BILL ANALYSIS Ó
AB 590
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Date of Hearing: April 13, 2015
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Das Williams, Chair
AB 590
(Dahle) - As Introduced February 24, 2015
SUBJECT: Greenhouse Gas Reduction Fund
SUMMARY: Establishes the Biomass State Cost Share Account
(Account) within the Greenhouse Gas Reduction Fund (GGRF) and
requires an unspecified amount to be transferred annually from
the GGRF to the Account, to be available upon appropriation to
the California Energy Commission (CEC) for purposes of
maintaining the current level of biomass power generation in the
state and revitalizing currently idle facilities in
strategically located regions.
EXISTING LAW:
1)Requires the Air Resources Board (ARB), pursuant to California
Global Warming Solutions Act of 2006 [AB 32 (Núñez), Chapter
488, Statutes of 2006], to adopt a statewide GHG emissions
limit equivalent to 1990 levels by 2020 and adopt regulations
to achieve maximum technologically feasible and cost-effective
GHG emission reductions.
2)Authorizes ARB to permit the use of market-based compliance
mechanisms to comply with GHG reduction regulations, once
specified conditions are met.
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3)Establishes the GGRF and requires all moneys, except for fines
and penalties, collected by ARB from the auction or sale of
allowances pursuant to a market-based compliance mechanism
(i.e., the cap-and-trade program adopted by ARB under AB 32)
to be deposited in the Fund and available for appropriation by
the Legislature.
4)Establishes the GGRF Investment Plan and Communities
Revitalization Act [AB 1532 (John A. Pérez), Chapter 807,
Statutes of 2012] to set procedures for the investment of GHG
allowance auction revenues. AB 1532 authorizes a range of GHG
reduction investments and establishes several additional
policy objectives.
5)Requires the investment plan to allocate: 1) a minimum of 25%
of the available moneys in the fund to projects that provide
benefits to identified disadvantaged communities; and, 2) a
minimum of 10% of the available moneys in the fund to projects
located within identified disadvantaged communities [SB 535
(De Leon), Chapter 830, Statutes of 2012].
FISCAL EFFECT: Unknown
COMMENTS:
1)Background. The 2014-15 Budget Act allocates cap-and-trade
revenues for the 2014-15 fiscal year and establishes a
long-term plan for the allocation of cap-and-trade revenues
beginning in fiscal year 2015-16. The Budget continuously
appropriates 35 percent of cap-and-trade funds for investments
in transit, affordable housing, and sustainable communities.
Twenty-five percent of the revenues are continuously
appropriated to continue the construction of high-speed rail.
The remaining 40 percent will be appropriated annually by the
Legislature for investments in programs that include
low-carbon transportation, energy efficiency and renewable
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energy, and natural resources and waste diversion. No funds
have been specifically appropriated for biomass power
generation.
2)Author's statement:
California is in danger of losing the one asset it has to
divert forest fuel reduction residues and other wood waste
materials today. In the last 12 months alone California has
closed five biomass facilities due to expiring contracts and
poor economics. That's a loss of 108 MWs of baseload
renewable power and hundreds of jobs, both at the plants and
in the fuel supply infrastructure. California's RPS program
is failing to provide any incentive to procure biomass power
for a more balanced portfolio of renewables. Despite the
call for environmental and economic benefit considerations
in the RPS program, the only growth that is occurring in the
renewable industry is coming from solar and wind. By 2020,
when the state is mandated to procure 33 percent of its
electricity supply from renewables, intermittents could
account for some three-quarters of total renewables while
half of the biomass plants in the state will be closed.
3)Double referral. This bill has been double referred to the
Utilities and Commerce Committee.
REGISTERED SUPPORT / OPPOSITION:
Support
California Biomass Energy Alliance (sponsor)
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Associated Builders and Contractors of California
AGRA Marketing
Brahma Group
C & S Waste Solutions of Lassen County
CR&R Incorporated
CT Bioenergy Consulting
California Chapters of the Solid Waste Association of North
America (SWANA)
California Forestry Association
Covanta Energy
EWP Renewable Corporation
IHI Power Services
Independent Energy Producers Association
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Kochergen Frams Composting
Lake County Waste Solutions
Nortech Waste
Old Durham Wood
Orange County Business Council
Pacific Recycling Solutions
Pacific-Ultra Power Chinese Station
Rio Bravo Fresno
Rural County Representatives of California
Sierra County
Sierra Pacific Industries
Sustainable Forest Action Coalition
TriCo Welding Supplies
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Ukiah Waste Solutions
Wilson Ag
55 individuals
Opposition
California Chamber of Commerce
Center for Biological Diversity
Analysis Prepared by:Lawrence Lingbloom / NAT. RES. / (916)
319-2092
AB 590
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