BILL ANALYSIS Ó
SB 471
Page 1
Date of Hearing: August 26, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
SB 471
(Pavley) - As Amended August 17, 2015
-----------------------------------------------------------------
|Policy |Natural Resources |Vote:|9 - 0 |
|Committee: | | | |
| | | | |
| | | | |
|-------------+-------------------------------+-----+-------------|
| | | | |
| | | | |
| | | | |
|-------------+-------------------------------+-----+-------------|
| | | | |
| | | | |
| | | | |
-----------------------------------------------------------------
Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill explicitly allows reductions of greenhouse gas (GHG)
emissions associated with the water sector, including water use,
supply and treatment, to be eligible for funding from AB 32 cap
and trade revenues. Specifically, this bill:
SB 471
Page 2
1)Requires the California Energy Commission (CEC), in
cooperation with the State Water Resources Control Board
(SWRCB), Air Resources Board (ARB), the Public Utilities
Commission (PUC), and the Department of Water Resources (DWR),
to study water-related energy use in California, as specified.
2)Requires the State Water Resources Control Board (SWRCB), in
cooperation with CEC, ARB, PUC, and DWR, to develop a grant
and loan program, upon appropriation of Greenhouse Gas
Reduction Funds (GGRF), to fund projects that result in
water-related GHG emission reductions. Authorizes SWRCB to
adopt guidelines and regulations necessary to implement the
bill.
3)Requires that any public funds made available for the program
to private water companies regulated by the PUC be used for
the benefit of ratepayers or the public.
FISCAL EFFECT:
1)Annual cost pressures of approximately $10 million to fund a
grant and loan program at SWRCB, including $500,000 for
administration (GGRF).
2)Increased one-time costs of $315,000 and ongoing costs of
$175,000 for ARB to provide assistance to CEC and develop
methodology to quantify GHG reductions (GGRF).
3)Unknown increased ongoing costs for DWR to provide assistance
to CEC, likely in the $50,000 to $250,000 range (GGRF).
SB 471
Page 3
4)Increased ongoing annual costs of $100,000 for the PUC to
provide assistance to the CEC.
COMMENTS:
1)Rationale. Existing law allows GGRF to be used for the
reduction of GHG emissions associated with water use and
supply. Although, it is possible that water treatment would
also be considered an eligible use as it is an integral part
of urban water use and often requires significant amounts of
electricity, this bill ensures water treatment projects are
eligible for GGRF.
2)Background. Under the California Global Warming Solutions Act
of 2006 (AB 32, Chapter 488, Statutes of 2006) the Air
Resources Board (ARB) is required to determine the 1990
statewide greenhouse gas (GHG) emissions level, to approve a
statewide GHG emissions limit equivalent to that level that
will 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 the
regulations. All monies, except for fines and penalties,
collected pursuant to a market-based mechanism are deposited
in the Greenhouse Gas Reduction Fund (GGRF).
Existing law requires the GGRF to be used only to facilitate
the achievement of reductions of
GHG emissions and lists a non-exclusive list of eligible project
purposes including
funding to reduce GHG emissions associated with water use and
supply.
SB 471
Page 4
3)Funding for water and GHG emissions. Emergency drought relief
legislation, SB 103 (Budget Committee, Chapter 2, Statutes of
2014) appropriated $10 million to the California Department of
Food and Agriculture (CDFA) for water and energy efficiency
projects in the agricultural sector, and $30 million to DWR to
implement a grant program to support local water-use
efficiency projects and energy efficiency projects at State
Water Project facilities. If this bill is enacted, there will
be three entities competing for GGRF water project funds.
The 2014-15 Budget allocates $832 million in GGRF revenues to a
variety of transportation, energy, and resources programs
aimed at reducing GHG emissions. Various agencies are in the
process of implementing this funding. The budget agreement
specifies how the state will allocate most cap-and-trade
auction revenues in 2015-16 and beyond. For all future
revenues, the legislation appropriates 25% for the state's
high-speed rail project, 20% for affordable housing and
sustainable communities grants, 10% to intercity capital rail
projects, and 5% for low-carbon transit operations. The
remaining 40% is available for annual appropriation by the
Legislature, but has not yet been appropriated for the 2015-16
Fiscal Year.
Of that 40% available for annual appropriation, the Governor's
proposed 2015-16 cap-and-trade expenditures would appropriate
$60 million to DWR and CDFA for water and energy efficiency
projects, $30 million to CEC and DWR for rebates to replace
inefficient appliances, and $30 million to CEC and DWR for the
Water and Energy Technology Program.
SB 471
Page 5
Analysis Prepared by:Jennifer Galehouse / APPR. / (916)
319-2081