BILL ANALYSIS Ó
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator Wieckowski, Chair
2015 - 2016 Regular
Bill No: SB 350
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|Author: |de León, Leno |
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|Version: |2/24/2015 |Hearing |4/29/2015 |
| | |Date: | |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Rebecca Newhouse |
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SUBJECT: Clean Energy and Pollution Reduction Act of 2015
ANALYSIS:
Existing law:
1. Provides the California Air Resources Board (ARB) with
primary responsibility for control of mobile source air
pollution, including adoption of rules for reducing vehicle
emissions and the specification of vehicular fuel
composition. (Health and Safety Code §39000 et seq. and
§39500 et seq.)
2. Provides that it is the policy of the state to establish a
state transportation energy policy that results in the least
environmental and economic cost to the state, and that in
pursuing that strategy, it is the policy of the state to
exploit all practicable and cost-effective conservation and
improvements in the efficiency of energy use and distribution
and to achieve energy security, diversity of supply sources,
and competitiveness of transportation energy markets based on
the least environmental and economic cost. (Public Resources
Code §25000.5)
3. Directs ARB to implement motor vehicle emission standards,
in-use performance standards, and motor vehicle fuel
specifications for the control of air contaminants and
sources of air pollution that ARB finds to be necessary, cost
effective, and technologically feasible, unless preempted by
federal law. (HSC §43013 et seq.)
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4. Under the California Global Warming Solutions Act of 2006,
requires ARB to determine the 1990 statewide greenhouse gas
(GHG) emissions level and approve a statewide GHG emissions
limit that is equivalent to that level, to be achieved by
2020, and to adopt GHG emissions reductions measures by
regulation. ARB is authorized to include the use of
market-based mechanisms to comply with these regulations.
(HSC §38500 et seq.)
5. Requires the California Energy Resources Conservation and
Development Commission (CEC) to develop and implement a
comprehensive program to achieve greater energy savings in
the state's existing residential and nonresidential building
stock, and requires CEC to periodically update the criteria
and adopt any revision necessary to refine program
requirement after receiving public input. (PRC §25943)
6. Under the Renewable Portfolio Standard (RPS) requires
investor-owned utilities (IOUs), publicly owned utilities
(POUs) and certain other retail sellers of electricity to
achieve 33% of their energy sales from an eligible renewable
electrical generation facility by December 31, 2020, and
establishes portfolio requirements and a timeline for
procurement quantities of three product categories. (Public
Utilities Code §399.11 et seq.)
This bill:
1. Directs the ARB to adopt and implement motor vehicle
emissions standards, in-use performance standards, and motor
vehicle fuel specifications in furtherance of achieving a 50%
reduction in petroleum use in motor vehicles by January 1,
2030.
2. Provides that in pursuing the least environmental and
economic cost strategy, it is the policy of the state to
exploit all practicable and cost-effective conservation and
improvements in the efficiency of energy use and distribution
and to achieve energy security, diversity of supply sources,
and competitiveness of transportation energy markets based on
the least environmental and economic cost and in furtherance
of reducing petroleum use in the transportation sector by 50%
by January 1, 2013.
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3. Directs CEC, by January 1, 2017, and at least once every
three years thereafter, to adopt an update to its
comprehensive program for achieving greater energy savings in
the state's existing residential and nonresidential building
stock in order to achieve a doubling of the energy efficiency
of existing buildings by January 1, 2030.
4. Directs PUC and CEC to implement the RPS to obtain the target
of generating 50% of total retail electricity sales from
renewable energy resources by December 31, 2030, and makes
other changes regarding RPS requirements and enforcement.
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Background
1. Climate Change.
The fifth assessment report from the Intergovernmental Panel
on Climate Change notes that atmospheric concentrations of
global warming pollutants have risen to levels unseen in the
past 800,000 years. Carbon dioxide concentrations have
increased by 40% since pre-industrial times. There is broad
scientific consensus that these global greenhouse gases
(GHGs) emission increases are leading to higher air and water
temperatures as well as rising sea levels, with serious
consequences for California.
