BILL ANALYSIS Ó
AB 678
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Date of Hearing: May 13, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
AB
678 (O'Donnell) - As Amended April 21, 2015
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| |Transportation | |16 - 0 |
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY: This bill requires the Air Resources Board (ARB), in
conjunction with the California Energy Commission (CEC), to
develop the Energy Efficient Ports Program (EEPP) to fund energy
efficiency upgrades and investments at public ports.
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Specifically, this bill:
1)Requires ARB, in conjunction with the CEC, 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 are not limited to:
a) Installation of solar technologies at marine
terminals, warehouses, and other freight facilities.
b) Replacement of conventional lighting with
light emitting 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.
e) Projects that reduce grid-based energy demand.
3)Requires ARB, in consultation with the CEC, to develop
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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)Authorizes funds from the Greenhouse Gas Reduction Fund
(GGRF), upon appropriation by the Legislature, to be used for
the EEPP.
FISCAL EFFECT:
1)Unknown cost pressures, likely in the tens of millions of
dollars, on the GGRF to fund the EEPP.
2)Increased costs to ARB of approximately $1.5 million (GGRF) to
develop and implement the program and calculate GHG benefits.
3)Increased costs, likely in the $150,000 range (GGRF) for CEC
to provide consultation.
COMMENTS:
1)Purpose. According to the author and the sponsor, the Pacific
Merchant Shipping Association, 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. However, the
port's energy demands have grown substantially and there are a
number remaining emissions reduction improvements that still
need to be made to help reduce port-generated emissions.
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This bill establishes a program to help California ports
reduce power demands, operating costs, and overhead and
counteract the electricity impacts of At-Berth regulations.
2)At-Berth Regulation. In December of 2007, ARB approved an
early action item aimed towards 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, directs vessels docked
at-berth in California ports to use shore power instead of
running their onboard diesel engines. The ship's power load is
seamlessly transferred to a shore side power supply without
disruption to onboard services, eliminating the negative
side-effects of auxiliary engine combustion. The regulation
specifically requires at least 50 percent of the vessels
docked at-berth to utilize shore power in 2014, eventually
reaching 70 percent in 2017, and 80 percent by 2020. As a
result, more and more vessels are demanding larger quantities
of electrical power.
3)AB 32 Cap and Trade Revenues. The California Global Warming
Solutions Act of 2006 (AB 32) requires ARB to adopt: a)
statewide GHG emissions limit equivalent to 1990 levels by
2020; and b) regulations, including market-based compliance
mechanisms, to achieve maximum technologically feasible and
cost-effective GHG emission reductions.
As part of the implementation of AB 32 market-based compliance
measures, ARB adopted a cap-and-trade program that caps the
allowable statewide emissions and provides for the auctioning
of emission credits, the proceeds of which are quarterly
deposited into the GGRF available for appropriation by the
Legislature.
The 2014-15 Budget Act allocates cap-and-trade revenues for
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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% 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 and
renewable energy, and natural resources and waste diversion.
Analysis Prepared by:Jennifer Galehouse / APPR. / (916)
319-2081