BILL ANALYSIS Ó
AB 1937
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Date of Hearing: May 18, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
1937 (Gomez) - As Amended April 25, 2016
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|Policy |Utilities and Commerce |Vote:|10 - 5 |
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| |Natural Resources | |6 - 2 |
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Urgency: No State Mandated Local Program: YesReimbursable:
No
SUMMARY:
This bill modifies procurement requirements for electrical
corporations regulated by the California Public Utilities
Commission (PUC) to include additional considerations.
Specifically this bill requires investor-owned electrical
utilities (IOUs) to:
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1)Actively seek bids, and provide greater priority, to resources
that are not gas-fired generation resources located in or
adjacent to communities that suffer from cumulative pollution
burdens and other environmental impacts, including high
emission levels of toxic air contaminants, criteria air
pollutants, and greenhouse gases.
2)Undertake all feasible efforts to meet any identified resource
need through available renewable energy, energy storage,
energy efficiency, and demand reductions that are cost
effective, reliable, and feasible. This bill requires the PUC
to require the IOU demonstrate fulfillment of this provision
prior to approving a contract for any new or repowered
gas-fired generation resources.
FISCAL EFFECT:
State costs are absorbable within existing PUC resources.
COMMENTS:
1)Purpose. According to the author, it is imperative that when
utilities solicit and procure large-scale, polluting gas-fired
power plants, they prioritize resources that are not located
near communities that have disproportionately borne the brunt
of poverty and environmental pollution for decades. This bill
requires utilities to consider other ways of meeting resource
needs prior to moving forward with a gas-fired power plant.
2)Background. Under existing law, each electrical corporation
is required to file a proposed procurement plan with the PUC
and the PUC is required to review and accept, modify or reject
the proposed plan based on specific requirements.
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On February 13, 2013, the PUC ordered Southern California
Edison (SCE) to procure, a minimum of 215 megawatts (MW) and a
maximum of 290 MW of electrical capacity in the Moorpark
sub-area of the Big Creek/Ventura local reliability area
(Moorpark sub-area) to meet identified long-term local
capacity requirements (LCR) by 2021. The PUC found this LCR
need existed, in large part, due to the expected retirement of
the Ormond Beach and Mandalay once-through-cooling generation
facilities, which are both located in Oxnard, California.
These facilities currently have approximately 2000 MW of
capacity.
On November 26, 2014, SCE filed an application seeking
approval for 11 contracts. One of the contracts is a 20-year
contract for gas-fired generation (totaling 262 MW of
capacity) with NRG Energy Center Oxnard, LLC (NRG) for a new
simple cycle peaking facility known as the Puente Power
Project (NRG Puente Project).
Environmental justice matters were raised in the proceeding in
connection with the NRG Puente Project. One argument focuses
on NRG's proposed use of a brownfield site for the NRG Puente
Project. A second environmental justice argument raised in
the proceeding focuses on the community surrounding the site.
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The PUC concluded in its alternate decision that the
California Energy Commission (CEC) has jurisdiction to review
environmental issues, including environmental justice. In its
discussion on the decision the PUC pointed out that CEC has
clear jurisdiction to review the environmental impact of the
NRG Puente Project. However, many argue that once the
procurement decision is made, it predetermines the universe
upon which CEC analyzes the environmental impact. This bill
adds this consideration to the procurement process.
3)Continuing Discussions. This bill was amended by both the
Utilities and Commerce and Natural Resources Committees. Some
of the language in this bill is inconsistent. The author is
working with stakeholders to better specify the community area
of concern, differentiate between procurement priorities and
preferences, and better delineate the environmental impacts
from which communities are burdened, for procurement
considerations.
Analysis Prepared by:Jennifer Galehouse / APPR. / (916)
319-2081
AB 1937
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