BILL ANALYSIS Ó
SENATE COMMITTEE ON ENERGY, UTILITIES AND COMMUNICATIONS
Senator Ben Hueso, Chair
2015 - 2016 Regular
Bill No: AB 678 Hearing Date: 6/30/2015
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|Author: |O'Donnell |
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|Version: |6/22/2015 As Amended |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Nidia Bautista |
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SUBJECT: Greenhouse gases: Energy Efficient Ports Program
DIGEST: This bill would require the California Air Resources
Board (ARB), in conjunction with the California Energy
Commission (CEC), to develop and implement the Energy Efficiency
Ports Program to fund, if appropriated, energy efficiency
upgrades and emissions reduction investments at California's
public seaports.
ANALYSIS:
Existing law:
1)Requires the ARB, pursuant to the California Global Warming
Solutions Act of 2006, to adopt rules and regulations that
would reduce greenhouse gas (GHG) emissions in the state to
1990 levels by 2020. (Health and Safety Code §§38500 to
38599)
2)Establishes the Greenhouse Gas Reduction Fund (GGRF), and
requires all moneys collected by the ARB from the auction or
sales of allowances, pursuant to a market-based compliance
mechanism, be deposited in the fund and made available for
appropriation. (Government Code §16428.8)
3)Establishes the GGRF Investment Plan and Communities
Revitalization Act to set procedures for the investment of
regulatory fee revenues derived from the auction of GHG
allowances. (Health and Safety Code §§39710 to 39720)
4)Requires the GGRF Investment Plan to allocate: (a) at least
AB 678 (O'Donnell) Page 2 of ?
25% of the available moneys in the fund to projects that
provide benefits to disadvantaged communities, and (b) at
least 10% of moneys in the fund to projects located within
disadvantaged communities. (Health and Safety Code §§39711 to
39723)
This bill:
1)Requires ARB, in conjunction with the CEC, to develop and
implement the Energy Efficient Ports Program to fund energy
efficiency upgrades and investments at public ports.
2)Establishes that eligible projects include, but are not
limited to:
a. Installation of renewable energy at marine port
facilities.
b. Lighting retrofits.
c. Cold-ironing, allowing ships to plug into
electricity while docked.
d. Emissions control technologies on ships and other
vessels.
e. Near-zero and zero-emission vehicles and
infrastructure, including fuel cells, energy storage and
batteries, and electric trucks.
f. Other projects that reduce grid-based energy demand.
3)Requires ARB, in consultation with CEC, to develop guidelines
for the program.
4)Authorizes ARB to expend moneys it receives from an
appropriation from the fund for the purposes of the bill.
Background
While air quality across the state has improved as a result of
more health-protective air quality laws and regulations, many
areas in the state continue to experience poor air quality. In
their annual air pollution rankings released earlier this year,
the American Lung Association again reported that the Los
Angeles Basin has some of the nation's highest ozone (smog) and
fine particle (soot) pollution and, as a result, ranked fourth
among metropolitan areas nationwide for short-term spikes in
AB 678 (O'Donnell) Page 3 of ?
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, including the low-grade crude fuel used by cargo
ships. The maritime shipping industry itself is responsible for
an estimated 3% of GHG emissions worldwide.
Clean air regulations. The ARB has adopted several regulations
to reduce emissions from port and related operations, including
Statewide Diesel Truck and Bus Rule, regulations on
cargo-handling equipment and, most notably for this bill, the
At-berth Regulations for ships at California ports. The
Regulations are being implemented in stages and began in 2010.
ARB required that 50% of visits by container and passenger ships
be powered by on-shore power, or that ship operators
alternatively reduce 50% of emissions associated with their
ships at-berth by 2014. Ultimately these percentages will be
increased to 80% by 2020. Previously, ships visiting ports
would power themselves with on-board diesel generators, which
are a significant cause of air pollutants in port and harbor
districts. The ARB regulations are intended to improve the air
quality of these ports, but in doing so will increase demand for
electricity power from the local electric utility. California's
ports have, for the most part, come into compliance with the
At-Berth Regulation.