2050 GHG goal. In 2005, Governor Schwarzenegger issued
Executive Order S-3-05 and called for GHG emissions
reductions to 1990 levels by 2020 and 80% below 1990 levels
by 2050. According to the 2008 Scoping Plan, the 2020 goal
was designed to be an aggressive but attainable near-term
target, and the 2050 goal represented broad scientific
consensus of emissions reduction levels necessary for climate
stabilization.
ARB reports that studies show that a 45-55% petroleum
reduction in 2030 sets California on a path to meet the 2050
GHG goals.
2. Pollution from Petroleum.
In addition to contributing to climate change, petroleum use
in the state is a major source of toxic and criteria air
pollutants. ARB reports that in California the production,
refining, and use of petroleum accounts for 80% of
smog-forming pollution and over 95% of diesel particulate
matter.
Diesel exhaust is a complex mixture of thousands of gases and
fine particles (commonly known as soot) that contains more
than 40 toxic air contaminants. These include many known or
suspected cancer-causing substances, such as benzene, arsenic
and formaldehyde. It also contains other harmful pollutants,
including nitrogen oxides (a component of smog).
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Diesel engines are a major source of fine-particle pollution
(also called particulate matter or PM). The elderly and
people with emphysema, asthma, and chronic heart and lung
disease are especially sensitive to PM. Numerous studies have
linked elevated particle levels in the air to increased
hospital admissions, emergency room visits, asthma attacks
and premature deaths among those suffering from respiratory
problems. Because children's lungs and respiratory systems
are still developing, they are also more susceptible than
healthy adults to fine particles. Exposure to PM is
associated with increased frequency of childhood illnesses
and can also reduce lung function in children.
Diesel exhaust and many individual substances contained in it
have the potential to contribute to mutations in cells that
can lead to cancer. In fact, long-term exposure to diesel
exhaust particles poses the highest cancer risk of any toxic
air contaminant evaluated by the Office of Environmental
Health Hazard Assessment (OEHHA).
Smog is formed from the reaction of oxides of nitrogen with
volatile organic compounds to produce ground-level ozone, or
tropospheric ozone. Ozone has a number of negative health
effects including irritated respiratory system, reduced lung
function, aggravated asthma and inflammation and damage of
the lining of the lung. Active children are the group at
highest risk from ozone exposure.
Under the federal Clean Air Act, the US Environmental
Protection Agency (US EPA) established National Ambient Air
Quality Standards (NAAQS) that apply for outdoor air
throughout the country. These federal standards exist for
several air pollutants due to their negative impact on public
health above specified concentrations, including ozone,
particulate matter, oxides of nitrogen, and oxides of sulfur,
carbon monoxide, and lead. Nonattainment areas are regions
that do not meet the national primary or secondary ambient
air quality standard for one of those pollutants. There are
several nonattainment designations ranging from
concentrations slightly above the standard, termed marginal
nonattainment, to extreme nonattainment, where pollution
levels far exceed the national standard.
On November 25, 2014, the US EPA proposed to strengthen the
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current 2008 NAAQS for ground-level ozone, based on extensive
scientific evidence about ozone's effects on public health
and welfare. US EPA's proposal finds that the current level
of the standard, 75 parts per billion, is not adequate to
protect public health.
The San Joaquin and South Coast air basins are both in
extreme nonattainment for the 2008 NAAQS for ozone. States
with nonattainment areas would have until 2020 to late 2037
to meet the proposed health standard, with attainment dates
varying based on the ozone level in the area.
According to ARB, in order for the state to meet federal air
quality standards, petroleum use must be cut by 50% over the
next 15 years.
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3. Reducing Petroleum and Diversifying Fuel.
As the evidence for man-made climate change has mounted over
the last few decades, the state has implemented a broad
climate portfolio to mitigate global warming impacts by
pursuing policies that reduce GHGs. Because the
transportation sector is responsible for 38% of the state's
total GHG emissions, much of that portfolio targets GHG
emissions from that sector. These policies include a range
of regulatory and incentive programs including reducing GHG
emissions through low-carbon fuels, increased fuel
efficiency, near-zero and zero-emission vehicles, transit
options, and sustainable, transit-oriented communities.
