BILL NUMBER: SB 376	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Simitian

                        FEBRUARY 26, 2009

   An act to amend Section 25303 of, to add Section 21090.2 to, and
to add Chapter 3.5 (commencing with Section 25250) to Division 15 of,
the Public Resources Code, relating to energy.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 376, as introduced, Simitian. Energy: State Energy Resources
Conservation and Development Commission: natural gas.
   (1) The Warren-Alquist State Energy Resources Conservation and
Development Act (act) establishes the State Energy Resources
Conservation and Development Commission (Energy Commission) and
requires the commission to prepare a biennial integrated energy
policy report containing specified information related to major
energy trends and issues facing the state, as well as a biennial
energy policy review. The act requires the commission to certify
sufficient sites and related facilities that are required to provide
a supply of electricity sufficient to accommodate projected demand
for power statewide.
   This bill would enact the Liquefied Natural Gas Market Assessment
Act and would require the Energy Commission, in consultation with
affected state agencies, including, but not limited to, the Public
Utilities Commission, the State Air Resources Board, the State Lands
Commission, the Department of Water Resources, and the California
Coastal Commission, to adopt and submit to the Legislature and the
Governor, on or before July 1, 2011, the Liquefied Natural Gas Market
Assessment Report of 2011 that would be incorporated into the
integrated energy policy report of 2009 and would contain specified
information. The Energy Commission would be required to prepare a
draft report, on or before April 1, 2011, to solicit public comments
in the preparation of the report, and to hold 2 public hearings, one
in Los Angeles and the other in the San Francisco Bay area, to
consider the results of the liquefied natural gas needs assessment
study and to provide an opportunity for public comment. The Energy
Commission would be required to include a Liquefied Natural Gas
Market Assessment Report in every integrated energy policy report
adopted after January 1, 2011.
   The Governor, or a state or local entity would be prohibited from
approving the construction or operation of an onshore or offshore
liquefied natural gas terminal in California until the Liquefied
Natural Gas Market Assessment Report of 2011 has been issued and
becomes final and all appeals have been exhausted, or November 1,
2011, whichever is earlier. By requiring a local official to
determine whether the report has been adopted, the bill would
increase the level of service provided by a local agency, thereby
imposing a state-mandated local program.
   The bill would require a liquefied natural gas terminal project
applicant to include in the application evidence that it has
consulted with the United States Department of Defense and its
impacted service components. For a project involving the construction
or operation of a liquefied natural gas terminal that has not
received a permit to operate on or before January 1, 2010, an
environmental impact report prepared for that project by a lead
agency would be required to contain specified information. By
requiring a local agency to prepare an environmental impact report
that contains specified information, the bill would increase the
level of service provided by a local agency, thereby imposing a
state-mandated local program.
   The Energy Commission would be required on or before March 31,
2010, to create a matrix on its Internet Web site containing
information related to the construction and operation of a liquefied
natural gas terminal project, and quarterly updates would be
required.
   (2) The act requires the Energy Commission, as a part of the
integrated energy policy report, to conduct electricity and natural
gas forecasting assessment activities.
   This bill would, in addition, require the Energy Commission to
include an assessment of California's ability to meet its
conservation, energy efficiency, and renewable energy goals and an
evaluation of the global energy markets.
   (3) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  The Legislature finds and declares all of the
following:
   (a) The state has a critical role in decisions regarding the
siting and design of new onshore and offshore infrastructure for the
importation of liquefied natural gas with regard to public health,
safety, and the environment.
   (b) California has a rich history of innovative and strong
environmental laws and should continue to strive for the best
protections possible.
   (c) Utilities in California are required to meet new demand
through energy efficiency programs before acquiring other sources of
electricity.
   (d) Accelerating the use of renewable energy resources wherever
feasible and ensuring a diverse and affordable portfolio of fuel
sources may minimize supply interruptions and increase reliability.
   (e) Decisions regarding the importation of liquefied natural gas
should be based on a comprehensive review of current and projected
natural gas supply and demand in California.
   (f) The possible importation of liquefied natural gas should be
reviewed as part of the state's integrated energy policy report,
which contains an overview of major energy trends and issues facing
the state, including supply, demand, and price.
