BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 180 (Jackson) - Electricity: emissions of greenhouse gases
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|Version: May 5, 2015 |Policy Vote: E., U., & C. 8 - |
| | 3, E.Q. 5 - 2 |
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|Urgency: No |Mandate: Yes |
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|Hearing Date: May 18, 2015 |Consultant: Marie Liu |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: SB 180 would direct the California Public Utilities
Commission (CPUC) and the California Energy Commission (CEC) to
develop greenhouse gas (GHG) emission performance standards
(EPS) for nonpeaking and peaking electricity generation for
load-serving entities and local publicly-owned utilities (POUs),
respectively.
Fiscal
Impact:
Ongoing annual costs of $300,000 to $450,000 from the Energy
Resources Program Account (General Fund) for additional
responsibilities by the CEC in regards to EPSs for generation
purchased by POUs
Unknown ongoing costs, potentially in the mid-hundreds of
thousands of dollars, from the Energy Resources Program
Account (General Fund) to permit carbon capture and storage
projects associated with a generation facility.
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Ongoing annual costs of $280,000 to the Public Utilities
Reimbursement Account (special) for the CPUC to calculate and
enforce the new EPS for load-serving entities and the review
of GHG emissions from biomass facilities.
One-time costs of $250,000 from the Public Utilities
Reimbursement Account (special) for the CPUC to contract out
modeling of reliability impacts of EPS standards.
Background: Existing law requires a load-serving entity- an investor-owned
utility (IOU), electric service provider (ESP) and community
choice aggregator (CCA) - or a local publicly-owned utility
(POU) from entering into a long-term financial commitment for
baseload electricity generation unless that generation complies
with a GHG EPS.
The CPUC and the CEC are required to establish the standards, in
consultation with each other and the Air Resources Board (ARB),
for the load-serving entities and POUs, respectively. The
standard may be no higher than the rate of GHG emissions for
combined-cycle natural gas baseload generation. The standards
for load-serving entities and POUs shall be consistent.
"Baseload generation" is electricity generation from a power
plant that is designed and intended to provide electricity at an
annualized plant capacity factor of at least 60 percent. The GHG
EPS are to be reevaluated and modified by the CEC and the CPUC
in consultation with the ARB.
In calculating the GHG emissions for the purpose of EPS
compliance, carbon dioxide that is injected into geological
formations as to prevent releases into the atmosphere and in
compliance with applicable laws and regulations may not be
counted as emissions of the powerplant. Additionally, net
emissions from the growing, processing, and generating
electricity may be considered for facilities that generate
electricity from biomass, biogas, or landfill gas energy.
Proposed Law:
This bill would create a new basis for determining the EPS and
require a separate EPS be developed for peaking and nonpeaking
facilities beginning on July 1, 2017. Specifically, this bill
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would:
Define "nonpeaking generation" and "peaking generation"
Define "Greenhouse gases emission performance standard"
Directs the CPUC and CEC, in consultation with each other and
ARB, by June 30, 2017 to adopt a GHG EPS for nonpeaking and
peaking generation for load-serving entities and POUs,
respectively. The initial GHG performance standard for peaking
and nonpeaking generation at the lowest level each agency
determines to be technologically feasible without risking the
reliability of the electrical grid and of electric service, or
hampering further development of renewable generation
resources or reductions of GHG emissions, and taking into
consideration siting factors such as altitude, regional
climate, and operating capacity.
Require the CPUC and the CEC to update the EPS at least every
five years based on new technology.
Prohibits, as of July 1, 2017, a load-serving entity or a POU
from entering into a new long-term financial commitment for
peaking or nonpeaking generation unless the source of the
generation complies with the applicable GHG EPS.
Requires the CPUC to reconsider and modify its prior decisions
on how to calculate GHG emissions by facilities generating
electricity from biomass, biogas, or landfill gas energy.
Declare that a carbon capture and storage project is a
"related facility" for the purposes of obtaining certification
from the CEC, thereby subjecting the project to CEC's CEQA
equivalent permitting process.
Related
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Legislation: SB 1368 (Perata) Chapter 598, Statutes of 2006
established the EPS for baseload electricity generation.
Staff
Comments: This bill would create significant costs for both the
CEC and the CPUC to develop EPSs for nonpeaking and peaking
generation supplying POUs and load-serving entities,
respectively.
The CPUC estimates that it would need $230,000 annually for the
development of the new EPSs for generation purchased by
load-serving entities and compliance review. Staff notes that
the CPUC would be reviewing a greater number of facilities with
the inclusion of peaking generating facilities. The CPUC would
also need $250,000 in contract costs for modeling of reliability
impacts of the EPS standards.
The CEC would also have additional workload for the development
of the new EPSs for generation purchased by POUs and compliance
review. The CEC estimates that it would need $150,000 to
$300,000 annually for EPS establishment and updates and
approximately $150,000 ongoing for additional compliance review,
for a total cost of $300,000 to $450,000 annually.
This bill, by allowing a carbon capture and storage project to
be a related facility for the purposes of CEC permitting, brings
carbon capture projects under the jurisdiction of the CEC when
there is a generation facility involved. Currently the Division
of Oil, Gas, and Geothermal Resources (DOGGR) within the
Department of Conservation has the dedicated authority from the
US EPA to permit carbon sequestration projects. To date, the
only experience the CEC has had with carbon sequestration is
limited involvement associated with the siting, not the actual
carbon injection, of the proposed Hydrogen Energy California
(HECA) project in Kern County. The CEC's costs associated with
carbon sequestration permitting is uncertain and would depend on
a number of factors including the amount of assistance the CEC
receives from DOGGR and how many applications the CEC will have
to review. As a preliminary estimate, the CEC estimates it
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additional ongoing costs in the mid-hundreds of thousands of
dollars. Based on the CEC's experience with HECA, the CEC will
likely also have additional contract costs of at least $50,000
for each project.
The ARB indicates that it will have minor and absorbable costs
to consult with the CEC and CPUC in the establishing of GHG
EPSs.
Recommended
Amendments: Staff notes that there is an error on page which
inappropriately charges the CEC with adopting the GHG EPS for
peaking generation of load-serving entities instead of a local
publically owned electric utilities.
On page 19, line 33, delete "load-serving entities" and
insert "local publicly owned electric utilities"
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