BILL ANALYSIS                                                                                                                                                                                                    



                                                                        AB 33


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          ASSEMBLY THIRD READING


          AB  
          33 (Quirk)


          As Amended  June 1, 2015


          Majority vote


           ------------------------------------------------------------------- 
          |Committee       |Votes |Ayes                |Noes                  |
          |                |      |                    |                      |
          |                |      |                    |                      |
          |----------------+------+--------------------+----------------------|
          |Natural         |9-0   |Williams, Dahle,    |                      |
          |Resources       |      |                    |                      |
          |                |      |                    |                      |
          |                |      |Cristina Garcia,    |                      |
          |                |      |Hadley, Harper,     |                      |
          |                |      |McCarty, Rendon,    |                      |
          |                |      |Mark Stone, Wood    |                      |
          |                |      |                    |                      |
          |----------------+------+--------------------+----------------------|
          |Appropriations  |12-0  |Gomez, Bonta,       |                      |
          |                |      |Calderon, Daly,     |                      |
          |                |      |Eggman,             |                      |
          |                |      |                    |                      |
          |                |      |                    |                      |
          |                |      |Eduardo Garcia,     |                      |
          |                |      |Gordon, Holden,     |                      |
          |                |      |Quirk, Rendon,      |                      |
          |                |      |Weber, Wood         |                      |
          |                |      |                    |                      |
          |                |      |                    |                      |
           ------------------------------------------------------------------- 








                                                                        AB 33


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          SUMMARY:  Establishes the Energy Integration Advisory Council  
          (Council) to make recommendations to the Air Resources Board (ARB)  
          regarding various strategies necessary for the energy grid to  
          integrate increased renewable energy strategies.  Specifically,  
          this bill:


          1)Establishes the Council, consisting of the following appointees  
            or their designees:


             a)   Chair of California Energy Commission (CEC).


             b)   President of Public Utilities Commission (PUC).


             c)   President of California Independent System Operator  
               (CAISO).


             d)   Chair of State Water Resources Control Board (SWRCB).


             e)   Chair of ARB.


          2)Requires the Council to complete recommendations for inclusion  
            in the AB 32 Scoping Plan consisting of: 


             a)   Analysis of various strategies to integrate a 40%, 50%,  
               and greater than 50% Renewables Portfolio Standard in order  
               to minimize and eliminate over-generation and the need for  
               curtailment, including six specified elements.










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             b)   Economic assessment of the various grid integration  
               strategies using the best available models and data.


             c)   Analysis of other benefits of the various grid integration  
               strategies.


          3)Provides that the Council's analysis is intended to assist in  
            establishing state policy and does not change any statute,  
            regulation, or regulatory decision.


          EXISTING LAW requires ARB, pursuant to California Global Warming  
          Solutions Act of 2006 (AB 32 (Nez), Chapter 488, Statutes of  
          2006), to: 


          1)Adopt a statewide greenhouse gas (GHG) emissions limit  
            equivalent to 1990 levels by 2020 and adopt regulations to  
            achieve maximum technologically feasible and cost-effective GHG  
            emission reductions.


          2)Prepare and approve a scoping plan, on or before January 1,  
            2009, and once every five years thereafter, for achieving the  
            maximum technologically feasible and cost-effective reductions  
            in GHG emissions from sources of emissions by 2020.


          FISCAL EFFECT:  According to the Assembly Appropriations  
          Committee, increased combined annual costs (various special funds)  
          for PUC, CAISO, SWRCB and CEC of up to $800,000 to perform the  
          duties required by this bill.


          COMMENTS:  As part of AB 32's direction that ARB adopt a statewide  
          GHG emissions limit equivalent to 1990 levels by 2020 and adopt  
          regulations to achieve maximum technologically feasible and  








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          cost-effective GHG emission reductions, AB 32 requires ARB to  
          prepare and approve a scoping plan at five-year intervals.  


          The first AB 32 scoping plan, adopted by ARB in 2008, described  
          the specific measures ARB and others must take to reduce statewide  
          GHG emissions to 1990 levels by 2020.  Pursuant to AB 32, the  
          reduction measures identified in the scoping plan had to be  
          proposed, reviewed, and adopted as individual regulations by  
          January 1, 2011, to become operative beginning on January 1, 2012.  
           According to ARB, a total reduction of 80 million metric tons  
          (MMT), or 16% compared to business as usual, is necessary to  
          achieve the 2020 limit.  Approximately 78% of the reductions will  
          be achieved through identified direct regulations.  ARB proposes  
          to achieve the balance of reductions necessary to meet the 2020  
          limit (approximately 18 MMT) through a cap-and-trade program that  
          covers an estimated 600 entities.


          In May 2014, ARB adopted a scoping plan update.  The scoping plan  
          update discusses the objective of achieving an 80% reduction by  
          2050 and the need for a midterm target, but does not propose or  
          adopt a specific target.  According to ARB, the update defines  
          ARB's climate change priorities for the next five years and sets  
          the groundwork to reach California's long-term climate goals.


          In his January 5, 2015, Inaugural Address, Governor Brown  
          announced the following "objectives for 2030 and beyond":


            Toward that end, I propose three ambitious goals to be  
            accomplished within the next 15 years:


               1)     Increase from one-third to 50 percent our  
                 electricity derived from renewable sources;










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               2)     Reduce today's petroleum use in cars and  
                 trucks by up to 50 percent;


               3)     Double the efficiency of existing buildings  
                 and make heating fuels cleaner.


            We must also reduce the relentless release of methane,  
            black carbon and other potent pollutants across  
            industries.  And we must manage farm and rangelands,  
            forests and wetlands so they can store carbon.  All of  
            this is a very tall order.  It means that we continue  
            to transform our electrical grid, our transportation  
            system and even our communities.


            I envision a wide range of initiatives:  more  
            distributed power, expanded rooftop solar,  
            micro-grids, an energy imbalance market, battery  
            storage, the full integration of information  
            technology and electrical distribution and millions of  
            electric and low-carbon vehicles.  How we achieve  
            these goals and at what pace will take great thought  
            and imagination mixed with pragmatic caution.  It will  
            require enormous innovation, research and investment.   
            And we will need active collaboration at every stage  
            with our scientists, engineers, entrepreneurs,  
            businesses and officials at all levels.


            Taking significant amounts of carbon out of our  
            economy without harming its vibrancy is exactly the  
            sort of challenge at which California excels.  This is  
            exciting, it is bold and it is absolutely necessary if  
            we are to have any chance of stopping potentially  
            catastrophic changes to our climate system.










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          Analysis Prepared by:                                               
                          Lawrence Lingbloom / NAT. RES. / (916) 319-2092     
                                                                    FN:  
          0000842