Additionally, since the transportation sector contributes 80%
of smog-forming gases each year, these policies also have
significant cobenefits regarding improved public health
outcomes and serve to help the state meet federal and state
air quality standards.
A. AB 32: The California Global Warming Solutions Act of
2006.
In 2006, the Global Warming Solutions Act of 2006 (AB 32,
Núńez and Pavley, Chapter 488, Statutes of 2006)
established a statewide GHG emissions goal equivalent to
the 1990 level of GHG emissions, to be achieved by 2020.
AB 32 Scoping Plan: Major Transportation Measures.
(1) Low Carbon Fuel Standard (LCFS). The LCFS
requires fuel suppliers in the state to meet certain
average annual carbon limitations. The program
ultimately requires a 10% reduction in the carbon
intensity of a particular fuel by 2020. The carbon
intensity measures the net carbon emissions of the
entire life-cycle of the fuel, including carbon
emitted during production, refining, and
transportation, and conversion of the fuel to useable
energy. Fuel suppliers can meet the standard by
reducing the carbon intensity of their fuels, or by
purchasing credits from other suppliers of other
fuels that have carbon intensities below state
requirements.
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(2) Advanced Clean Cars. The Advanced Clean Cars
program includes three regulatory mechanisms,
including the Low Emission Vehicle regulations.
These regulations include new GHG emission standards
for cars and light trucks to reduce GHG emissions by
34% from the 2016 standard during the 2017-25 model
years, as well as regulations to reduce smog-forming
emissions from vehicles. The Advanced Clean Cars
program also includes the Zero Emission Vehicle (ZEV)
regulation, which requires that by 2025 about 15% of
new car sales will be ZEVs.
(3) SB 375 and Sustainable Communities Strategies.
Under the Sustainable Communities and Climate
Protection Act of 2008 (SB 375, Steinberg, Chapter
728, Statutes of 2008), ARB sets regional targets for
GHG emissions reductions from passenger vehicle use.
The Act requires each of California's metropolitan
planning organizations to prepare a sustainable
communities strategy as an integral part of its
regional transportation plan, which contains land
use, housing, and transportation strategies that, if
implemented, would allow the region to meet its GHG
emission reduction targets.
(4) Cap-and-Trade Program. Pursuant to AB 32, ARB
adopted a cap-and-trade program that places a "cap"
on aggregate GHG emissions from large GHG emitters
(such as large industrial facilities, electricity
suppliers, and transportation fuel suppliers), which
are responsible for approximately 85% of the state's
GHG emissions. The cap declines over time,
eventually reaching the target emission level in
2020.
Beginning January 1, 2015, the cap-and-trade
regulation requires transportation fuel and natural
gas suppliers to obtain allowances for the GHG
emissions associated with the combustion of the fuels
they provide. As fuels represent such a large source
of greenhouse gases, the inclusion of transportation
fuels approximately doubles the cap and size of the
program.
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B. Cap-and-Trade Auction Revenue Allocations.
The Legislature has also allocated cap-and-trade funds to
several programs to reduce GHG emissions from the
transportation sector.
(1) High-Speed Rail Project. The Legislature has
allocated several hundred million dollars of
cap-and-trade funds to construction of the state's
High-Speed Rail Project. The 2014-15 budget provides
for a continuous appropriation of 25% of
cap-and-trade funds to high-speed rail beginning in
2015-16.
(2) Low Carbon Transit Operations Program. The
Legislature has also allocated cap-and-trade funds to
the newly created Low Carbon Transit Operations
Program. This program provides operating and capital
assistance to transit agencies to reduce GHG
emissions and improve mobility, with a priority on
serving disadvantaged communities. Eligible projects
include expanded, new, or enhanced transit services;
conversion or retrofit of transit vehicles and
equipment to zero-emission; expanded intermodal
transit facilities; and infrastructure to support
zero-emission or plug-in hybrid vehicles. The
2014-15 Budget provides for a continuous
appropriation of 5% of cap-and-trade funds for this
program beginning in 2015-16. The state Department
of Transportation and ARB are currently reviewing
applications.
