BILL ANALYSIS Ó
AB 1989
Page 1
Date of Hearing: May 11, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
1989 (Jones) - As Amended March 30, 2016
-----------------------------------------------------------------
|Policy |Water, Parks and Wildlife |Vote:|14 - 0 |
|Committee: | | | |
| | | | |
| | | | |
|-------------+-------------------------------+-----+-------------|
| | | | |
| | | | |
| | | | |
|-------------+-------------------------------+-----+-------------|
| | | | |
| | | | |
| | | | |
-----------------------------------------------------------------
Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill requires the State Water Resources Control Board
(SWRCB) to develop and implement a low-interest loan and grant
program for water projects that reduce water-related greenhouse
gas (GHG) emissions in coordination with the Department of Water
AB 1989
Page 2
Resources (DWR), the California Energy Commission (CEC) and the
California Public Utilities Commission (PUC).
This bill exempts guidelines adopted to implement the program
from the Administrative Procedures Act (APA).
FISCAL EFFECT:
1) Cost pressures, likely in the $100 million range or more
to fund the loan and grant program (Greenhouse Gas
Reduction Funds, GF or other special fund.)
2) Initial increased costs of $150,000 to $300,000 for
SWRCB to develop the program. Ongoing administrative costs
of approximately $500,000 for every $10 million made
available to the loan and grant program (Greenhouse Gas
Reduction Funds, GF or other special fund.)
3) Absorbable DWR costs, however, DWR has spent about $1
million in the development and awarding of grants through
the Water/Energy Technology program. This bill does not
add new costs, but may be duplicative of DWR's effort.
4) Unknown potential cost increases for CEC depending on
the level of participation in the loan and grant program.
5) Absorbable PUC costs.
6) Increased costs of for ARB to develop new quantification
methods for water-energy activities to determine GHG
reductions and co-benefits (Greenhouse Gas Reduction Funds
AB 1989
Page 3
or other special fund.) and analyze individual projects.
COMMENTS:
1)Purpose. According to the author, 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. According to the CEC, 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 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, will likely increase the energy intensity of water
.
3)Governor's Proposals. Executive Order B-29-15 of April 2015,
directed state agencies to perform various actions to respond
to severe drought conditions in the state, including directing
the CEC and DWR to implement a Water/Energy Technology program
to deploy technologies that achieve water and energy savings
and GHG emissions reductions.
Emergency drought relief legislation, SB 103 (Budget
Committee, Chapter 2, Statutes of 2014) appropriated $10
million to the California Department of Food and Agriculture
AB 1989
Page 4
(CDFA) (for water and energy efficiency projects in the
agricultural sector, and $30 million to the DWR to implement a
grant program to support local water-use efficiency projects
and energy efficiency projects at State Water Project
facilities.
The Governor's proposed 2016-17 budget includes $30 million in
from AB 32 cap-and-trade revenues for DWR and CDFA to continue
water and energy efficiency projects.
Analysis Prepared by:Jennifer Galehouse / APPR. / (916)
319-2081