BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 2037|
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THIRD READING
Bill No: AB 2037
Author: V. Manuel Perez (D) and Salas (D)
Amended: 7/15/10 in Senate
Vote: 21
SENATE ENERGY, U.&C. COMMITTEE : 7-2, 6/15/10
AYES: Padilla, Corbett, Florez, Kehoe, Lowenthal,
Simitian, Wright
NOES: Dutton, Strickland
NO VOTE RECORDED: Cox, Oropeza
SENATE ENV. QUALITY COMMITTEE : 5-2, 6/28/10
AYES: Simitian, Corbett, Hancock, Lowenthal, Pavley
NOES: Runner, Strickland
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 44-26, 5/10/10 - See last page for vote
SUBJECT : Electricity: air pollution
SOURCE : County of Imperial
DIGEST : This bill prohibits a load-serving entity or
local publicly-owned electric utility from entering into,
and prohibits the Public Utilities Commission from
approving for an electrical corporation, a long-term
financial commitment with or for a new electrical
generation facility constructed in California, or in a
shared pollution area, as defined, that does not meet
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specified air pollution criteria.
ANALYSIS :
Existing law:
1. Requires air districts to adopt and implement local and
regional programs to reduce air pollution and to achieve
state and federal ambient air standards.
2. Prohibits the Public Utilities Commission (PUC) from
approving a long-term financial commitment by an
electrical corporation, unless any baseload generation
supplied under the long-term commitment complies with
the California Energy Commission's greenhouse gas
emission performance standards.
This bill prohibits a load-serving entity or local publicly
owned electric utility from entering into, and prohibits
the PUC from approving, a long-term financial commitment
with or for a new electrical generating facility
constructed in California or in a shared pollution area if
that facility does not meet the following criteria:
1. If the new electrical generating facility is in
California, the facility meets best available control
technology (BACT) standards, to control air pollution
emissions from the operation of the facility, and
complies with air pollution control district or air
quality management district rules and regulations, and
state and federal law.
2. If the new electrical generating facility is outside of
California in a shared pollution area, the facility
meets BACT standards, to control air pollution emissions
from the operation of the facility, that apply in the
air basin in California adjacent to the facility.
This bill also defines "new electrical generating facility"
as an electrical generating unit for which all legally
required permits have been received after January 1, 2011.
If an electrical generating unit is added to an existing
powerplant after January 1, 2011, only the incremental
capacity from that unit added after January 1, 2011, is a
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new electrical generating facility. Lastly, this bill
defines "shared pollution area" as an airshed encompassing
a portion of California and a portion of an adjacent state
or country, ad determined by the United States
Environmental Protection Agency.
Comments
According to the author's office, the purpose of this bill
is to deter the building of powerplants that do not comply
with California's air pollution standards, when the
powerplant shares an air basin with Californians. Mexico
has more lenient building and air-emission standards than
California. There is concern that California's growing
demand for electricity will encourage more powerplants to
be built in Mexico, where the regulations are less
stringent.
Some power plants located in Mexico reside in the same air
basin as California's border region. As a result, the
adverse air emissions generated from the Mexico-based power
plants affect California residents. By disallowing a
California utility from engaging in a long-term contract
with dirty-burning power plants, it might provide an
incentive for any new powerplants on the Mexico side of the
border to comply with California's BACT and air pollution
control standards.
Three electricity generation facilities are located near
Mexicali, about three miles south of the international
border and about 12 miles southwest of Calexico,
California. The Termoelectrica de Mexicali plant, owned by
Sempra Energy, is a 500-megawatt (MW) facility that
produces electricity for export into United States.
InterGen owns and operates the La Rosita 750-MW plant and
Energia de Baja California, which are located on a common
site and referred to as the InterGen Complex. Half of the
electricity from the InterGen Complex is generated for use
within Mexico and the remaining half is produced for export
into the United States. InterGen contracted with the
Mexican utility to produce electricity for Mexico for a
guaranteed fixed price for 25 years. The InterGen Complex
producing this power meets Mexican, but not California,
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clean air requirements.
InterGen's Complex emits approximately 1,900 tons of
nitrous oxide annually, but the Sempra plant in Mexicali
produces only 190 tons annually. InterGen counters that its
bid on a contract to supply power to Mexico was based on
the requirement that bidders must comply with Mexican air
regulations, and now that the contract has been awarded, no
changes are allowed to the contract except as specifically
provided in the contract. Thus, the company claims that it
would be difficult to shut down its operation to install
BACT, and it would be cost prohibitive given the
circumstances under which the contract was bid. InterGen
further contends that its Mexicali plant is one of the
cleanest in Mexico and is cleaner than more than 50 percent
of the plants currently operating in the United States and
California. As such, this bill does not apply to existing
power plants and only to new plants constructed after
January 1, 2011, or plants that add incremental capacity
after January 1, 2011.
Comments
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."
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 8/4/10)
County of Imperial (source)
American Lung Association
Breathe California
California Air Pollution Control Officers Association
California Rural Legal Assistance Foundation
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Imperial Irrigation District
Sierra Club
South Coast Air Quality Management District
Southern California Public Power Authority
Union of Concerned Scientists
ASSEMBLY FLOOR :
AYES: Ammiano, Arambula, Bass, Beall, Block, Blumenfield,
Bradford, Brownley, Buchanan, Charles Calderon, Carter,
Chesbro, Coto, Davis, De Leon, Eng, Evans, Feuer, Fong,
Fuentes, Furutani, Galgiani, Hall, Hayashi, Hernandez,
Hill, Huber, Huffman, Jones, Lieu, Bonnie Lowenthal, Ma,
Monning, Nava, V. Manuel Perez, Portantino, Ruskin,
Salas, Skinner, Swanson, Torres, Torrico, Yamada, John A.
Perez
NOES: Adams, Anderson, Bill Berryhill, Tom Berryhill,
Blakeslee, Conway, Cook, Emmerson, Fletcher, Fuller,
Gaines, Garrick, Gilmore, Hagman, Jeffries, Knight,
Logue, Miller, Nestande, Niello, Nielsen, Silva, Smyth,
Audra Strickland, Tran, Villines
NO VOTE RECORDED: Caballero, De La Torre, DeVore, Harkey,
Mendoza, Norby, Saldana, Solorio, Torlakson, Vacancy
DLW:mw 8/4/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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