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 --