BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 2798| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 2798 Author: Gatto (D) Amended: 6/20/16 in Senate Vote: 21 SENATE ENERGY, U. & C. COMMITTEE: 10-1, 6/13/16 AYES: Hueso, Cannella, Gaines, Hertzberg, Hill, Lara, Leyva, McGuire, Pavley, Wolk NOES: Morrell SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8 ASSEMBLY FLOOR: 78-0, 5/12/16 (Consent) - See last page for vote SUBJECT: Energy conservation: power facility and site certification: notice of intention SOURCE: Author DIGEST: This bill specifies that the California Energy Commission (CEC), when reviewing factors related to safety and reliability of a proposed electricity generating facility, is to consider 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 AB 2798 Page 2 energy, with a generating capacity of 50 megawatts (MW) or more. (Public Resources Code §25120) 2)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) 3)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) 4)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) 5)Provides CEC with exclusive power to certify all thermal powerplant sites and related facilities in the state. (Public Resources Code §25500 et seq.) 6)Requires an application to CEC for certification of a thermal powerplant 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 Section 25511. (Public Resources Code §25520) This bill specifies that the CEC, when reviewing factors related to safety and reliability of proposed electricity generating facility as part of the thermal powerplant certification process, is to consider the extent to which the facility will increase or decrease reliance on underground natural gas storage. 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. AB 2798 Page 3 Statute prohibits the construction of a thermal powerplant or electric transmission line without site certification from CEC. 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 Section 25511. The CEC asserts 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. However, statute does not explicitly require CEC to do so. The author is motivated by concern over continued and 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 there is 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. This bill makes such a requirement. Prior/Related Legislation 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, to be conducted by the Office of Environmental Health Hazard Assessment. The bill passed the Assembly 40-0 and is being considered by the Senate Committee on Appropriations. SB 888 (Allen, 2016) establishes the California Office of Emergency Services 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 being considered by the Assembly Committee on Appropriations. SB 380 (Pavley, Chapter 14, Statutes of 2016) placed a moratorium on injecting natural gas into the Aliso Canyon gas storage facility and establishes requirements for resuming AB 2798 Page 4 natural gas injections at the facility. FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: No SUPPORT: (Verified8/1/16) None received OPPOSITION: (Verified8/1/16) 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. ASSEMBLY FLOOR: 78-0, 5/12/16 AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, AB 2798 Page 5 Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon NO VOTE RECORDED: Burke, Jones-Sawyer Prepared by:Jay Dickenson / E., U., & C. / (916) 651-4107 8/3/16 19:40:18 **** END ****