BILL ANALYSIS Ó
SENATE COMMITTEE ON ENERGY, UTILITIES AND COMMUNICATIONS
Senator Ben Hueso, Chair
2015 - 2016 Regular
Bill No: AB 2798 Hearing Date: 6/13/2016
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|Author: |Gatto |
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|Version: |2/19/2016 As Introduced |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Jay Dickenson |
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SUBJECT: Energy conservation: power facility and site
certification: notice of intention
DIGEST: This bill expands the types of information a person
proposing to build a thermal powerplant must provide to the
California Energy Commission (CEC) to newly include 1) the
sources of the fuels to be used and 2) the extent to which the
facility will increase or decrease reliance on underground
natural gas storage.
ANALYSIS:
Existing law:
1)Defines a "thermal powerplant" as any stationary or floating
electrical generating facility using any source of thermal
energy, with a generating capacity of 50 megawatts (MW) or
more. (Public Resources Code §25120)
2)Provides CEC with exclusive power to certify all thermal
powerplant sites and related facilities in the state. (Public
Resources Code §25500 et seq.)
3)Requires each person proposing to construct a thermal
powerplant or electric transmission line on a site shall to
CEC a notice of intention (NOI) to file an application for the
certification of the site and related facility or facilities.
(Public Resources Code §25502)
4)Requires each NOI to include a statement by the applicant
describing the location of the proposed sites, which includes,
AB 2798 (Gatto) Page 2 of ?
among other things, a description of the type or types of
fuels to be used. (Public Resources Code §25504)
5)Requires CEC, in reviewing an NOI, to review specified factors
related to safety and reliability, including handling and
storage of wastes and fuels. (Public Resources Code §25511)
6)Prohibits the construction of a thermal powerplant or electric
transmission line without certification from CEC, which serves
as the lead permitting agency, and authorizes CEC to require
the applicant for certification to submit any information,
document, or data, it determines is reasonably necessary to
make any decision on the application. (Public Resources Code
§§25517 and 25519).
7)Requires an application for certification to include, among
other things, safety and reliability information, a
description of the fuel to be used by the facility and the
source of fuel, as well as the information required in Public
Resources Code §25511. (Public Resources Code §25520)
8)Exempts from the requirement to file and NOI with CEC several
types of powerplants, including a natural-gas-fired thermal
powerplant. (Public Resources Code §25540.6)
This bill requires the NOI for a proposed thermal powerplant or
electric transmission line to include information on the sources
of the fuels to be used and the extent to which the facility
will increase or decrease reliance on underground natural gas
storage, in addition to the other information already required
by statute.
Background
CEC has exclusive authority to certify large, thermal
powerplants and related facilities. Statute provides CEC with
the exclusive authority to certify large, thermal powerplants,
which statute defines as those using any source of thermal
energy, with a generating capacity of 50 MW or more. This means
the CEC is the state's lead agency for certifying the
construction and operation of large, thermal powerplants.
Statute prohibits the construction of a thermal powerplant or
electric transmission line without site certification from CEC.
A person proposing to construct a large thermal powerplant or
AB 2798 (Gatto) Page 3 of ?
transmission line must file with CEC and NOI to file an
application for the certification of the site and related
facility or facilities. Statute describes the NOI as an attempt
primarily to determine the suitability of the proposed sites to
accommodate the facilities and to determine the general
conformity of the proposed sites and related facilities with
standards of the CEC and assessments of need. The NOI must
include a large variety of prescribed information including a
description of the type or types of fuels to be used by the
facility, as well as any other information CEC deems relevant.
It is this requirement the author seeks to modify by
additionally requiring the NOI to include information on the
sources of the fuels to be used and the extent to which the
facility will increase or decrease reliance on underground
natural gas storage.
The author is motivated by concern over continued of increasing
reliance on large, natural gas storage facilities, such as the
Aliso Canyon Storage Facility, owned and operated by Southern
California Gas and that leaked so spectacularly this past
winter. The author contends it is in the public's interest that
CEC consider the implications for natural gas storage when
reviewing a proposed thermal powerplant's NOI. However, this
bill twice misses its mark.
First, the bill modifies the section of code - Public Resources
Code §25504 - that requires an NOI to include fuel-specific
information. As the author describes, that section does not
require a person proposing to construct a large thermal
powerplant to include in the NOI information regarding the
sources of the fuels to be used and the extent to which the
facility will increase or decrease reliance on underground
natural gas storage. However, as subsequent code section -
Public Resources Code §25511 - requires the NOI to include
safety and reliability information, including information on the
handling and storage of wastes and fuels. The CEC confirms that
it interprets Section 25511 to require it to assess the extent
to which a proposed facility will increase or decrease reliance
on underground natural gas storage. Thus, statute already
requires much of the substance of what the author seeks to
achieve in this bill.
