BILL ANALYSIS
AB 2037
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator S. Joseph Simitian, Chairman
2009-2010 Regular Session
BILL NO: AB 2037
AUTHOR: V.M. Perez
AMENDED: April 13, 2010
FISCAL: Yes HEARING DATE: June 28, 2010
URGENCY: No CONSULTANT: Randy Pestor
SUBJECT :
SUMMARY : AIR POLLUTION
Existing law :
1) Requires the Public Utilities Commission (PUC) to establish
a greenhouse gas (GHG) emission performance standard by
February 1, 2007, for all baseload generation of load
serving entities, and requires the State Energy Resources
Conservation and Development Commission (CEC) to establish
the standard by June 30, 2007, for local publicly-owned
electric utilities. Enforcement of the standard must begin
immediately upon establishment of the standard. (Public
Utilities Code 8340 et seq.).
2) Provides the California Air Resources Board (ARB) with
primary responsibility for control of mobile source air
pollution, including adoption of rules for reducing vehicle
emissions and the specification of vehicular fuel
composition. (Health and Safety Code 39000 et seq. and
39500 et seq.). The ARB must coordinate efforts to attain
and maintain ambient air quality standards. (39003). ARB
must also issue guidance to air pollution control districts
(APCDs) and air quality management districts (AQMDs) on
permitting or certifying electrical generation
technologies, which must provide guidance for addressing
best available technology (BACT) technology determinations.
(41514.10).
3) Provides that APCDs and AQMDs have primary responsibility
for controlling air pollution from all sources, other than
emissions from mobile sources, and establishes certain
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powers, duties, and requirements for those districts.
(40000 et seq.).
4) Requires every air pollution control district in a federal
nonattainment area for any national ambient air quality
standard to establish by regulation a system by which air
contaminant emission reductions that are to be used to
offset future emission increases can be banked prior to use
to offset future emission increases. The system must
provide that only those emission reductions not otherwise
required by any federal, state, or district requirement are
approved by the district before they may be banked and used
to offset future emission increases. (40709). The system
must meet certain requirements (e.g., identification of
tracking sources possessing emission credit balances,
periodic analysis of increases or decreases in emissions
occurring when credits are used, procedures for emission
reductions credited to the bank or accruing to internal
accounts). (40709.5).
This bill :
1) Prohibits a load-serving entity or local publicly-owned
electric utility from entering into, and the PUC from
approving, a long-term financial commitment for a new
electrical generating facility constructed in California or
in a shared pollution area if that facility does not meet
the following requirements:
a) If the facility was constructed in California, the
facility was constructed to meet BACT standards to
control air pollution that applied at the time
construction began in the air basin in California in
which the facility was constructed. Offsets to mitigate
air pollution from operation of the facility must have
been obtained for any pollutant determined to be
nonattainment of federal ambient air quality standards
by the United States Environmental Protection Agency
(USEPA) in the air basin where the facility was
constructed, at the time construction began.
b) If the facility was constructed outside of California
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in a shared pollution area, the facility was constructed
to meet BACT standards to control air pollution that
applied at the time construction began in the air basin
in California adjacent to the facility. Offsets must be
obtained based on the federal ambient air quality
standards in the air basin in California adjacent to the
facility at the time construction began.
c) Prohibits offsets under the above provisions if air
pollution emissions are otherwise fully mitigated by
other measures.
2) Requires the PUC, CEC, APCDs, AQMDs, and ARB to explore
with federal agencies and other governments, methods to
encourage recognition by all relevant agencies of offsets
achieved anywhere in a shared pollution area and the use of
cross-border trading of offsets, emission reduction
credits, and available mitigation funds.
3) Provides definitions for certain terms, including a "shared
pollution area" (an area encompassing California and
another state or country, determined by USEPA to share air
pollution if the air pollution emitted in that area, but
not within California, affects public health in
California).
COMMENTS :
1) Purpose of Bill . According to the author, "Air emissions
produced by power generation plants on the other side of
the CA border create negative impacts on the air quality in
the adjacent air basins/air sheds, affecting public health
and the quality of life for the residents of the region.
Current law does not prohibit a domestic utility company
from importing power from power plants sited in locations
that do not conform to our state's strong air quality
standards."
