Amended in Assembly May 4, 2015

Amended in Assembly April 21, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 590

Introduced by Assembly Members Dahle and Salas

(Coauthors: Assembly Members Brough, Chávez, Gordon, Olsen, Mark Stone, and Wood)

February 24, 2015

An act to add Section 16428.81 to the Government Code, relating to greenhouse gases.

LEGISLATIVE COUNSEL’S DIGEST

AB 590, as amended, Dahle. Greenhouse Gas Reduction Fund.

The California Global Warming Solutions Act of 2006 designates the State Air Resources Board as the state agency charged with monitoring and regulating sources of emissions of greenhouse gases. The act authorizes the state board to include the use of market-based compliance mechanisms. Existing law requires all moneys, except for fines and penalties, collected by the state board from the auction or sale of allowances as part of a market-based compliance mechanism to be deposited in the Greenhouse Gas Reduction Fund.

This bill would create the Biomass State Cost Share Account within the Greenhouse Gas Reduction Fund. The bill would require certain amounts to be transferred from the Greenhouse Gas Reduction Fund to the Biomass State Cost Share Account for the 2015-16 through 2019-20 fiscal years. The moneys in the account, upon appropriation, would be available for expenditure by the State Energy Resources Conservation and Development Commission for the purposes of maintaining the current level of biomass power generation in the state and revitalizing currently idle facilities in strategically located regions. The bill would establish requirements for an applicant to receive funding from the account for a facility’s eligible electrical generation.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

The Legislature finds and declares all of the
following:

(a) California leads the nation in bioenergy production, with
one-half of the industry located in this state, which has an abundant
supply of bioenergy resources.

(b) Biomass power generation provides electric ratepayers with
clean, renewable energy that supplies the grid 24 hours a day,
seven days a week regardless of atmospheric conditions. These
benefits are paid for through contracts with the state’s electric
utilities.

(c) Biomass power generation also provides valuable,
environmentally preferred wood waste disposal service for the
disposal of 7.5 to 8 million tons of California’s annual solid waste
stream and the avoidance of 1.5 to 3.5 million tons annually of
biogenic CO₂ emissions. By diverting biomass residues away from
open burning, landfill burial, and accumulation in forests, the state
benefits from reduced criteria air pollutants and greenhouse gas
emissions, landfill capacity use, forest and watershed improvement,
rural employment and economic development, and energy diversity
and security. These services have been provided without
compensation in the past, as the electricity market was able to fully
underwrite the cost.

(d) Numerous studies have shown a link between particulate
matter (PM) exposure and asthma morbidity outcomes in children,
and between exposure to ambient PM and increased heart and lung
disease and death and health effects on the central nervous system.
The latest study was provided by scientists at the California
Environmental Protection Agency’s Office of Environmental
Health Hazard Assessment. Diverting wood material from open
burning to biomass power production is an essential PM reduction
strategy for many air districts around the state.

(e) The environmental services provided by biomass power
production are clearly valuable to society and therefore provide
the rationale for a state policy to pay for biomass power generation
commensurate with its provision of waste disposal services.

(f) Biomass power generation fits in the Cap and Trade Auction
Proceeds Investment Plan in the categories of forest and ecosystem
management, agricultural management, and waste diversion, and
is identified as a recommended investment.

SEC. 2.  

Section 16428.81 is added to the Government Code,
to read:

16428.81.  

(a) There is hereby created the Biomass State Cost
Share Account within the Greenhouse Gas Reduction Fund
established pursuant to Section 16428.8.

(b) The following amounts shall be transferred from the
Greenhouse Gas Reduction Fund to the Biomass State Cost Share
Account:

(1) In the 2015-16 fiscal year, seventy-four million dollars
($74,000,000).

(2) In the 2016-17 fiscal year, one hundred eighteen million
dollars ($118,000,000).

(3) In the 2017-18, 2018-19, and 2019-20 fiscal years, one
hundred twenty million dollars ($120,000,000) in each of those
fiscal years.

(c) The moneys in the Biomass State Cost Share Account, upon
appropriation by the Legislature, shall be available to the State
Energy Resources Conservation and Development Commission
for expenditure for the purposes of maintaining the current level
of biomass power generation in the state and revitalizing currently
idle facilities in strategically located regions. Protecting these
existing resources will help the state meet its goals to reduce
greenhouse gas emissions, protect existing jobs, and provide waste
disposal benefits.

(d) To be eligible for funding from the Biomass State Cost Share
Account, a facility’s solid fuel biomass electrical generation shall
satisfy begin delete all end delete begin insert both end insert of the following requirements:

(1) The energy is generated on and after January 1, 2016.

(2) The energy is generated within the state and sold to
customers within the state.

begin delete

(3) The energy is net-metered generation. “Net-metered
generation” for purposes of this section means energy that is sold
to the grid and is not used onsite for the facility’s own electrical
demand.

end delete

(e) A facility seeking funding from the Biomass State Cost Share
Account shall submit an application to the commission that
demonstrates that it is a solid fuel biomass facility and is California
Renewables Portfolio Standard (RPS) Program certified. An
applicant shall submit monthly invoices to the commission to
document eligible generation and the fuel used for that generation.
The commission shall review the submitted invoices and make
monthly incentive payments to each applicant based on the eligible
generation and the applicable production incentive rate.