BILL ANALYSIS Ó SENATE COMMITTEE ON APPROPRIATIONS Senator Ricardo Lara, Chair 2015 - 2016 Regular Session SB 1425 (Pavley) - Water-energy nexus registry ----------------------------------------------------------------- | | | | | | ----------------------------------------------------------------- |--------------------------------+--------------------------------| | | | |Version: March 28, 2016 |Policy Vote: E.Q. 5 - 0 | | | | |--------------------------------+--------------------------------| | | | |Urgency: No |Mandate: No | | | | |--------------------------------+--------------------------------| | | | |Hearing Date: May 2, 2016 |Consultant: Narisha Bonakdar | | | | ----------------------------------------------------------------- This bill meets the criteria for referral to the Suspense File. Bill Summary: SB 1425 requires the California Air Resources Board (ARB), in consultation with relevant state agencies and The California Climate Action Registry (registry), to develop a registry of greenhouse gas (GHG) emissions resulting from the water-energy nexus. Fiscal Impact: One-time cost of $475,000 (Cost of Implementation Fee) for programming costs to develop the electronic registry platform. Ongoing costs, likely in the range of $2 to $3 million (Cost of Implementation Fee), to administer the program. Background:1) According to the CEC, water-related energy use in California consumes approximately 20% of the state's electricity and 30% of the state's non-power plant natural gas (natural gas not used to produce electricity). The water sector uses electricity to pump, treat, transport, deliver, and heat water. SB 1425 (Pavley) Page 1 of ? State law requires electric utilities to disclose the sources of the electricity they sell. However, this requirement does not extend to water utilities that are not retail electricity providers. An April 2015 report from the Union of Concerned Scientists titled, Clean Energy Opportunities in California's Water Sector, reports that although some water and wastewater utilities independently report the sources of their electricity, the information is not compiled in a standardized format or updated on a regular schedule across the water sector. Because of this data gap, the report states that it is difficult to get a clear picture of the amount and type of electricity California's water and wastewater utilities rely on and that this information gap makes it difficult to understand how the water sector's electricity choices impact global warming emissions and the state's efforts to decarbonize the electricity sector. Proposed Law: This bill: 1) Includes intent language pertaining to the nexus between water, energy, and GHG emissions reductions. 2) Requires ARB, in consultation with other relevant state agencies, and The Climate Registry, to develop and administer a registry of GHG emissions resulting from the water-energy nexus using the best available data. 3) Specifies that registry participation is voluntary and open to any entity conducting business in the state. 4) Authorizes a participating entity to register its emissions, including emissions generated outside of the state, on an entity-wide basis, and to utilize the services of the registry. SB 1425 (Pavley) Page 2 of ? 5) Requires ARB, in administering the registry, to do the following: a) Help participating entities establish emissions baselines. b) Encourage voluntary actions to increase water and energy efficiency measures. c) Enable participating entities to record voluntary entity-wide GHG emissions reductions made after 1990 in a consistent format, and that is supported by third-party verification. d) Ensure that sources receive appropriate consideration for entity-level verified emissions reductions under potential future regulatory regimes or qualification for financing opportunities related to GHG emissions. e) Recognize, publicize, and promote participating entities making voluntary reductions of GHG emissions. f) Recruit participation in the registry from all economic sectors and regions of the state. Related Legislation: SB 471 (Pavley, 2015) would have required ARB, in cooperation with other state agencies, to develop a GHG emissions inventory from the water system in the state. SB 471 was later amended to establish a grant and loan program for water projects that result in the net reduction of GHG emissions. SB 471 was held on the Assembly Appropriations suspense file. SB 1425 (Pavley) Page 3 of ? Staff Comments:1) The registry is a nonprofit organization that offers tools and services for organizations to measure, verify, and report the carbon in their operations. The author's office indicates that the registry is already doing much of the work outlined in the bill, which could offset a substantial amount of the reported costs for this bill. -- END --