  SEC. 2.  Section 21090.2 is added to the Public Resources Code, to
read:
   21090.2.  (a) In addition to any other requirements under this
division, for a project involving the construction or operation of an
onshore or offshore liquefied natural gas terminal in California
that has not received an approval or a permit to operate by a local,
state, or federal agency on or before January 1, 2010, an
environmental impact report shall include all of the following:
   (1) A comparative analysis of feasible alternative project
technologies pursuant to Section 15126.6 of Title 14 of the
California Code of Regulations.
   (2) An analysis of potential disproportionately high and adverse
human health or environmental effects on minority and low-income
populations.
   (3) A full life-cycle analysis of the impacts of greenhouse gases.

   (b) This section shall not be construed as a limitation on the
power of a public agency to otherwise disapprove the project pursuant
to any other provision of law.
   (c) This section shall not be construed as a limitation to comply
with any other requirements of this division or any other provision
of law.
  SEC. 3.  Chapter 3.5 (commencing with Section 25250) is added to
Division 15 of the Public Resources Code, to read:
      CHAPTER 3.5.  LIQUEFIED NATURAL GAS MARKET ASSESSMENT ACT


   25250.  This chapter shall be known and may be cited as the
Liquefied Natural Gas Market Assessment Act.
   25250.5.  For purposes of this chapter, the following definitions
apply:
   (a) "Liquefied natural gas" or "LNG" means natural gas cooled to
minus 259 degrees Fahrenheit so that it forms a liquid at
approximately atmospheric pressure.
   (b) "Onshore or offshore liquefied natural gas terminal in
California" means facilities located onshore or offshore in
California, designed to receive liquefied natural gas from oceangoing
vessels, including those facilities required for storage and
regasification of the liquefied natural gas, the marine vessels
associated with these facilities, and any new pipelines, including,
but not limited to, all new pipelines from these offshore or onshore
terminals to shore and facilities necessary or the transmission of
the regasified natural gas from those facilities, to the point of
interconnection with any existing natural gas transportation or
distribution system.
   25251.  (a) As a component of the integrated energy policy report
of 2009 adopted pursuant to subdivision (a) of Section 25302, the
commission shall conduct a study of the need for liquefied natural
gas imports to meet the state's energy demand at reasonable prices,
which shall be known as the Liquefied Natural Gas Market Assessment
Report of 2011.
   (b) On or before July 1, 2011, the commission shall complete and
submit to the Governor and the Legislature the Liquefied Natural Gas
Market Assessment Report of 2011, and shall incorporate the report
into the integrated energy policy report of 2009 adopted pursuant to
subdivision (a) of Section 25302.
   (c) In the preparation of the report, the commission shall consult
with affected state agencies including, but not limited to, the
State Air Resources Board, the Public Utilities Commission, the State
Lands Commission, the Department of Water Resources, and the
California Coastal Commission.
   (d) The report shall assess all of the following:
   (1) The future demand for natural gas in California, including,
but not limited to, natural gas as an alternative transportation
fuel.
   (2) The future supply of natural gas in California available from
domestic production and imported into California through interstate
pipelines, the supply available from domestic production within
California, and the supply available from foreign production and
imported into California through international pipelines from Mexico
and Canada, including any liquefied natural gas terminal proposed to
be built outside the state and the nation that would be the source of
natural gas imported into the state.
   (3) All supplemental sources of natural gas and natural gas
alternatives that can be reasonably expected to be available to meet
projected energy demand, including, but not limited to, conservation,
energy efficiency programs, and renewable energy resources.
   (4) Projections of the price for natural gas under reasonable
supply and demand circumstances.
   (e) The report shall consider the impact of reducing electricity
derived from coal pursuant to Chapter 3 (commencing with Section
8340) of Division 4.1 of the Public Utilities Code, and the potential
of demand reduction opportunities, including, but not limited to,
the upgrading and retrofitting of energy infrastructure, the role of
renewable energy, and greater efficiency in building codes.
   (f) The report shall include an analysis of what impact new fossil
fuel infrastructure will have on mandates on investor owned
utilities under any provision of law, including, but not limited to,
the California Renewables Portfolio Standard Program, Article 16
(commencing with Section 399.11) of Chapter 2.3 of Part 1 of Division
1 of the Public Utilities Code.