(3) Transit and Intercity Rail Capital Program. In
addition, the Legislature has allocated cap-and-trade
funds to the newly created Transit and Intercity Rail
Capital Program. This program funds capital
improvements that integrate state and local rail and
other transit systems, including projects located in
disadvantaged communities and projects that provide
connectivity to the high-speed rail system. The
2014-15 Budget provided for a continuous
appropriation of 10% of cap-and-trade funds to this
program beginning in 2015-16.
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(4) Clean Vehicle Rebate Program (CVRP). CVRP,
provides rebates of up to $2,500 for the purchase or
lease of a new zero emission vehicle (ZEV) or plug-in
hybrid electric vehicle. CVRP is administered by ARB
and its contractor, the California Center for
Sustainable Energy.
(5) Hybrid and Zero-Emission Truck and Bus Voucher
Incentive Project (HVIP). HVIP is administered by
ARB and its contractor, CALSTART. HVIP provides
vouchers to California fleet owners to help purchase
hybrid and zero-emission trucks and buses.
(6) Zero-Emission Truck and Bus Pilot Projects. SB
1204 (Lara), Chapter 524, Statutes of 2014, requires
ARB to develop a new program, the California Clean
Truck, Bus, and Off-Road Vehicle and Equipment
Technology Program. This program, known as
Zero-Emission Truck and Bus Pilot Projects, will fund
development, demonstration, pre-commercial pilot, and
early commercial deployment of zero- and
near-zero-emission truck, bus, and off-road vehicle
technologies, with prioritization of projects located
in disadvantaged communities. ARB is currently
holding public workgroup meetings to solicit
stakeholder input.
(7) Advanced Technology Freight Demonstration
Projects. The Legislature has also allocated
cap-and-trade funds to Advanced Technology Freight
Demonstration Projects. This program provides grants
to local air districts and other public agencies to
fund advanced technology vehicle, equipment, or
emission-control projects that are not yet
commercialized.
C. Other Transportation-Related Emission Reduction
Programs.
(1) Enhanced Fleet Modernization Program (EFMP).
EFMP, administered by ARB and the Bureau of
Automotive Repair (BAR), provides funds for the
voluntary retirement of eligible passenger vehicles
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and light- and medium-duty trucks that are high
polluters. The statewide component of this program,
administered by ARB in consultation with BAR, offers
a voucher to eligible vehicle owners to retire a
high-polluting vehicle. The local component of the
program, administered by ARB and authorized only in
the San Joaquin Air Pollution Control District and
the South Coast Air Quality Management District,
offers an additional voucher to eligible owners to
replace a high-polluting vehicle.
(2) Alternative and Renewable Fuel and Vehicle
Technology Program (ARFVTP). ARFVTP, administered by
the California Energy Commission, provides funding
for the development and deployment of alternative and
renewable fuels and advanced transportation
technologies to help attain AB 32 goals. Eligible
projects include development, improvement, and
production of alternative and renewable low-carbon
fuels; improvement of light-, medium-, and heavy-duty
vehicle technologies; and expansion of infrastructure
connected with existing fleets, public transit, and
transportation corridors.
(3) Active Transportation Program (ATP). ATP was
established by the 2013-14 Budget. This program,
administered by the state Department of
Transportation, aims to encourage increased use of
active modes of transportation such as bicycling and
walking. ATP consolidates various bicycle- and
pedestrian-related programs into a single program to,
among, other goals, advance the efforts of regional
agencies to achieve their GHG reduction goals.
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Comments
1. Purpose of Bill.
According to the author, "SB 350 implements new Golden State
Standards "50-50-50" benchmarks by raising California's
renewable portfolio standard from 33% to 50%, striving for a
50% reduction in petroleum use, and increasing energy
efficiency in buildings by 50% by the year 2030. SB 350
makes these standards permanent, trackable, and enforceable
by enacting them into law and building on the accountability
mechanisms already in existence to ensure they are fully
implemented. Each of these standards are added to existing
clean air, clean energy, and climate related statutes that
have been implemented for years.