The ARB identifies three types of incentives for compliance with
the at-berth regulations:
1. Emission credits that can be accumulated and used by
fleets complying with the equivalent emissions reduction
option;
2. Proposition 1B (2006) funding available to reduce
emissions from goods-movement activities; and
3. Carl Moyer funding available to reduce emissions of
diesel emissions.
The author and committee may wish to amend the bill to rename
the program to better reflect its diverse strategies which are
not exclusively related to energy efficiency, but address
emissions reductions strategies more broadly.
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The author and committee may wish to amend the bill to require
ports to adopt energy plans, in consultation with their
respective electric utility, prior to receiving funding from
this program for energy-related activities. The energy plans
should adhere to the State's energy loading order and require
benchmarking for energy retrofit projects, as well as, reporting
of measurable energy savings.
Better in the budget. While this bill establishes a program by
which ARB is to provide funding for port facilities, the bill
makes no appropriation of funds. Such an appropriation, should
one occur, will likely result from the budget process. In
addition, the Legislature may attach control language to any
such appropriation, which would govern uses of the money and its
administration. The Legislature has deferred action on
appropriations from the GGRF for this budget cycle and will
likely take action on such appropriations later this summer.
The committee may wish to defer action on this bill in deference
to the budget process.
Double Referral. Should this bill be approved by this
committee, it will be re-referred to the Senate Committee on
Environmental Quality for its consideration.
Prior/Related Legislation
AB 1074 (C. Garcia, 2015) among other things, funds the
development of an integrated strategy for alternative refueling
infrastructure. AB 1074 was held in the Assembly Committee on
Appropriations.
AB 1176 (Perea, 2015) among other things, establishes 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
in the Senate Committee on Transportation and Housing on June
30, 2015.
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 near-zero-emission truck,
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bus, and off-road vehicle and equipment technologies from
cap-and-trade Greenhouse Gas Reduction Fund.
AB 628 (Gorrell, Chapter 741, Statutes of 2013) created a
framework for the development of energy management plans between
specified port and harbor districts and investor-owned
utilities, publicly-owned utilities and Community Choice
Aggregators, as defined, in order to reduce air emissions and
promote economic development of the district.
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 León, 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 (Nuñez/Pavley, 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.
FISCAL EFFECT: Appropriation: No Fiscal
Com.: Yes Local: No
ASSEMBLY VOTES:
Assembly Floor (77-0)
Assembly Appropriations Committee (17-0)
Assembly Transportation Committee (16-0)
Assembly Natural Resources Committee (9-0)
SUPPORT:
Pacific Merchant Shipping Association (source)
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California Infill Builders Federation
Maersk Line
Port of Los Angeles
South Coast Air Quality Management District
OPPOSITION:
None received
ARGUMENTS IN SUPPORT: The author states: "California ports
have especially invested in shore-power infrastructure,
compliant with the At-Berth Regulation, to reduce the negative
impacts associated with port operations. The Port of Long Beach
is nearing completion of more than $185 million worth of
dockside power hookups, while the Port of Oakland is undertaking
a cost of $85 million for their shore power infrastructure.
Shore power enables ships at-berth to literally plug into a
port's electrical grid system so essential functions can
continue while the ship's engines are shut down. As a result,
90% or more of SOx, NOx, CO2 and particle emissions can be cut.
Shore power infrastructure, however, is not cheap. Both ships
and ports need switchboards, various breakers and disconnectors,
transformers, appropriate communication links, very large cables
necessary for connection, and many other pieces of equipment to
install energy efficient upgrades. Because shore-power is not
required across the country, these substantial costs have placed
California ports at a competitive disadvantage. Ports and their
private sector partners have actually lost cargo due to the high
costs associated with energy efficiency upgrades, and therefore
lack the revenue needed to invest in the infrastructure
necessary for future energy demands."
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