   (g) (1) On or before April 1, 2011, the commission shall prepare a
draft of the report and shall circulate the draft report to the
public.
   (2) Between April 15 and May 15, 2011, the commission shall hold
two public hearings, one in southern California and one in the San
Francisco Bay area. During the public hearings, the commission shall
accept public comment, testimony, and evidence on the draft report
for the purpose of creating a public record. The public may submit
written evidence to the commission on or before May 15, 2011.
   (h) (1) The final Liquefied Natural Gas Market Assessment Report
of 2011 shall include a finding based on the entirety of the
testimony and evidence submitted pursuant to paragraph (2) of
subdivision (g) as to whether California and North American natural
gas supplies projected as necessary to meet California's energy
requirement pursuant to the integrated energy policy report of 2009
can be attained at a reasonable price without the purchase of
additional supplies obtained by importing natural gas to an onshore
or offshore liquefied natural gas terminal in California.
   (2) The finding shall include an analysis of market price, retail
rates, market transparency, projected suppliers, location of
California and North American facilities, and quality of the natural
gas provided, as well as alternative scenarios for supplying domestic
natural gas through existing and planned pipelines, including
opportunities for conservation, efficiency, and renewable energy.
   (3) In reaching a finding that California and North American
supplies of natural gas for California markets will be sufficient,
the commission shall conclude, utilizing a substantial evidence
standard and a consideration of price, that energy supplies will be
adequate to meet California's energy needs in an economically
feasible manner.
   (i) (1) A person who complies with paragraph (2) may challenge the
findings of the Liquefied Natural Gas Market Assessment Report of
2011 by filing a writ of mandate for review pursuant to Section
25901.
   (2) To file a writ of mandate pursuant to paragraph (1), an
aggrieved person shall have appeared, in person or through a
representative, at one of the commission's public hearings, in person
or in writing, and informed the commission of his or her concerns,
or for good cause have been unable to do either.
   25252.  (a) For an integrated energy policy report adopted
pursuant to subdivision (a) of Section 25302 after January 1, 2011,
the commission shall include a Liquefied Natural Gas Market
Assessment Report as a part of the integrated energy policy report
that contains all of the following:
   (1) The assessments specified in subdivision (d) of Section 25251.

   (2) The impacts specified in subdivision (e) of Section 25251.
   (3) The analysis specified in subdivision (f) of Section 25251.
   (b) In the preparation of the Liquefied Natural Gas Market
Assessment Report, the commission shall consult with affected state
agencies, including, but not limited to, the State Air Resources
Board, the Public Utilities Commission, the State Lands Commission,
the Department of Water Resources, and the California Coastal
Commission.
   (c) (1) On or before August 1 of the year in which the commission
is required to adopt an integrated energy policy report pursuant to
subdivision (a) of Section 25302, the commission shall prepare a
draft of the Liquefied Natural Gas Market Assessment Report and shall
circulate the draft report to the public.
   (2) Between August 15 and September 15 of the year in which the
commission is required to adopt an integrated energy policy report
pursuant to subdivision (a) of Section 25302, the commission shall
hold two public hearings, one in southern California and one in the
San Francisco Bay area. During the public hearings, the commission
shall accept public comment, testimony, and evidence on the draft of
the Liquefied Natural Gas Market Assessment Report for the purpose of
creating a public record. The public may submit written evidence to
the commission on or before September 15 of that year.
   (d) (1) The final Liquefied Natural Gas Market Assessment Report
shall include a finding based on the entirety of the testimony and
evidence submitted pursuant to paragraph (2) of subdivision (c) as to
whether California and North American natural gas supplies projected
as necessary to meet California's energy requirement pursuant to the
integrated energy policy report can be attained at a reasonable
price without the purchase of additional supplies obtained by
importing natural gas to an onshore or offshore liquefied natural gas
terminal in California.
   (2) The finding shall include an analysis of market price, retail
rates, market transparency, projected suppliers, location of
California and North American facilities, and quality of the natural
gas provided, as well as alternative scenarios for supplying domestic
natural gas through existing and planned pipelines, including
opportunities for conservation, efficiency, and renewable energy.
