BILL ANALYSIS                                                                                                                                                                                                    



          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 --