Moreover, statutory requirements detailing the types of
information to be included in an NOI are mostly irrelevant to
CEC's certification process. This is because statute (Public
Resources Code §25540.6) exempts natural-gas fired thermal
AB 2798 (Gatto) Page 4 of ?
powerplants from the requirement to file and NOI with CEC.
This is not to say that statutory requirements regarding NOIs
have no effect on CEC's thermal powerplant certification
process. Existing law (Public Resources Code §25520) requires
an application for certification to include, among other things,
safety and reliability information, including a description of
the fuel to be used by the facility and the source of fuel, as
well as the information required in Public Resources Code
§25511. Therefore, if the author nonetheless believes there is
still value in more explicitly requiring CEC to consider the
extent to which a proposed facility will increase or decrease
reliance on underground natural gas storage, he may wish to
amend the bill to remove the requirement from Public Resources
Code §25504 instead to place it in Public Resources Code §25511,
as follows:
Public Resources Code §25504
The notice of intention shall include a statement by the
applicant describing the location of the proposed sites by
section or sections, range and township, and county; a
summary of the proposed design criteria of the facilities;
the type or types of fuels to be used; the sources of the
fuels to be used; the extent to which the facility will
increase or decrease reliance on underground natural gas
storage ; the methods of construction and operation; the
proposed location of facilities and structures on each
site; a preliminary statement of the relative economic,
technological, and environmental advantages and
disadvantages of the alternative site and related facility
proposals; a statement of need for the facility and
information showing the compatibility of the proposals with
the most recent electricity report issued pursuant to
Section 25308; and any other information that an electric
utility deems desirable to submit to the commission.
Public Resources Code §25511
The commission shall review the factors related to safety
and reliability of the facilities at each of the
alternative sites designated in the notice. In addition to
other information requested of the applicant, the
commission shall, in determining the appropriateness of
sites and related facilities, require detailed information
on proposed emergency systems and safety precautions, plans
for transport, handling and storage of wastes and fuels,
AB 2798 (Gatto) Page 5 of ?
the extent to which the facility will increase or decrease
reliance on underground natural gas storage, proposed
methods to prevent illegal diversion of nuclear fuels,
special design features to account for seismic and other
potential hazards, proposed methods to control density of
population in areas surrounding nuclear powerplants, and
such other information as the commission may determine to
be relevant to the reliability and safety of the facility
at the proposed sites. The commission shall analyze the
information provided by the applicant, supplementing it,
where necessary, by onsite investigations and other
studies. The commission shall determine the adequacy of
measures proposed by the applicant to protect public health
and safety, and shall include its findings in the final
report required by Section 25514.
Prior/Related Legislation
SB 380 (Pavley, Chapter 14, Statutes of 2016) places a
moratorium on injecting natural gas into the Aliso Canyon gas
storage facility and establishes requirements for resuming
natural gas injections at the facility.
AB 1903 (Wilk, 2016) requires the CPUC to authorize a study of
the long-term health impacts associated with the natural gas
leak from the Aliso Canyon facility (facility), to be conducted
by the Office of Environmental Health Hazard Assessment (OEHHA).
The bill passed the Assembly 40-0 and is pending consideration
by this committee.
SB 888 (Allen, 2016) establishes the California Office of
Emergency Services (Cal OES) as the lead agency for emergency
response to a large ongoing leak or release of natural gas and
associated gases from a natural gas storage facility that poses
a significant present or potential hazard to the public health
and safety, property, or to the environment. The bill passed
the Senate 28-10 and is pending referral in the Assembly.
FISCAL EFFECT: Appropriation: No Fiscal
Com.: Yes Local: No
SUPPORT:
None received
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OPPOSITION:
None received
ARGUMENTS IN SUPPORT: According to the author:
This bill will help the CEC determine whether or not there are
sufficient quantities of natural gas storage capacity available
to warrant the construction of the proposed power facility, and
whether additional storage capacity is needed. This information
would assist in determining whether additional pipeline capacity
is necessary as well.
Further, if utilities are required to show the CEC how proposed
power facilities may increase reliance on natural gas, there may
be a reluctance to permit power facilitates not necessary to
meet demand. This would prevent the shifting of construction and
operational costs onto consumers.
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