   (3) In reaching a finding that California and North American
supplies of natural gas for California markets will be sufficient,
the commission shall conclude, utilizing a substantial evidence
standard and a consideration of price, that energy supplies will be
adequate to meet California's energy needs in an economically
feasible manner.
   (e) (1) A person who complies with paragraph (2) may challenge the
findings of the Liquefied Natural Gas Market Assessment Report by
filing a writ of mandate for review pursuant to Section 25901.
   (2) To file a writ of mandate pursuant to paragraph (1), an
aggrieved person shall have appeared, in person or through a
representative, at one of the commission's public hearings, in person
or in writing, and informed the commission of his or her concerns,
or for good cause have been unable to do either.
   25253.  (a) The Governor, or a state or local entity shall not
approve the construction or operation of an onshore or offshore
liquefied natural gas terminal in California until the Liquefied
Natural Gas Market Assessment Report of 2011 is issued and becomes
final and all appeals have been exhausted, or November 1, 2011,
whichever is earlier.
   (b) Notwithstanding any other provision of law, a state or local
permitting agency shall not use this chapter for the purpose of
limiting the acceptance, review, or processing of an application for
a permit while the Liquefied Natural Gas Assessment Report is pending
or while a judicial appeal of the report is pending.
   25254.  On or before March 31, 2010, the commission shall create a
matrix on its Internet Web site that meets, to the extent that data
are publicly available, all of the following requirements:
   (a) The matrix shall be in a format that allows the public to
contrast and compare each liquefied natural gas terminal, either
existing or proposed, that is located onshore or offshore anywhere in
California. The matrix shall also include information from
facilities located in Alaska, Canada, the west coast of the
continental United States, and the west coast of Mexico including
Baja California that may provide natural gas to California.
   (b) It shall include a summary of environmental impacts,
mitigation measures, and alternatives discussed in the environmental
impact report (EIR) completed for the project, along with an online
link to the EIR. For projects outside the state and nation a link to
an equivalent environmental review document.
   (c) For each existing and proposed land-based or offshore
liquefied natural gas terminal project, the matrix shall include the
following information: project location, project owner, project Web
site, project contact, project description, average natural gas
production capacity in cubic feet per day, the peak natural gas
production capacity in cubic feet per day, liquefied natural gas and
natural gas storage capacity, if any, the approximate project cost,
projected online date, and the siting process applicable to the
project.
   (d) The matrix shall be updated as information becomes available
and no less than quarterly and shall include the major project
components and the potential environmental impacts associated with
each land-based and offshore natural gas import terminal project
proposal that has filed an application or has publicly announced
plans to build a land-based or offshore terminal.
   (e) The commission shall post a new application for approval to
build and operate a natural gas import terminal in the state to the
matrix within 30 days after the filing of the application.
   25255.  An applicant for the construction or operation of a
liquefied natural gas terminal project shall provide evidence in its
application that it has consulted with the United States Department
of Defense and its impacted service components, and include within
the application a description of the consultation with regard to
potential impacts upon national security, including potential impacts
on the land, sea, and airspace identified by the Department of
Defense and its impacted service components, for conducting
operations or training, or for the research, development, testing,
and evaluation of weapons, sensors, and tactics.
  SEC. 4.  Section 25303 of the Public Resources Code is amended to
read:
   25303.  (a) The commission shall conduct electricity and natural
gas forecasting and assessment activities to meet the requirements of
paragraph (1) of subdivision (a) of Section 25302, including, but
not limited to, all of the following:
   (1) Assessment of trends in electricity and natural gas supply and
demand  ,  and the outlook for wholesale and retail
prices for commodity electricity and natural gas under current
market structures and expected market conditions  , including an
assessment of California meeting its conservation, energy efficiency,
and renewable energy   goals  .
   (2) Forecasts of statewide and regional electricity and natural
gas demand including annual, seasonal, and peak demand, and the
factors leading to projected demand growth, including, but not
limited to, projected population growth, urban development,
industrial expansion and energy intensity of industries, energy
demand for different building types, energy efficiency, and other
factors influencing demand for electricity. With respect to
long-range forecasts of the demand for natural gas, the report shall
include an evaluation of average conditions, as well as best and
worst case scenarios, and an evaluation of the impact of the
increasing use of renewable resources on natural gas demand.
