BILL ANALYSIS Ó
AB 1989
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Date of Hearing: March 29, 2016
ASSEMBLY COMMITTEE ON WATER, PARKS, AND WILDLIFE
Marc Levine, Chair
AB 1989
(Jones) - As Introduced March 14, 2016
SUBJECT: Drought: water supply
SUMMARY: Requires the State Water Resources Control Board in
coordination with the State Energy Resources and Conservation
and Development Commission, the Public Utilities Commission, and
the Department of Water Resources, to develop and implement a
grant and low interest loan program to reduce water-related
greenhouse gas (GHG) emissions. Specifically, this bill:
1)Continuously and annually appropriates $200 million from the
greenhouse gas reduction fund (GGRF) to implement the grant
and low-interest loan program.
2)Finds and declares that water and energy are connected.
California's water system accounts for 20 percent of total
electricity usage and 30 percent of nonpower-related natural
gas use. Saving water saves energy and potentially reduces
emissions. There are opportunities to reduce water-related
greenhouse gas emissions.
3)Includes but does not limit projects eligible for grant and
low interest loan funding to be: local water recycling,
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stormwater capture, groundwater cleanup, seawater and brackish
water desalination, and water conservation. Additionally
includes efficient irrigation, water and wastewater plant
clean energy, energy-efficient water pumps, pipe leak
detection and repair, appliance water efficiency project to be
funded through the grant and low interest loan program.
4)Requires projects to reduce water-related greenhouse gas
emissions to be eligible.
5)Requires any public funds made available for the program to
private water companies regulated by the Public Utilities
Commission be used for the benefit of rate payers or the
public.
6)Authorizes the State Water Resources Control Board to adopt
guidelines and regulations necessary to implement the bill.
EXISTING LAW:
1)Requires the California Air Resources Board to adopt GHG
emissions reduction measures to achieve a reduction in
statewide GHG emissions to the 1990 level.
2)Requires the California Air Resources Board to prepare and
approve a Scoping Plan, on or before January 1, 2009, and once
every five years thereafter, for achieving the maximum
technologically feasible and cost-effective reductions in GHG
emissions from sources of emissions by 2020.
3)Establishes the GGRF in the State Treasury; requires all
funds, except for fines and penalties, collected pursuant to a
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market-based mechanism be deposited in the GGRF; and, requires
the Department of Finance, in consultation with the California
Air Resources Board and any other relevant state agency, to
develop a three-year investment plan for the GGRF.
4)Requires that the GGRF be used to facilitate GHG emissions
reductions in this state. Requires that annual budget
appropriations from the GGRF be consistent with the investment
plan.
5)Establishes the policy of the state and the intent of the
Legislature to promote all feasible means of energy and water
conservation and all feasible uses of alternative energy and
water supply sources.
6)Finds and declares that waste or unreasonable use of water
imposes unnecessary and wasteful consumption of energy to
deliver or furnish the water, and it is necessary, therefore,
to determine the quantities of water in use throughout the
state to the maximum extent that it is reasonable to do so in
order to reduce energy consumption.
FISCAL EFFECT: Unknow, but the bill appropriates $200 million
annually and continuously out of GGRF money.
COMMENTS: Implements a grant and low interest loan program to
reduce water-related GHG emissions.
1)Author's statement: California's AB 32 cap-and-trade program
is important in the state's effort to reduce overall GHG
emissions. Water and energy resources are connected. The
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pumping and movement of water accounts for 20 percent of the
total electricity usage and 30 percent of non-power related
natural gas consumed in the state. Since the production of
energy results in GHG emissions there is an opportunity for
the state to kill two birds with one stone through projects
that conserve water and at the same time reduce GHG.
2)Background:
Water and energy use. According to the State Energy Resources
and Conservation and Development Commission, water-related
energy use in California consumes approximately 20% of the
state's electricity and 30% of the state's non-power plant
natural gas (natural gas not used to produce electricity).
The water sector uses electricity to pump, treat, transport,
deliver, and heat water. The State Energy Resources and
Conservation and Development Commission also found that the
most energy-intensive uses of water in California are
associated with end uses by the customer (e.g., heating,
processing, and pressurizing water), and 75% of the
electricity and nearly all of the natural gas use related to
water in California is associated with water heating.
Additionally, expected increases in groundwater pumping, water
treatment, and water recycling due to drought conditions in
the state, mean the energy intensity of water will likely
increase.
Executive Order. Executive Order B-29-15 of April 2015,
directed state agencies to perform various actions regarding
saving water to respond to severe drought conditions in the
state, including directing the State Energy Resources and
Conservation and Development Commission, jointly with
Department of Water Resources, to implement a Water Energy
Technology program to deploy innovative water management
technologies that achieve water and energy savings and GHG
emissions reductions. The Executive Order also directed the
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State Energy Resources and Conservation and Development
Commission, jointly with Department of Water Resources, to
implement a limited statewide appliance rebate program for
inefficient appliances.
Funding for water and GHG emissions. Emergency drought relief
legislation, SB 103 (Budget Committee, Chapter 2, Statutes of
2014) appropriated $10 million to the California Department of
Food and Agriculture for water and energy efficiency projects
in the agricultural sector, and $30 million to the Department
of Water Resources to implement a grant program to support
local water-use efficiency projects and energy efficiency
projects at State Water Project facilities.
The 2014-15 Budget agreement specifies how the state will
allocate most cap-and-trade auction revenues in 2015-16 and
beyond. For all future revenues, the legislation appropriates
25% for the state's high-speed rail project, 20% for
affordable housing and sustainable communities grants, 10% to
intercity capital rail projects, and 5% for low-carbon transit
operations. The remaining 40% is available for annual
appropriation by the Legislature.
Of that 40% available for annual appropriation, the Governor's
proposed 2016-17 cap-and-trade expenditures would appropriate
$30 million to the Department of Water Resources and the
California Department of Food and Agriculture for water and
energy efficiency projects, $60 million to the State Energy
Resources and Conservation and Development Commission and the
Department of Water Resources for rebates to replace
inefficient appliances, and the Water and Energy Technology
Program, as described in the Executive Order.
Drought funding. In response to California's ongoing drought,
AB 91 (Budget Committee), Chapter 1, Statutes of 2015
allocated just over $1 billion for drought-related activities.
Among other things, the bill:
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a) Accelerates a $131.7 million appropriation to the State
Water Resources Control Board to fund water recycling
projects, including feasibility studies, demonstration
projects, and larger scale water recycling projects.
b) Accelerates a $20 million appropriation from the GGRF to
the Department of Water Resources for state and local water
use efficiency programs that reduce GHG emissions.
c) Appropriates $10 million from the GGRF to the California
Department of Food and Agriculture for agricultural water
efficiency projects that reduce GHG emissions.
Suggested Committee Amendments: Assembly policy committees
have not made it a practice to move bills through policy
committee that make single purpose GGRF appropriations.
The committee may wish to remove the continuous and annual
$200 million appropriation that is currently in the bill.
3)Prior and Related Legislation:
a) AB 32 (Núñez, Pavely) Chapter 488, Statues of 2006,
establishes the requirement to reduce GHG emissions and put
in place the mechanism to achieve that requirement
b) SB 471 (Pavely) 2015, held in Assembly Appropriations
was very similar to this bill, but did make a GGRF
appropriation.
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c) SB 551 (Wolk) 2015, held in Assembly Appropriations
would have established a state policy recognizing and
addressing the nexus between water and energy.
REGISTERED SUPPORT / OPPOSITION:
Support
None on File
Opposition
None on File
Analysis Prepared by:Ryan Ojakian / W., P., & W. / (916)
319-2096
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