BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 1213 (Wieckowski) - Renewable energy: biosolids: matching
grants
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|Version: April 4, 2016 |Policy Vote: E., U., & C. 9 - |
| | 0, E.Q. 6 - 0 |
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|Urgency: No |Mandate: No |
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|Hearing Date: May 2, 2016 |Consultant: Narisha Bonakdar |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: SB 1213 continuously appropriates $20 million from the
Greenhouse Gas Reduction Fund (GGRF) to the California Energy
Commission (CEC) to fund competitive grants for capital projects
that use biosolids to generate useful heat energy or
electricity, liquid or gaseous fuels, or useful byproducts.
Fiscal
Impact: Per the CEC, this bill would result in annual costs of
approximately $355,000 to $444,364 (GGRF).
The Air Resources Board (ARB) may also have additional costs to
collaborate with the agency and to incorporate the program into
its annual reporting on GGRF results. It is unclear whether this
program in itself would necessitate an additional position for
these duties. However, to the extent that the Legislature
creates multiple new programs to be funded by the GGRF, the ARB
may require additional positions to collectively be involved in
SB 1213 (Wieckowski) Page 1 of
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the new programs.
Background: The California Global Warming Solutions Act of 2006 (referred
to as AB 32, HSC §38500 et seq.) requires the California Air
Resources Board (ARB) 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. Under this authority, the ARB
initiated the cap-and-trade program. All monies, except for
fines and penalties, collected pursuant to the cap-and-trade
program deposited in the GGRF (Government Code §16428.8).
Existing law requires that the GGRF only be used to facilitate
the achievement of reductions of GHG emissions consistent with
AB 32 (HSC §39710 et seq.). To this end, the Department of
Finance, in consultation with the ARB and any other relevant
state agencies, is required to develop, as specified, a
three-year investment plan for the moneys deposited in the GGRF.
The investment plan must allocate a minimum of 25% of the funds
to projects that benefit disadvantaged communities and to
allocate 10% of the funds to projects located within
disadvantaged communities. Additionally, the ARB, in
consultation with California Environmental Protection Agency
(Cal EPA), is required to develop funding guidelines for
administering agencies receiving allocations of GGRF funds that
include a component for how agencies should maximize benefits to
disadvantaged communities.
Recently, the LAO noted that spending auction revenue on GHG
reductions is likely not necessary to meet the state's GHG
reduction goals and likely increases the overall costs of
emission reduction activities. According to the LAO, "this is
because, in certain cases, spending on GHG reductions interacts
with the regulation in a way that changes the types of emission
reduction activities, but not the overall level of emission
reductions." More specifically, entities covered by the AB 32
cap -such as some larger wastewater treatment plants - must
limit their GHGs to meet the cap. This is true regardless of
any GGRF funding received by the covered entity. The likely
effect of receipt of GGRF monies by a covered entity, therefore,
is reduced compliance costs for the covered entity, but not
increased GHG reduction, either by that covered entity or
SB 1213 (Wieckowski) Page 2 of
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overall. However, funding GHG-reducing projects undertaken by
entities not covered by the AB 32 cap may lead to additional GHG
reductions that would not have otherwise occurred.
Proposed Law: This bill:
1)Defines a "biosolids to clean energy capital project" as one
that uses biosolids to generate useful heat energy or
electricity, liquid or gaseous fuels, or useful byproducts
using nonincineration technology in a manner or location that
also reduces GHGs compared with other biosolids management
practices in use at the time of enactment of this bill.
2)Directs the CEC to establish the "Biosolids Clean Energy Grant
Program" of competitive grants available to local wastewater
agencies to provide 50 percent matching funds for "biosolid to
clean energy capital projects," based on cost-effectiveness
and any other factors deemed appropriate by the CEC.
3)Continuously appropriates $20 million from the GGRF to the CEC
for the competitive grant program.
4)Specifies that the CEC cannot award grants to local wastewater
agencies that are subject to obligation pursuant to a
compliance obligation pursuant to regulations implementing a
market-based compliance mechanism.
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