BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    SB 1425


                                                                    Page  1





          SENATE THIRD READING


          SB  
          1425 (Pavley)


          As Amended  August 17, 2016


          Majority vote


          SENATE VOTE:  26-11


           ------------------------------------------------------------------ 
          |Committee       |Votes|Ayes                   |Noes               |
          |                |     |                       |                   |
          |                |     |                       |                   |
          |                |     |                       |                   |
          |----------------+-----+-----------------------+-------------------|
          |Natural         |9-0  |Williams, Jones,       |                   |
          |Resources       |     |Cristina Garcia,       |                   |
          |                |     |Gomez, Hadley, Harper, |                   |
          |                |     |McCarty, Mark Stone,   |                   |
          |                |     |Wood                   |                   |
          |                |     |                       |                   |
          |----------------+-----+-----------------------+-------------------|
          |Appropriations  |11-4 |Gonzalez, Bloom,       |Bigelow, Chang,    |
          |                |     |Bonilla, Bonta,        |Jones, Obernolte   |
          |                |     |Eggman, Eduardo        |                   |
          |                |     |Garcia, Quirk,         |                   |
          |                |     |Santiago, Weber, Wood, |                   |
          |                |     |McCarty                |                   |
          |                |     |                       |                   |
          |                |     |                       |                   |
           ------------------------------------------------------------------ 









                                                                    SB 1425


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          SUMMARY:  Requires the California Environmental Protection  
          Agency (CalEPA) to develop a registry of greenhouse gas (GHG)  
          emissions resulting from the water-energy nexus.  


          EXISTING LAW, under the California Global Warming Solutions Act  
          of 2006 (AB 32 (Núñez), Chapter 488): 


          1)Requires the Air Resources Board (ARB) to determine the 1990  
            statewide GHG emissions level and approve a statewide GHG  
            emissions limit that is equivalent to that level to be  
            achieved by 2020.


          2)Requires the ARB to adopt regulations to require the reporting  
            and verification of statewide GHG emissions and requires those  
            regulations, where appropriate and to the maximum extent  
            feasible, to incorporate the standards and protocols developed  
            by the California Climate Action Registry.


          3)Specifies that entities that voluntarily participated in the  
            California Climate Action Registry prior to December 31, 2006,  
            and have developed a GHG emissions reporting program, are not  
            required to significantly alter their reporting or  
            verification program, except as necessary to ensure complete  
            and accurate reporting.


          THIS BILL:  


          1)Requires CalEPA, in consultation with other relevant state  
            agencies and through a public stakeholder process, to develop  
            and administer a registry of GHG emissions resulting from the  
            water-energy nexus using the best available data.  









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          2)States that participation in the registry is voluntary and  
            open to any entity conducting business in the state.   
            Authorizes a participating entity to register its emissions,  
            including emissions generated outside the state, or an  
            entity-wide basis and to use the services of the Registry.  


          3)Authorizes CalEPA to enter into a contract with a qualified  
            nonprofit organization to develop and implement the registry.   



          4)Requires CalEPA or the nonprofit organization to: 


             a)   Help participating entities establish emissions  
               baselines; 


             b)   Encourage voluntary actions to increase water and energy  
               efficiency measures to reduce the carbon intensity of the  
               state's water system; 


             c)   Enable participating entities to record voluntary  
               entity-wide GHG emissions reductions in a consistent format  
               that is supported by third-party verification; 


             d)   Recognize, publicize, and promote participating entities  
               making voluntary reductions of GHG emissions; 


             e)   Recruit broad participation in the registry from all  
               economic sectors and regions in the state; and, 


             f)   Facilitate streamlined data reporting for relevant  








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               entities already reporting to the Climate Registry.  


          FISCAL EFFECT:  According to the Assembly Appropriations  
          Committee, this bill has annual ongoing costs of approximately  
          $130,000 for CalEPA to oversee the development of the registry  
          (General Fund or special fund).  CalEPA estimates annual  
          contracting costs of $250,000 for three years or more (General  
          Fund or special fund).  


          COMMENTS:  SB 1771 (Sher), Chapter 1018, Statutes of 2000,  
          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.  The  
          bill required the registry to perform various functions,  
          including adopting standards for verifying emissions reductions;  
          adopting a list of approved auditors that would verify emissions  
          reductions; establishing emissions reduction goals; designing  
          and implementing efficiency improvement plans; maintaining a  
          record of all emissions baselines and reductions; and,  
          recognizing, publicizing, and promoting entities that  
          participate in the registry.  SB 1771 established a governing  
          board comprised of the Secretary of the Resources Agency, the  
          Secretary of Environmental Protection, and five public members  
          appointed by the Governor.


          The California Climate Action Registry was required to, among  
          other things:  1) help various entities in the state to  
          establish emissions baselines; 2) encourage voluntary actions to  
          increase energy efficiency and reduce GHG emissions; 3) enable  
          participating entities to record voluntary GHG emissions  
          reductions made after 1990 in a consistent format that is  
          supported by third-party verification; 4) ensure that sources in  
          the state receive appropriate consideration for verified  
          emissions reductions under any future federal regulatory regime  
          relating to GHG emissions; 5) recognize, publicize, and promote  








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          registrants making voluntary reductions; and, 6) recruit broad  
          participation in the process from all economic sectors and  
          regions of the state.  


          The California Climate Action Registry closed in December 2010.   
          The Climate Registry formed as the successor agency to the  
          California Climate Action Registry.  The Climate Registry is a  
          nonprofit organization, whose board of directors comprises over  
          50 representatives from United States (U.S.) states and Canadian  
          provinces and territories.  It offers tools and services for  
          organizations to measure, verify, and report the carbon in their  
          operations.  This bill is modeled after the California Climate  
          Action Registry.


          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 (i.e., natural gas not used to produce  
          electricity).  The water sector uses electricity to pump, treat,  
          transport, deliver, and heat water.  CEC also found that the  
          most energy intensive uses of water in California are associated  
          with end uses by the customer (e.g., heating, processing, and  
          pressurizing water) and that 75% of the electricity and nearly  
          all of the natural gas use related to water in California is  
          associated with water heating.  The state's ongoing drought is  
          expected to cause increases in groundwater pumping, water  
          treatment, and water recycling, which could further increase  
          energy use associated with water.


          Electric utilities are required 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, Clean Energy Opportunities in California's Water  
          Sector, reports that although some water and wastewater  
          utilities independently report the sources of their electricity,  








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          the information is not compiled in a standardized format or  
          updated on a regular schedule across the water sector. 


          The report states that the data gap makes it 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 GHG emissions and the state's efforts  
          to decarbonize the electricity sector.


          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 for 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.




          Analysis Prepared by:                                             
                          Elizabeth MacMillan / NAT. RES. / (916) 319-2092  
                                                                         
          FN:  0004310