BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     AB 678


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          Date of Hearing:   April 27, 2015


                        ASSEMBLY COMMITTEE ON TRANSPORTATION


                                 Jim Frazier, Chair


          AB 678  
          (O'Donnell) - As Amended April 21, 2015


          SUBJECT:  Greenhouse gases:  Energy Efficient Ports Program


          SUMMARY:  Requires the Air Resources Board (ARB), in conjunction  
          with the California Energy Commission (Commission), to develop  
          the Energy Efficient Ports Program (EEPP) to fund energy  
          efficiency upgrades and investments at public ports.   
          Specifically, this bill:  


          1)Requires ARB, in conjunction with the Commission, to develop  
            and implement the EEPP to fund efficiency upgrades and  
            investments at public ports that help reduce emissions of  
            criteria pollutants, toxic air contaminants, and greenhouse  
            gases (GHGs).


          2)Requires that projects eligible for funding in the EEPP  
            include, but not necessarily be limited to:


             a)   Installation of solar technologies at marine terminals,  
               warehouses, and other freight facilities;


             b)   Replacement of conventional lighting with light emitting  








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               diodes;


             c)   Installation of cold ironing or shorepower equipment and  
               vessels beyond those required by existing regulations; 


             d)   Deployment of zero- and near-zero emission vehicles and  
               infrastructure technologies including, but not necessarily  
               limited to, stationary fuel cells, energy storage and  
               battery, and battery electric trucks; and,


             e)   Projects that reduce grid-based energy demand.


          3)Requires that ARB, in consultation with the Commission,  
            develop guidelines for the implementation of the EEPP  
            consistent with the California Global Warming Solutions Act of  
            2006 pursuant to AB 32 (Nunez), Chapter 488, Statutes of 2006.


          4)Makes monies from the Greenhouse Gas Reduction Fund (GGRF)  
            available for appropriation by the Legislature to the EEPP.


          EXISTING LAW:  


          1)Required ARB, pursuant to AB 32, to adopt a statewide GHG  
            emissions limits equivalent to 1990 levels by 2020 and adopt  
            regulations to achieve maximum technologically feasible and  
            cost-effective GHG emission reductions.  

          2)Authorizes ARB, pursuant to AB 32, to use market-based  
            compliance mechanisms (cap-and-trade) to comply with GHG  
            reduction regulations.

          3)Established the GGRF and requires all moneys, except for fines  








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            and penalties, collected by ARB pursuant to cap-and-trade be  
            deposited in the GGRF and available for appropriation by the  
            Legislature.

          4)Established the GGRF Investment Plan and Communities  
            Revitalization Act, pursuant to 
          AB 1532 (John A. Pérez), Chapter 807, Statutes of 2012, which  
            set procedures for the investment of GHG allowance auction  
            revenues.

          5)Requires, pursuant to SB 535, (De Leon), Chapter 830, Statutes  
            of 2012, that the investment plan allocate a minimum of 25% of  
            the available moneys in the GGRF to projects that provide  
            benefits to identified disadvantaged communities and a minimum  
            of 10% of the available moneys in the GGRF to projects located  
            within identified disadvantaged communities.  


          FISCAL EFFECT:  Unknown


          COMMENTS: According to the author and the sponsor, the Pacific  
          Merchant Shipping Association (PMSA), the maritime and ports  
          industry have made an estimated $1.8 billion investment into  
          infrastructure necessary to implement ARB's shorepower  
          requirements and, as a result, have kept thousands of tons of  
          criteria pollutants from entering the atmosphere. As a result,  
          however, the port's energy demands have grown substantially and,  
          additionally, there are a number remaining emissions reduction  
          improvements that still need to be made to help reduce  
          port-generated emissions.  


          To help the ports complete these improvements, the author has  
          introduced AB 678 to fund projects to help California ports  
          reduce power demands, operating costs, and overhead and  
          counteract unavoidable energy impacts of At-Berth regulations.   
          AB 678 is modeled after 
          SB 1204 (Lara), Chapter 524, Statutes of 2014, that created the  








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          California Clean Truck, Bus, and Off-Road Vehicle and Equipment  
          Technology Program to fund development, demonstration, and early  
          commercial deployment of zero- and near-zero-emission truck,  
          bus, and off-road vehicle and equipment technologies.  


          The author notes that while air quality across the state has  
          improved as a result of stricter air quality laws and  
          regulations, many areas in the state continue to experience poor  
          air quality.  In their annual air pollution rankings released  
          this month, the American Lung Association again reported that  
          the Los Angeles Basin has some of the nation's highest ozone and  
          fine particle pollution and, as a result, ranked fourth among  
          metropolitan areas nationwide for short-term spikes in fine  
          particle pollution.  The South Coast Air Quality Management  
          District, in a study released in late 2014, noted specifically  
          that black carbon, formaldehyde, nickel, benzene, arsenic, and  
          dozens of other chemicals are still causing increased cancer  
          risk, around the ports of Los Angeles and Long Beach due  
          primarily to heavy diesel emissions associated with port  
          operations.  The author points out that not only are port  
          operations to blame, the maritime shipping industry itself is  
          responsible for an estimated 3% of GHG emissions worldwide.   He  
          points out that with the significant expected growth of  
          international trade, this percentage is expected to increase by  
          a factor of 2-3 by 2050 if no further action is taken.  