   (3) Evaluation of the adequacy of electricity and natural gas
supplies to meet forecasted demand growth. Assessment of the
availability, reliability, and efficiency of the electricity and
natural gas infrastructure and systems, including, but not limited
to, natural gas production capability both in and out of state,
natural gas interstate and intrastate pipeline capacity, storage and
use, and western regional and California electricity and transmission
system capacity and use.
   (4) Evaluation of potential impacts of electricity and natural gas
supply, demand, and infrastructure and resource additions on the
electricity and natural gas systems, public health and safety, the
economy, resources, and the environment.
   (5) Evaluation of the potential impacts of electricity and natural
gas load management efforts, including end-user response to market
price signals, as a means to ensure reliable operation of electricity
and natural gas systems.
   (6) Evaluation of whether electricity and natural gas markets are
adequately meeting public interest objectives including the provision
of all of the following: economic benefits; competitive, low-cost
reliable services; customer information and protection; and
environmentally sensitive electricity and natural gas supplies. This
evaluation may consider the extent to which California is an element
within western energy markets,  global energy markets,  the
existence of appropriate incentives for market participants to
provide supplies and for consumers to respond to energy prices,
appropriate identification of responsibilities of various market
participants, and an assessment of long-term versus short-term market
performance. To the extent this evaluation identifies market
shortcomings, the commission shall propose market structure changes
to improve performance.
   (7) Identification of impending or potential problems or
uncertainties in the electricity and natural gas markets, potential
options and solutions, and recommendations.
   (8) (A) Compilation and assessment of existing scientific studies
that have been performed by persons or entities with expertise and
qualifications in the subject of the studies to determine the
potential vulnerability to a major disruption due to aging or a major
seismic event of large baseload generation facilities, of 1,700
megawatts or greater.
   (B) The assessment specified in subparagraph (A) shall include an
analysis of the impact of a major disruption on system reliability,
public safety, and the economy.
   (C) The commission may work with other public entities and public
agencies, including, but not limited to, the California Independent
System Operator, the Public Utilities Commission, the Department of
Conservation, and the Seismic Safety Commission as necessary, to
gather and analyze the information required by this paragraph.
   (D) Upon completion and publication of the initial review of the
information required pursuant to this paragraph, the commission shall
perform subsequent updates as new data or new understanding of
potential seismic hazards emerge.
   (b) Commencing November 1, 2003, and every two years thereafter,
to be included in the integrated energy policy report prepared
pursuant to Section 25302, the commission shall assess the current
status of the following:
   (1) The environmental performance of the electric generation
facilities of the state, to include all of the following:
   (A) Generation facility efficiency.
   (B) Air emission control technologies in use in operating plants.
   (C) The extent to which recent resource additions have, and
expected resource additions are likely to, displace or reduce the
operation of existing facilities, including the environmental
consequences of these changes.
   (2) The geographic distribution of statewide environmental,
efficiency, and socioeconomic benefits and drawbacks of existing
generation facilities, including, but not limited to, the impacts on
natural resources including wildlife habitat, air quality, and water
resources, and the relationship to demographic factors. The
assessment shall describe the socioeconomic and demographic factors
that existed when the facilities were constructed and the current
status of these factors. In addition, the report shall include how
expected or recent resource additions could change the assessment
through displaced or reduced operation of existing facilities.
   (c) In the absence of a long-term nuclear waste storage facility,
the commission shall assess the potential state and local costs and
impacts associated with accumulating waste at California's nuclear
powerplants. The commission shall further assess other key policy and
planning issues that will affect the future role of nuclear
powerplants in the state. The commission's assessment shall be
adopted on or before November 1, 2008, and included in the 2008
energy policy review adopted pursuant to subdivision (d) of Section
25302.
  SEC. 5.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
this act provides for offsetting savings to local agencies or school
districts that result in no net costs to the local agencies or school
districts, within the meaning of Section 17556 of the Government
Code.