BILL ANALYSIS Ó
AB 590
Page 1
ASSEMBLY THIRD READING
AB
590 (Dahle and Salas)
As Amended May 28, 2015
Majority vote
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|Committee |Votes |Ayes |Noes |
| | | | |
| | | | |
|----------------+------+--------------------+--------------------|
|Natural |9-0 |Williams, Dahle, | |
|Resources | | | |
| | | | |
| | |Cristina Garcia, | |
| | |Hadley, Harper, | |
| | |McCarty, Rendon, | |
| | |Mark Stone, Wood | |
| | | | |
|----------------+------+--------------------+--------------------|
|Utilities |15-0 |Rendon, Patterson, | |
| | |Achadjian, Bonilla, | |
| | |Burke, Dahle, | |
| | |Eggman, | |
| | | | |
| | | | |
| | |Cristina Garcia, | |
| | |Hadley, Roger | |
| | |Hernández, | |
| | |Obernolte, Quirk, | |
| | |Santiago, Ting, | |
| | |Williams | |
AB 590
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| | | | |
|----------------+------+--------------------+--------------------|
|Appropriations |17-0 |Gomez, Bigelow, | |
| | |Bonta, Calderon, | |
| | |Chang, Daly, | |
| | |Eggman, Gallagher, | |
| | | | |
| | | | |
| | |Eduardo Garcia, | |
| | |Gordon, Holden, | |
| | |Jones, Quirk, | |
| | |Rendon, Wagner, | |
| | |Weber, Wood | |
| | | | |
| | | | |
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SUMMARY: Provides that moneys in the Greenhouse Gas Reduction
Fund (GGRF) may be made available, upon appropriation by the
Legislature, 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 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)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
León), Chapter 830, Statutes of 2012].
FISCAL EFFECT: According to the Assembly Appropriations
Committee:
1)Unknown cost pressures (GGRF).
2)Annual CEC administrative costs between $1.8 and $2.3 million
(GGRF) for the duration of the program.
3)Annual costs between $175,000 and $316,000 (GGRF) for ARB to
coordinate with CEC on program development, implementation and
the quantification of GHG reductions to establish the legal
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nexus for the use of cap and trade revenue funds.
COMMENTS: Biomass is a waste and byproduct consisting of organic
residues from plants and animals which are obtained primarily from
harvesting and processing agricultural and forestry crops, and can
be utilized as fuels for producing energy. Examples of biomass
include, forest slash, urban wood waste, lumber waste,
agricultural wastes, etc.
At its peak, California's biomass industry produced 800 megawatts
(MW) of electricity from 66 direct combustion biomass facilities.
By 1996, the energy production from biomass had dwindled to about
590 MW. Currently there are still about 30 direct combustion
biomass facility operations with a capacity of 640 MW. The
reduction in biomass energy produced was a result of the
expiration of price support and incentives provided to the biomass
industry from the state.
According to the author, 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 expired
contracts and poor economics. This bill provides cost sharing
strategies essential for resolving this problem.
The 2014-15 Budget Act allocates cap-and-trade revenues for the
2014-15 Fiscal Fear 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% 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% will be
appropriated annually by the Legislature for investments in
programs that include low-carbon transportation, energy efficiency
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and renewable energy, and natural resources and waste diversion.
No funds have been specifically appropriated for biomass power
generation.
Analysis Prepared by:
Lawrence Lingbloom / NAT. RES. / (916) 319-2092
FN:
0000870