BILL ANALYSIS Ó
AB 1937
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ASSEMBLY THIRD READING
AB
1937 (Gomez and Williams)
As Amended April 25, 2016
Majority vote
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Utilities |10-5 |Gatto, Burke, Eggman, |Patterson, Chávez, |
| | | |Dahle, Hadley, |
| | | |Obernolte |
| | |Cristina Garcia, | |
| | | | |
| | | | |
| | |Eduardo Garcia, | |
| | | | |
| | | | |
| | |Roger Hernández, | |
| | |Quirk, Santiago, | |
| | |Ting, Mark Stone | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Natural |6-2 |Williams, Cristina |Hadley, Harper |
|Resources | |Garcia, Gomez, | |
| | |McCarty, Mark Stone, | |
| | |Wood | |
| | | | |
|----------------+-----+----------------------+--------------------|
AB 1937
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|Appropriations |14-6 |Gonzalez, Bloom, |Bigelow, Patterson, |
| | |Bonilla, Bonta, |Gallagher, Jones, |
| | |Calderon, Daly, |Obernolte, Wagner |
| | |Eggman, Eduardo | |
| | |Garcia, Roger | |
| | |Hernández, Holden, | |
| | |Quirk, Santiago, | |
| | |Weber, Wood | |
| | | | |
| | | | |
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SUMMARY: Modifies procurement requirements for electrical
corporations regulated by the California Public Utilities
Commission (CPUC) to include additional considerations.
Specifically, this bill:
1)Requires investor-owned electrical utilities (IOUs) to:
a) 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.
b) 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. Requires the CPUC
to require the IOU demonstrate fulfillment of this
provision prior to approving a contract for any new or
repowered gas-fired generation resources.
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FISCAL EFFECT: According to the Assembly Appropriations
Committee, state costs are absorbable within existing CPUC
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 CPUC
and the CPUC is required to review and accept, modify or
reject the proposed plan based on specific requirements.
On February 13, 2013, the CPUC 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 CPUC 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
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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.
The CPUC 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 CPUC 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
Assembly 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:
Sue Kateley / U. & C. / (916) 319-2083 FN:
0003022
AB 1937
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