"The 50% renewable energy standard will be implemented by the
CA Public Utilities Commission for the private utilities and
by the CA Energy Commission for municipal utilities, as per
current law. Each utility submits a procurement plan showing
it will purchase clean energy to displace other non-renewable
resources. Each state agency then reviews the plan, ensures
it complies with the law and approves the plan. California
has more than doubled renewable capacity installed in the
last four years (adding over 11,000 megawatts) and has more
than 21,000 megawatts online, which includes 2,300 megawatts
on 245,000 homes, businesses, and schools.
"The 50% reduction in petroleum use also will be implemented
using existing laws and financial resources. Under current
law, the state air board must reduce pollution in order to
achieve state and federal ambient air standards. Current law
(Health and Safety Code Section 42013) requires the board to
adopt standards for vehicles and fuels to achieve clean air.
This measure simply ensures those actions will achieve a 50%
reduction in petroleum by 2030.
"Finally, the 50% increase in energy efficiency in buildings
will be done through the use of existing energy efficiency
retrofit funding and regulatory tools already available to
state energy agencies under existing law. The addition made
by this measure requires state energy agencies to plan for,
and implement those programs in a manner that achieves the
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energy efficiency target."
2. New Goal, Same Tools.
To a large extent, the bill uses existing state programs to
reach the petroleum reduction, energy efficiency, and
renewable energy goals in the bill. The latter two aims of
the bill concerning energy efficiency and RPS targets are the
jurisdiction of the Senate Energy, Utilities and
Communications Committee and were discussed in their hearing
on April 7, 2015, as well as in the staff analysis for that
committee.
Specifically for the petroleum goal, SB 350 builds off the
ARB's current authority to adopt and implement motor vehicle
emission standards, in-use performance standards, and fuel
specifications for the control of air pollution in the state
to reduce petroleum use by 50%. Additionally, SB 350
includes the 50% petroleum reduction goal into CEC's state
transportation energy policy.
Presumably, however, the enabling provisions in SB 350 will
not be acting in isolation to achieve the requisite petroleum
reductions. ARB has broad authority under AB 32 to regulate
transportation GHG emissions reductions, and currently does
so with a variety of programs, including the cap-and-trade
program and the LCFS. Additionally, SB 32 (Pavley), which is
also being heard by this committee and is part of a package
of climate-related legislation along with SB 350 and several
other bills, would extend AB 32 and ARB's broad emissions
reduction authority to achieve a GHG emission reduction goal
of 80% below 1990 GHG emissions levels by 2050.
According to ARB, an approach to 50% petroleum reduction
could include "reducing growth in vehicle-miles travelled to
4%; increasing on-road fuel efficiency of cars to 35 mpg and
heavy-duty trucks to about 7 mpg; and at least doubling the
use of alternative fuels like biofuels, electricity,
hydrogen, and renewable natural gas."
3. 50% Reduction Compared to What?
The bill specifies a reduction in petroleum use of 50% by
January 1, 2030. However, the bill does not specify a
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baseline level of petroleum use. The author may wish to
clarify this point as the bill moves forward.
Related/Prior Legislation
SB 32 (Pavley, 2014) establishes a GHG emissions reduction goal
of 80% below 1990 GHG emission levels, to be achieved by 2050.
SB 32 will be heard by the Senate Environmental Quality
Committee on April 29, 2015.
SOURCE: Author
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SUPPORT:
American Academy of Pediatrics, California
American Cancer Society Cancer Action Network, California
American Lung Association, California
Asthma Coalition of Los Angeles County
Audubon California
Azul
Baz Allergy, Asthma and Sinus Center
Berkshire Hathaway Energy
Blattner Energy
Bonnie J. Adario Lung Cancer Foundation
Breathe California
BYD Motors, Inc.
