BILL ANALYSIS Ó
SB 1074
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Date of Hearing: August 3, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
SB 1074
(Hueso) - As Amended June 20, 2016
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|Policy |Utilities and Commerce |Vote:|14 - 0 |
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY: This bill 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 to CEC from ARRA in
the Federal Trust Fund.
2)Allocates $2.5 million of the $13 million appropriated to the
CEC for 2016-17 fiscal, from ARRA in the Federal Trust Fund,
to be expended towards specified projects (see #4).
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3)Continuously appropriates $2.5 million annually for 2017-18
and each year thereafter, until all moneys in the Federal
Trust Fund derived from ARRA has been encumbered or expended.
4)Provides eligible projects are those that 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.
5)Requires the CEC to issue a competitive solicitation for
specified projects no later than February 1, 2017.
FISCAL EFFECT:
1)One-time appropriation of $13 million (Federal Trust Fund).
2)Continuous annual appropriations of $2.5 million (Federal
Trust Fund) until funds have been encumbered or expended.
3)Increased CEC costs of approximately $150,000 (GF or special
fund) to fund one staff position. This position would conduct
a competitive solicitation and manage grants for the
geothermal project. The bill does not identify a funding
source for these costs.
The recently adopted budget included CEC's Budget Change
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Proposal related to this program. The adopted proposal requested
$13 million in federal fund expenditure authority for 2016-17,
and ongoing federal fund expenditure authority of $2.5 million
for 2017-18 through 2026-27 to finance a competitive grant
program to facilitate more effective use of local government
knowledge and conduct energy efficiency improvements in existing
buildings.
COMMENTS:
1)Purpose. According the author, it is in the state's
interest to fund select projects for mineral extraction from
geothermal brines. Geothermal brine is the waste stream of
the geothermal power production cycle and because it is high
in corrosive minerals, it is considered a nuisance. 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 costs
of geothermal development in the Salton Sea. This bill
provides the incentives to help offset the costs of geothermal
production.
2)Background. In February 2009, the United States Congress
passed ARRA which contained funding for science, engineering,
research, and infrastructure development. States were given
discretionary funding through ARRA to development and fund
projects to promote economic growth. Through ARRA, the CEC
administered over $314 million in energy efficiency and
renewable energy programs. When ARRA ended in 2013, over $30
million remained throughout various programs.
3)California's Geothermal Industry. Geothermal energy is a form
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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.
Analysis Prepared by:Jennifer Galehouse / APPR. / (916)
319-2081