BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     SB 551


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          Date of Hearing:  July 14, 2015


                  ASSEMBLY COMMITTEE ON WATER, PARKS, AND WILDLIFE


                                 Marc Levine, Chair


          SB  
          551 (Wolk) - As Amended July 6, 2015


          SENATE VOTE:  27-9


          SUBJECT:  State water policy: water and energy efficiency.


          SUMMARY:  Establishes a State policy recognizing the nexus  
          between water and energy and requiring that water use and water  
          treatment be as energy efficient as feasible and that energy use  
          and generation be as water efficient as feasible.  Specifically,  
          this bill:  


          1)Finds and declares that water and energy are vital to  
            California's economy and inextricably linked and that energy  
            generation can be water intensive.


          2)Further finds and declares that water treatment and wastewater  
            disposal account for nearly 20% of the electricity and 30% of  
            the nonpowerplant-related natural gas consumed in California.


          3)Establishes a State policy that water use and water treatment  









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            shall operate in a manner that is as energy efficient as  
            feasible and that energy use and generation shall operate in a  
            manner that is as water efficient as feasible.


          4)Requires all relevant state agencies to consider the water and  
            energy efficiency policy when revising, adopting, or  
            establishing policies, regulations, and criteria pertinent to  
            the use of energy and water.


          5)Defines feasibility as capable of being accomplished in a  
            successful manner within a reasonable period of time taking  
            into account specified factors including, but not limited to,  
            cost, environment, public health, and technology.  


          EXISTING LAW:   


          1)Establishes the policy of the state and the intent of the  
            Legislature to promote all feasible means of energy and water  
            conservation and all feasible uses of alternative energy and  
            water supply sources.

          2)Finds and declares that waste or unreasonable use of water  
            imposes unnecessary and wasteful consumption of energy to  
            deliver or furnish the water, and it is necessary, therefore,  
            to determine the quantities of water in use throughout the  
            state to the maximum extent that it is reasonable to do so in  
            order to reduce that energy consumption.


          FISCAL EFFECT:  According to the Senate Appropriations Committee  
          analysis this bill would create cost pressures, potentially in  
          the millions of dollars to the General Fund and various special  
          funds to increase grant awards, reprioritize programs, and  









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          change state operations to increase electricity and water  
          efficiency.


          COMMENTS:  According to research performed by the California  
          Energy Commission (CEC), "water and energy resources are  
          inextricably connected, and this is known as the Water-Energy  
          Nexus."  This bill would create a new state efficiency policy  
          with regard to the Water-Energy Nexus.


          Author's statement:  According to the author, water  
          transportation, treatment, and use require a great deal of  
          energy, while energy generation also requires water.  The author  
          specifies that, "transportation and treatment of water,  
          treatment and disposal of wastewater, and the energy used to  
          heat and consume water account for nearly 20% of the total  
          electricity and 30% of non-power plant related natural gas  
          consumed in California."  The author adds that, "demand for  
          water and energy resources is expected to rise due to population  
          growth and also as the result of climate change.  California  
          must take every measure to ensure that both water and energy  
          efficiencies are maximized by developing water and energy  
          policies that recognize the nexus between these two vital  
          resources."


          Background:  Focus on the Water-Energy Nexus is growing.  The  
          CEC, in its policy report California's Water-Energy Relationship  
          (Prepared in support of the 2005 Integrated Energy Policy Report  
          Proceeding (04-IEPR-01E)) found that "the relationship between  
          the water sector and the energy sector is complex and highly  
          interdependent."  The report also found that "currently, most  
          water and energy system are internally optimized on a single  
          utility basis. Systems are rarely optimized in coordination with  
          other systems (water, wastewater, electric, and natural gas) or  
          with their customers, missing opportunities to reduce total  









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          energy consumption, shift loads off-peak, or maximize energy  
          generation."  The report states that "energy demand in the water  
          sector will likely increase over time due to a number of  
          factors, including population and urban load growth, increased  
          water and wastewater treatment because of more stringent water  
          quality regulations to protect water quality, and market,  
          economic, regulatory, and legislative changes."


          Some energy think tanks are linking food to the nexus as well.   
          In the February 2015 Scientific American article A Puzzle for  
          the Planet, Michael Webber, Deputy Director of the Energy  
          Institute at the University of Texas at Austin states that in  
          "July 2012 three of India's regional electric grids failed,  
          triggering the largest blackout on earth.  More than 620 million  
          people - 9 percent of the world's population - were left  
          powerless.  The cause: the strain of food production from a lack  
          of water. Because of a major drought, farmers plugged in more  
          and more electric pumps to draw water from deeper and deeper  
          belowground for irrigation.  Those pumps, working furiously  
          under the hot sun, increased the demand on power plants.  At the  
          same time low water levels meant hydroelectric dams were  
          generating less electricity than normal." California, Mr. Webber  
          concludes, "is facing a surprisingly similar confluence of  
          energy, water, and food troubles" that require "new policy  
          thinking."  


          Related legislation:  SB 471 (Pavley) recognizes the nexus  
          between water and energy and water and reduction of greenhouse  
          gas emissions and includes reduction of greenhouse gas emissions  
          associated with water treatment among the investments that are  
          eligible for funding from the Greenhouse Gas Reduction Fund.  SB  
          471 is pending in the Assembly. 


          Supporting arguments:  Supporters state that the "water sector  









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          in this state can use around 20% of total energy" and that "as  
          we work to increase energy efficiency and reduce greenhouse  
          gases we should consider every sector, including water."   
          Supporters conclude that this bill will "ensure real energy  
          savings and that we adopt the smartest water policies going  
          forward." 


          Other parties make their support contingent on the author adding  
          amendments to this bill specifying that the policy does not  
          create a "loading order" that would "direct water managers to  
          use the least energy-consumptive water first, and through a  
          progression, only utilize the most energy-consumptive water  
          supplies (such as desalination and potable reuse) as a last  
          resort."  These supporters also dispute the energy-consumption  
          figures in the findings of the bill and recommend other figures.


          Opposing arguments:  None on file.


          REGISTERED SUPPORT / OPPOSITION:




          Support


          Sierra Club of California  


          California League of Conservation Voters


          San Diego County Water Authority (if amended)










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          Opposition


          None on file




          Analysis Prepared by:Tina Leahy / W., P., & W. / (916)  
          319-2096