deliberately damage and destroy equipment at the
time of retirement and shutdown, these plants cannot be used in
the event of an unplanned electricity shortage.
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Background . On January 31, 2012, the San Onofre Nuclear
Generation Station (SONGS) unexpectedly shut down after a
radioactive steam leak was discovered. According to the
California Independent System Operator (CAISO), the loss of
power generation from SONGS means that an additional 4,300 and
4,600 megawatts are needed in the region. Prior to the
unplanned shut down of SONGS, two electric generating units on
the AES Huntington Beach plant were sold to Edison Mission
Energy, which permanently retired the units in order to gain
access to South Coast Air Quality Management District's (SCAQMD)
internal offsets for Edison Mission Energy's new Walnut Creek
powerplant in the City of Industry. SCAQMD required the owner
to render the equipment inoperable by destroying and damaging
major pieces of equipment several months before the new plant
was scheduled to be operational. The previously retired
Huntington Beach units were repaired last year and were brought
back as generators to fill the void left by the SONGS for the
summer peak in energy consumption in 2012. According to CAISO,
the two units have been converted to synchronous condensers,
which do not produce emissions, and will be operational in time
to provide dynamic voltage support this summer.
Air district rules . In compliance with the CAA NSR
requirements, air districts in nonattainment areas implement
regulations for new, modified, or relocated facilities to ensure
that the operations of such facilities do not interfere with
progress in attainment of the national and state ambient air
quality standards. The specific air quality goal of this
regulation is to ensure the use of Best Available Control
Technology and to offset emission increases from new or modified
permitted sources of nonattainment air contaminants or their
precursors. Air districts in nonattainment regions are required
to have programs that allow actions or projects that result in a
quantifiable reduction in emissions from a permitted facility to
be banked and used to offset future emissions increases. These
ERCs may be used internally to offset future emission increases
for the entity that generated them, or sold on the open market
to other entities that are required to obtain offsets for
planned projects.
For SCAQMD, Rule 1309 requires that emission reductions for
generation of ERCs be real, quantifiable, permanent, and
federally enforceable. Federal law under the CAA NSR
regulations also specifies those emission reductions generating
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ERCs be permanent. Other district rules allowing facilities to
replace equipment with functionally identical equipment and
allowing facilities to replace an existing electric utility
steam boiler with more advanced, efficient technologies without
requiring additional offsets require that the existing equipment
is shut down and permanently disabled. Those rules are part of
the district's EPA-approved SIP, required under the federal CAA,
and are federally enforceable.
Analysis Prepared by : Elizabeth MacMillan / NAT. RES. / (916)
319-2092
FN: 0001852