BILL ANALYSIS                                                                                                                                                                                                    Ó






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          |SENATE RULES COMMITTEE            |                       AB 2798|
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                                   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  








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            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.  







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          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  







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          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


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