California Thoracic Society
California Black Health Network
California Conference of Directors of Environmental Health
California Energy Efficiency Industry Council
California Hydropower Reform Coalition
California League of Conservation Voters
California Pan Ethnic Health Network
California Public Health Association, North
Californians Against Waste
CALSTART
Center for Biological Diversity
Center for Climate Change and Health, Public Health Institute
Center for Sustainable Energy
Central California Asthma Collaborative
Circulate San Diego
Clean Energy and Clean Energy Renewable Fuels
Clean Power Campaign
Cleantech San Diego
Clean Water Action
Cleveland National Forest Foundation
Coalition for Clean Air
Coastal Environmental Rights Foundation
Dignity Health
Doctors for Climate Health
Endangered Habitats League
Environment California
Environmental Action Committee of West Marin
Environmental Defense Fund
Environmental Entrepreneurs
First Solar
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Friends Committee on Legislation of California
Friends of the River
Health Care Without Harm
Large-Scale Solar Association
League of Women Voters of California
McCarthy Building Companies, Inc.
Medical Advocates for Healthy Air
Moms Clean Air Force
National Parks Conservation Association
Natural Resources Defense Council
NextGen Climate
NEXTracker, Inc.
Office of Ratepayer Advocates
Physicians for Social Responsibility, Los Angeles
Physicians for Social Responsibility, San Francisco Bay Area
Chapter
Planning and Conservation League
Public Health Department, County of Los Angeles
Public Health Institute
Regional Asthma Management and Prevention
San Francisco Asthma Task Force
Santa Clara County Medical Society
Sequoia Riverlands Trust
Sierra Business Council
Sierra Club
Signal Energy, LLC
Sonoma County Asthma Coalition
Southwest Wetlands Interpretive Association
SunEdison
SunPower Corporation
The Utility Reform Network
TransForm
TreePeople
Trust for Public Lands
Union of Concerned Scientists
Wireless Advanced Vehicle Electrification
OPPOSITION:
Associated General Contractors
Building Owners and Managers Association
California Association of Nurseries and Garden Centers
California Chamber of Commerce
California Cotton Ginners Association
California Cotton Growers Association
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California Dairies Inc.
California Farm Bureau Federation
California Fresh Fruit Association
California Independent Oil Marketers Association
California Independent Petroleum Association
California Manufactures & Technology Association
California Metals Coalition
California Retailers Association
CalTax
Far West Equipment Dealers Association
Harris Farms
International Council of shopping Centers
NAIOP-Commercial Real Estate Development Association
National Federation of Independent Business
National Tank Truck Carriers
Simi Valley Chamber of Commerce
Southwest California Legislative Council
Torrance Chamber of Commerce
United
West Coast Lumber and Building Material Association
Western Aerosol Information Bureau
Western Agricultural Processors Association
Western Agricultural Processors Association
Western Growers Association
Western Plant Health Association
Western States Petroleum Association
ARGUMENTS IN
SUPPORT:
Supporters note that climate change is increasingly impacting
the state and it is prudent and timely to take the next steps to
advance a clean energy economy and create jobs by increasing
renewable energy, improving the energy efficiency of our
buildings, and reducing petroleum use throughout the state.
Supporters also note that SB 350, while setting California on a
trajectory to meet the state's GHG goals, will also spur the
types of innovations that will keep the state a leader in the
global green economy. Supporters state that SB 350 fights
against the state's addiction to oil, the major contributor to
smog, carcinogenic diesel soot, and carbon pollution in
California by cutting petroleum in half by 2030.
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ARGUMENTS IN
OPPOSITION:
Opponents notes that SB 350 is not clear whether ARB should
adopt and implement policies that impact the demand for
petroleum fuels or whether they should adopt and implement
policies that affect the supply of transportation fuels, and as
a result, the bill may reduce availability of critical
transportation fuels for businesses and millions of Californians
that depend on petroleum fuels for day-to-day needs. Opponents
also note that SB 350 would result in a broad transfer of
decision-making authority from the Legislature to nonelected
regulators and that SB 350's RPS targets would threaten energy
affordability and reliability.
DOUBLE REFERRAL:
This measure was heard in the Senate Energy, Utilities and
Communications Committee on April 7, 2015, and passed out of
committee with a vote of 8-3.
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