BILL ANALYSIS
AB 2498
Page 1
Date of Hearing: May 3, 2010
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Wesley Chesbro, Chair
AB 2498 (Skinner) - As Amended: April 5, 2010
SUBJECT : Combined heat and power systems
SUMMARY : Redefines combined heat and power (CHP) systems to be
systems that reduce emissions defined as greenhouse gases (GHGs)
within the Global Warming Solutions Act of 2006 (AB 32).
EXISTING LAW :
1)Establishes the Waste Heat and Carbon Emissions Reduction Act
of 2007 (AB 1613) which encourages the development of new CHP
systems in California with a generating capacity of not more
than 20 megawatts (MW).
a) Directs the California Pubic Utilities Commission (PUC),
publicly owned electric utilities (POUs), and the Energy
Commission (CEC) to establish policies and procedures for
the purchase of electricity from eligible CHP systems.
b) Directs the Air Resources Board (ARB) to report on the
reduction in emissions resulting from the increase of new
electricity generation from CHP.
THIS BILL :
1)Redefines a CHP system that is eligible for
customer-generator's onsite thermal demand to include GHG
emissions performance standards described in Section 38500 of
the Health and Safety Code.
2)Redefines the meaning of GHG that are reduced by CHP systems
to be the same as defined in Section 38505 of the Health and
Safety Code.
FISCAL EFFECT : Unknown
COMMENTS :
Background
AB 2498
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AB 1613 (Blakeslee, Chapter 713, Statutes of 2007) and amended
by AB 2791 (Blakeslee, Chapter 253, Statutes of 2008)
established the Waste Heat and Carbon Emissions Reduction Act,
which encourages the development of new CHP systems in
California with a generating capacity of not more than 20 MW.
The act directs the CEC to adopt by January 1, 2010, guidelines
establishing technical criteria for eligibility of CHP systems
for programs to be developed by the PUC and publicly owned
utilities. The PUC is also directed to establish a standard
tariff for the sale of electricity to electrical corporations
for delivery to the electrical grid, and to establish a pilot
program requiring electrical corporations to provide incentives
for the installation of qualifying CHP systems by nonprofit and
government entities.
CHP systems, also known as cogeneration, are systems that
produce electricity and thermal energy for heating and cooling
from an individual fuel input. When electricity is generated
without a CHP system, waste heat is often produced as a
byproduct, often via cooling towers. CHP systems capture some
of the waste heat and utilize it for industrial or residential
heating purposes, usually for water or air. If a customer of an
electrical utility that utilizes a CHP system produces more
electricity than is needed on-site, it may export this excess
electricity to the electrical grid for a feed-in tariff, paid by
the utility to the customer, if it meets certain requirements of
size and efficiency, among others.
In order to be eligible for a feed-in tariff program, a CHP
system must be designed to reduce waste energy, have a minimum
efficiency of 60 percent, have NOx emissions of no more than
0.07 pounds per megawatt-hour, be sized to meet the customer's
historic generation thermal load, operate in a manner consistent
with the generator's thermal load, and to be cost effective,
technologically feasible, and environmentally beneficial. In
addition, CHP systems eligible for net-metering onto the
electrical grid must be no greater than 20 MW in capacity.
Since the adoption of AB 1613, California's GHG standards have
changed with the ARB drafting of the Scoping Plan in 2008
pursuant to AB 32 (Nunez, Chapter 488, Statutes of 2006), which
included provisions for CHP as an energy efficiency tool. In
addition, SB 104 (Oropeza, Chapter 331, Statutes of 2009), added
nitrogen triflouride to the list of greenhouses gases regulated
by the ARB pursuant to AB 32. In order to maintain consistency
with current GHG regulations and language, CHP eligibility
AB 2498
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conditions described in statute could be updated in order to
reflect their GHG emissions performance more accurately.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file
Opposition
None on file
Analysis Prepared by : Jessica Westbrook / NAT. RES. / (916)
319-2092