          In December of 2007, ARB approved an early action item aimed at  
          reducing the maritime industry's carbon footprint.  The  
          "Airborne Toxic Control Measure for Auxiliary Diesel Engines  
          Operated on Ocean-Going Vessels At-Berth in a California Port"  
          Regulation, commonly referred to as the At-Berth Regulation,  
          that directed vessels docked at-berth in California ports must  
          use shorepower instead of running their onboard diesel  
          engines-which has been proven to be a  significant source of  
          emissions and contaminants.  Through the use of shorepower, the  
          ship's power load is seamlessly transferred to a dockside power  
          supply without disruption to onboard services, thereby  








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          eliminating the negative side-effects of auxiliary engine  
          combustion when ships are in port.  The regulation specifically  
          requires at least 50% of the vessels docked at-berth to utilize  
          shore power in 2014, eventually reaching 70% in 2017, and 80% by  
          2020.  California's ports have, for the most part, come into  
          compliance with the At-Berth Regulation.  The sponsor reports  
          that not only was the installation of shorepower costly, the  
          result has been that more and more vessels are demanding larger  
          quantities of electrical power.



          There are a number of programs within ARB and the Commission  
          that have been created to help reduce emissions including  
          funding mobile source technology such as on- and off-road  
          equipment, developing and increasing availability of alternative  
          fuels, replacing medium- and heavy-duty equipment with cleaner  
          technology and training the workforce as it relates to the  
          continued use of these cleaner, advanced technologies.  It is  
          understandable, that California's public ports would therefore  
          seek an opportunity to utilize emissions reduction funding,  
          given that ports generate a significant amount of emissions that  
          result in poor air quality in and around the facilities.  
                                                               

          In addition to existing emissions reduction programs, there are  
          a number of bills that have been introduced this year, including  
          AB 678, that, if enacted, would place a substantial demand on  
          limited funding available to support emissions reduction  
          programs. The Legislature will categorically need to prioritize  
          in order to maximize benefits and remain within existing funding  
          limits.  By directing monies to projects on or near California's  
          public ports, as envisioned by AB 678, benefits would include  
          targeting known emissions sources that have substantial impacts  
          on air quality and the quality of life for nearby disadvantaged  
          communities.  Further, expending money for programs on and  
          around California's ports would encourage leveraging of funds  
          which could increase the return on monies invested. 









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          Double referral:  This bill passed out of the Assembly Natural  
          Resources Committee on April 13, 2015, with a 9-0 vote.



          Related legislation:  AB 1074 (C. Garcia) would, among other  
          things, fund the development of an integrated strategy for  
          alternative refueling infrastructure.  AB 1074 passed out of  
          this committee on April 13, 2015, with a 16-0 vote and is  
          awaiting a hearing in the Assembly Appropriations Committee.





          AB 1176 (Perea) would, among other things, establish the  
          Advanced Low-Carbon Diesel Fuels Access Program, administered by  
          ARB to reduce GHG emissions of diesel motor vehicles by  
          providing funding for projects that expand advanced low-carbon  
          diesel fueling infrastructure.  AB 1176 is scheduled to be heard  
          by this committee on April 27, 2015.





          AB 904 (Perea) would establish the Clean Reused Vehicle Rebate  
          Project to provide purchase incentives for clean, used zero- and  
          near-zero emission light-duty vehicles.  AB 904 is scheduled to  
          be heard by this committee on April 27, 2015.




          Previous legislation:  SB 1204 (Lara), Chapter 524, Statutes of  
          2014, created the California Clean Truck, Bus, and Off-Road  
          Vehicle and Equipment Technology Program to fund development,  
          demonstration, and early commercial deployment of zero- and  








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          near-zero-emission truck, bus, and off-road vehicle and  
          equipment technologies from cap-and-trade Greenhouse Gas  
          Reduction Fund.
          AB 1532 (John A. Pérez), Chapter 807, Statutes of 2012, among  
          other things, established the GGRF Investment Plan and  
          Communities Revitalization Act  to set procedures for the  
          investment of GHG allowance auction revenues and authorized a  
          range of GHG reduction investments.



          SB 535 (De Leon), Chapter 830, Statutes of 2012, required the  
          GGRF investment plan to allocate a minimum of 25 percent of the  
          available moneys to projects that provide benefits to identified  
          disadvantaged communities and a minimum of 10% of the available  
          moneys to projects located within identified disadvantaged  
          communities.





          AB 32 (Nunez), Chapter 488, Statutes of 2006, created the  
          California Global Warming Solutions Act of 2006 and required ARB  
          to adopt GHG reduction measures to ensure that statewide  
          emissions are reduced to 1990 levels by 2020.  


          


          REGISTERED SUPPORT / OPPOSITION:




          Support










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          Pacific Marine Shipping Association (sponsor)


          California Infill Builders Federation


          South Coast Air Quality Management District




          Opposition


          None on file




          Analysis Prepared by:Victoria Alvarez / TRANS. / (916) 319-2093