The author notes that Imperial County officials are concerned
over air pollution and public health impacts associated
with power plant siting, and the officials have sought to
maintain a dialogue with domestic and foreign partners
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about how to mitigate air pollution from the other side of
state and national borders. According to the author,
"Efforts by Imperial County officials and U.S. Federal
officials have resulted in retrofits and the installation
of best available control technology (BACT) on the La
Rosita facility. SEMPRA, the owner of Termoelectrica,
agreed to construct that plant with BACT. However, neither
of these companies procured the emissions offsets that
would have been required had the plants been built in
California. AB 2037 is intended to address adverse air
pollution impacts by only authorizing the approval of
energy contracts to out-of-state power plants that meet
California emissions and offsets standards. Specifically,
this bill would require facilities sited near the
California border regions to meet best available control
technology standards."
2) Opposition and support concerns . According to opponents,
some have "recently sued the United States Environmental
Protection Agency in an effort to get the Imperial County
[APCD] to adopt more strict rules on particulate pollution.
This bill would allow the county to offset particulate
pollution by simply purchasing cheap and completely
unverifiable credits from Mexico, completely undermining
efforts by the public health community to get actual
pollution reductions in the county with the worst asthma
hospitalization rate in the nation."
According to the Imperial County board of supervisors, in
supporting AB 2037, "The [USEPA] holds this region
responsible for the quality of our air, yet they have not
given us any tools to deal with American companies who
build facilities just south of the border in an effort to
escape our more stringent standards. With this proposed
law in place, it would be difficult for new power plants to
be built with the intent to export power into California
unless they are constructed to meet all California
standards, including the procurement of offsets."
3) Outstanding issues . First, AB 2037 references new
electrical generating facilities and provides a definition
for that term to be an electrical generating facility
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constructed after January 1, 2011. However, other
provisions of this bill apply "if the facility was
constructed." To avoid confusion, amendments are needed to
simply reference "new electrical generating facility" and
clarify that this term refers to an electrical generating
unit permitted after that date.
Second, AB 2037 includes a definition for "shared pollution
area" as an area encompassing California and another state
or country determined by USEPA to share air pollution
emitted in that area, but not within California, that
affects public health in California. However, other
provisions of this bill apply to an "air basin in
California adjacent to the facility." To ensure consistent
terms, the definition of "shared pollution area" needs
clarification, (e.g., air sheds). Also, the USEPA
Administrator has authority under the federal Clean Air Act
to designate an "air quality control region" for an
interstate area (42 U.S.C. 7407) (the Act also includes
provisions for interstate pollution abatement (42 U.S.C.
7426), international air pollution (42 U.S.C. 7415), and
international border emissions (42 U.S.C. 7509a)), so it
may be appropriate for USEPA, ARB, and affected local
governments to address these international air quality
issues through those provisions of federal law.
Third, offset provisions in AB 2037 are unclear and appear to
allow offsets to be obtained in California for a facility
constructed in another state or country, or obtained in
another country for a facility constructed in California.
Since it is uncertain how these offsets could be verified
under federal and state law, provisions relating to offsets
should be stricken from this bill.
Fourth, since current law already addresses requirements for
facilities in California, AB 2037 should focus on BACT for
facilities permitted in another state or country (any
reference to a facility in California, if needed, should
ensure that the facility meets all air pollution control
district, state, and federal requirements, and that
definitions are consistent with those laws).
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SOURCE : Imperial County
SUPPORT : American Lung Association, Breathe California,
California Air Pollution Control Officers
Association, California Rural Legal Assistance
Foundation, Clean Air Initiative, Economic
Research Institute - Imperial County, Imperial
County Board of Supervisors, Imperial
Irrigation District, San Joaquin Valley Latino
Environmental Advancement Project, Seeley
Citizens United, Sierra Club California, South
Coast Air Quality Management District, The
Institute for Socio-Economic Justice and
Progressive Community Development, Inc., Union
of Concerned Scientists
OPPOSITION : Californian Communities Against Toxics,
California Environmental Rights Alliance,
California Safe Schools, Coalition for a Safe
Environment, Comite Pro Uno, Del Amo Action
Committee, Greenaction, Just Transition
Alliance, Pacoima Beautiful, Society for
Positive Action