BILL ANALYSIS Ó
SB 1425
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Date of Hearing: August 3, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
SB 1425
(Pavley) - As Amended August 1, 2016
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|Policy |Natural Resources |Vote:|9 - 0 |
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill requires CalEPA to enter into contract with The
Climate Registry, to develop a voluntary registry of greenhouse
gas (GHG) emissions resulting from the water-energy nexus using
the best available data. This bill allows entities
participating in the registry to qualify for financial
incentives consistent with the AB 32 investment plan.
FISCAL EFFECT:
1) Increased ongoing annual costs of approximately $130,000
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(1PY) for CalEPA to oversee the development of the voluntary
registry (GF or special fund.)
This bill requires CalEPA to execute a sole source contract
with The Climate Registry. Without the ability to
competitively bid a contract for registry services, there may
be little control over the overall cost impact. As written, a
water-energy registry would be voluntary, thus CalEPA staff
would likely work closely with The Climate Registry to engage
water-energy stakeholders, train them, and regularly update
them on program opportunities and improvement.
2) CalEPA estimates annual contracting costs of $250,000 for
three years or more (GF or special fund).
3) The Climate Registry estimates the following costs (GF or
special fund):
a) One-time cost totaling between $600,000 and $700,000
over two years to convene a multi-stakeholder protocol
process to develop a protocol for the water-energy nexus
quantification and build an SAS tool based on the
protocol.
b) Ongoing annual cost of between $250,000 and $300,000 for
software support and maintenance, protocol maintenance and
new software modules to incorporate updated protocols.
c) Additional miscellaneous annual costs depending upon the
number of services and participants ranging between $50,000
and $250,000.
The Climate Registry would likely charge a service or
membership fee to water agencies. It is important to note
the AB 32 Cost of Implementation Account may be proposed for
the purposes of this bill, however it is a fund derived from
fees on covered entities and may not be appropriate for this
purpose.
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COMMENTS:
1)Purpose. According to the author, this bill establishes a
voluntary emissions repository for projects that reduce the
carbon intensity of California's water system. This new
registry will allow entities such as water agencies, large
water consumers, businesses and others to voluntarily track,
measure, and baseline their GHG emissions resulting from the
water-energy nexus.
2)Water-Energy Nexus. According to the California Energy
Commission (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. The water sector
uses electricity to pump, treat, transport, deliver, and heat
water.
Electric utilities are required to disclose the sources of the
electricity they sell. However, this requirement does not
extend to water utilities that do not also provide retail
electricity. An April 2015 report from the Union of Concerned
Scientists titled, Clean Energy Opportunities in California's
Water Sector, found 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: 1) it is
difficult to get a clear picture of the amount and type of
electricity California's water and wastewater utilities rely
on; and 2) this information gap makes it difficult to
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understand how the water sector's electricity choices impact
global warming emissions and the state's efforts to
decarbonize the electricity sector.
3)The Climate Registry and its Predecessor. SB 1771 (Sher,
Chapter 1018, Statutes of 2006) required the Secretary of the
Resources Agency to establish the California Climate Action
Registry as a public benefit nonprofit corporation that would
record and register voluntary GHG emission reductions made by
California entities after 1990. Following the enactment of
the Global Warming Solutions Act of 2006 (AB 32, Chapter 488,
Statutes of 2006) and the mandatory GHG registration
requirements, The California Climate Action Registry closed in
December 2010. The Climate Registry formed as the successor
agency. It is a nonprofit organization, whose board of
directors comprises over 50 representatives from U.S. states
and Canadian provinces and territories. The Climate Registry
offers tools and services for organizations to measure, verify
and report the carbon in their operations. According to the
author, the registry is already doing much of the work
outlined in the bill.
4)Suggested Clarification. This bill allows registrants to
qualify for incentives to reduce GHG emissions consistent with
the AB 32 investment plan. The author may wish to consider an
amendment that clarifies registrants must also meet all other
requirements of incentive programs and are not given funding
priority by participating in the registry.
Analysis Prepared by:Jennifer Galehouse / APPR. / (916)
319-2081
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