BILL ANALYSIS Ó
SB 1074
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Date of Hearing: June 29, 2016
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Mike Gatto, Chair
SB
1074 (Hueso) - As Amended June 20, 2016
SENATE VOTE: 29-9
SUBJECT: Energy: Federal Trust Fund: geothermal projects
SUMMARY: Appropriates $13 million to the California Energy
Commission (CEC) from the American Recovery and Reinvestment Act
of 2009 (ARRA) in the Federal Trust Fund, and allocates $2.5
million, for the 2016-17 fiscal year and annually thereafter, to
be expended towards specified projects, including geothermal
brine treatment projects. Specifically, this bill:
1)Appropriates $13 million, for the 2016-17 fiscal year, to the
CEC from the ARRA in the Federal Trust Fund for specified
purposes.
2)Allocates $2.5 million of the $13 million appropriated to the
CEC for the 2016-17 fiscal year, from the ARRA in the Federal
Trust Fund, to be expended towards specified projects.
3)Allocates $2.5 million annually for the 2017-18 fiscal year
and each fiscal year thereafter, until all moneys in the
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Federal Trust Fund derived from the ARRA has been encumbered
or expend to be continuously appropriated to the CEC for
specified purposes.
4)Authorizes projects to recover lithium, metals, agricultural
products, and other beneficial minerals from highly
mineralized geothermal brines at an existing geothermal
facility that is in a disadvantaged community and provides
local employment opportunities to receive specified funds.
5)Requires the CEC to issue a competitive solicitation for
specified projects no later than February 1, 2017.
EXISTING LAW:
1)Authorizes specified federal funds available to the CEC to be
used to augment funding for any specified programs or measures
unless prohibited by the ARRA. (Public Resources Code Section
25463)
2)Establishes the Geothermal Resource Development Account to
promote the development of new or existing geothermal
resources and technologies. (Public Resources Code Section
3820 et seq.)
3)Requires revenues from the Geothermal Resource Development
Account, disbursed to specified counties of origin and grants
or specified loans made to local jurisdictions or private
entities to be expended by recipients for the following
purposes:
a) Undertaking research and development projects relating
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to geothermal resource assessment and exploration, and
direct-use and electric generation technology.
b) Local and regional planning and policy development and
implementation necessary for compliance with programs
required by local, state, or federal laws and regulations.
c) Identification of feasible measures that will mitigate
the adverse impacts of the development of geothermal
resources and the adoption of ordinances, regulations, and
guidelines to implement those measures.
d) Collecting baseline data and conducting environmental
monitoring.
e) Preparation or revision of geothermal resource elements,
or geothermal components of energy elements, for inclusion
in the local general plan, zoning and other ordinances, and
related planning and environmental documents.
f) Administrative costs incurred by the local jurisdiction
that are attributable to the development or production of
geothermal resources.
g) Monitoring and inspecting geothermal facilities and
related activities to assure compliance with applicable
laws, regulations, and ordinances.
h) Identifying, researching, and implementing feasible
measures that will mitigate the adverse impacts of that
development or production.
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i) Planning, constructing, providing, operating, and
maintaining those public services and facilities that are
necessitated by and result from the development or
production.
j) Undertaking projects demonstrating the technical and
economic feasibility of geothermal direct heat and
electrical generation applications.
aa) Undertaking projects for the enhancement, restoration,
or preservation of natural resources, including, but not
limited to, water development, water quality improvement,
fisheries enhancement, and park and recreation facilities
and areas. (Public Resources Code Section 3823)
FISCAL EFFECT: Unknown.
COMMENTS:
1)Author's Statement: "It is in the state's interest to fund
select projects for mineral extraction from geothermal brines.
Such activity can make geothermal energy production more cost
effective, and near-zero carbon-free electricity, such as
geothermal energy production, is needed to reduce greenhouse
gas emissions [?] The geothermal brine produced by Salton Sea
geothermal resources is highly mineralized and corrosive.
Extraction of these minerals from the brine is one of the most
significant cost of geothermal development in the Salton Sea.
The state has the potential to help commercialize domestic
mineral mining from geothermal brine, which will produce
lithium and manganese dioxide necessary for electric battery
manufacturing, thereby transforming an economic cost into an
economic benefit."
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2)Background: In February 2009, the United States Congress
passed the ARRA which contained extensive funding for science,
engineering, research, and infrastructure development. States
were given discretionary funding through the ARRA to
development and fund projects to promote economic growth.
Through the ARRA, the CEC administered over $314 million in
energy efficiency and renewable energy programs. When the
ARRA ended in 2013, there remained over $30 million throughout
various programs. As part of its evaluation of the remaining
programs established through ARRA funds, the CEC determined
that certain programs were underperforming and is seeking to
reevaluate how the remaining funds should be utilized.
3)California's Geothermal Industry: Geothermal energy is a form
of renewable energy that is generated by drilling into
underground hot water reservoirs, such as geysers and hot
springs, releasing the hot water as steam to the surface in
order to produce electricity. Unlike solar and wind energy,
which are considered intermittent renewables because they are
dependent upon the weather to generate energy, geothermal
power plants are considered base load facilities because they
are able to operate 24 hours per day, 7 days per week,
regardless of weather conditions.
In 2015, geothermal energy produced 11,994 gigawatt-hours
(GWh) of electricity in California. Combined with another 700
GWh of geothermal power imported from outside the state, and
geothermal energy accounted for 6.14% of the states' total
system power. In addition, there are 44 operating geothermal
power plants in California with an installed capacity of 2,716
megawatts, including the world's largest geothermal field, the
Geysers, contains 22 power plants that draw steam from more
than 350 wells. An estimate by the United States Geological
Survey suggests that California's geothermal resources could
provide 800 to 4,600 MWs, with an additional 3,000 to 25,000
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MWs of geothermal resources yet to be discovered but likely to
exist.
This bill appropriates $13 million to the CEC from the ARRA in
the Federal Trust Fund, and allocates $2.5 million, for the
2016-17 fiscal year and annually thereafter, to be expended
towards specified projects, including geothermal brine
treatment projects.
4)Arguments in Support: According to EnergySource LLC, "SB 1074
would direct $2.5 million in unused federal ARRA funds as
grants to further develop technology to capture valuable
minerals from the geothermal process. Advancement of this
technology will help develop a domestic source of lithium to
meet California's growing demand for electric vehicles;
currently the majority of lithium used in California
manufacturing comes from overseas. Further, advancement in
mineral extraction technology in California will result in
significant economic activity and job creation in
disadvantaged communities such as those around the Salton
Sea."
REGISTERED SUPPORT / OPPOSITION:
Support
EnergySource LLC
Imperial County
SB 1074
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Opposition
None on file.
Analysis Prepared by:Edmond Cheung / U. & C. / (916)
319-2083