BILL ANALYSIS Ó SENATE COMMITTEE ON APPROPRIATIONS Senator Ricardo Lara, Chair 2015 - 2016 Regular Session AB 33 (Quirk) - California Global Warming Solutions Act of 2006: Energy Sector Emissions Reduction Advisory Council ----------------------------------------------------------------- | | | | | | ----------------------------------------------------------------- |--------------------------------+--------------------------------| | | | |Version: August 18, 2015 |Policy Vote: E., U., & C. 11 - | | | 0, E.Q. 7 - 0 | | | | |--------------------------------+--------------------------------| | | | |Urgency: No |Mandate: No | | | | |--------------------------------+--------------------------------| | | | |Hearing Date: August 24, 2015 |Consultant: Marie Liu | | | | ----------------------------------------------------------------- This bill meets the criteria for referral to the Suspense File. Bill Summary: AB 33 would create the Energy Sector Emissions Reduction Advisory Council (council) which would be charged with making recommendations on reducing GHG emissions associated with electricity generation in order to inform the next scoping plan update by the Air Resources Board (ARB). Fiscal Impact: One-time costs between $400,000 and $900,000 to the Energy Resources Programs Account (General Fund) for the California Energy Commission (CEC) to conduct the required analyses. One-time costs of approximately $61,000 to the Public Utilities Reimbursement Account (special) for the California Public Utilities Commission (CPUC) to participate in the council. One-time costs of $50,000 from the Cost of Implementation AB 33 (Quirk) Page 1 of ? Account (special) for the ARB to comply with Bagley-Keene requirements. Background: The California Global Warming Solutions Act of 2006 (referred to as AB 32, HSC §38500 et seq.) requires the ARB to determine the 1990 statewide greenhouse gas (GHG) emissions level, to approve a statewide GHG emissions limit equivalent to that level that will be achieved by 2020, and to adopt GHG emissions reductions measures by regulation. ARB is required to adopt, by January 1, 2009, a scoping plan for achieving the maximum technologically feasible and cost-effective reductions in GHG emissions by 2020 and to update the scoping plan at least once every five years. The first scoping plan was completed in 2008 and the first update was adopted on May 22, 2014. In preparing and approving a scoping plan, the ARB must consult with the California Public Utilities Commission (CPUC), and the California Energy Commission (CEC) on all elements of its plan that pertain to energy-related matters. Proposed Law: This bill would create the Energy Sector Emissions Reduction Advisory Council (council) which will be responsible for recommending strategies to reduce GHG emissions associated with the electricity sector to be incorporated into the scoping plan. The council would consist of the chair of the California Energy Commission, president of the California CPUC, president of the CAISO, chair of the SWRCB, and chair of the ARB. To determine its recommendation, this bill would require the council to consider the following strategies: Increasing the volume of renewable energy generation Deepening regional coordination Increasing energy storage Increasing operational flexibility of natural gas-fired electrical generation facilities Using renewable energy generation to provide operational flexibility Deploying GHG emission reduction technology at existing fossil fuel-fired facilities Increasing the role of demand response Increasing energy efficiency. AB 33 (Quirk) Page 2 of ? Ensuring adequate generating capacity is available through measures such as multi-year capacity or reliability payments. The analysis of the strategies would be required to include an economic analysis and an analysis of the benefits to the health, safety, and welfare of the state residents, worker safety, and the environment. The council must convene by February 1, 2016 and finalize its recommendations early enough to be considered in the next scoping update. Its recommendations must be available for public comment for at least 30 days before becoming public. The council would cease to exist as of December 31 after completing its recommendations. Staff Comments: The idea that the CEC and the CPUC should be consulted in the scoping plan update as it pertains to the electricity sector and the requirement to consider the technological feasibility and cost-effectiveness of potential GHG emission reduction measures are already in existing law. This bill, however, adds specificity to how the council members must satisfy its existing statutory requirements. In particular, this bill would require that certain analyses, such as the economic analysis, be conducted on the various listed strategies before the strategy is recommended for inclusion in the scoping plan, which is a departure from existing practice. The CEC estimates that the required analyses will cost between $400,000 to $900,000 depending on which council member is responsible for conducting the analyses. These costs are elevated because of the very short timeframe in the bill. The next update is planned for the end of 2016 according to the ARB. This bill would require the council to submit its recommendations in time for it to be considered in the next update, which will likely be summer 2016. To avoid impacting the release date of the next scoping plan, the council would likely have no more than five months to complete the required analyses and release the draft for 30 days of public review. This short timeframe may result in the council members having to contract AB 33 (Quirk) Page 3 of ? out much of the work at a higher cost. The CPUC estimates that it would need half of a position to participate in council activities. Costs for the CAISO and the SWRCB are likely to be minor and absorbable. The involved agencies al may have some costs associated with Bagley-Keene compliance. Since this work is to inform the Strategic Plan, presumably any workloads associated with ensuring meetings of the council are compliant with open meetings laws would be undertaken, and paid for, by the ARB. The ARB estimates that it may need up to one Executive Assistant classification position for one year for Bagley Keene compliance at a one-time cost of approximately $50,000. -- END --