BILL ANALYSIS �
AB 13 X1
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Date of Hearing: March 2, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 13 X1 (V. Manuel Perez) - As Amended: March 1, 2011
Policy Committee: Natural �
ResourcesVote:8-1
Urgency: No State Mandated Local Program: �
No Reimbursable: No
SUMMARY
This bill expands existing siting and permitting provisions for �
renewable energy projects and makes changes to the planning and �
permitting of renewable energy projects.
FISCAL EFFECT
1)Fully reimbursed but unknown costs, possibly in the tens of �
millions of dollars, to implement wildlife habitat mitigation �
projects within the Desert Renewable Energy Conservation Plan �
(DRECP) planning area. (Renewable Energy Resources �
Development Fee Trust Fund (RERDF Trust Fund), fully �
reimbursed by private funds.)
2)Additional annual fee revenue to Department of Fish and Game �
(DFG) in the millions of dollars. For example, in the �
calendar year, DFG has about 200 renewable energy projects �
that may require California Endangered Species Act (CESA) �
incidental take permits in the calendar year. Should half of �
these projects pay the $75,000 CESA fee, the department would �
collect $7.5 million. (Fish and Game Preservation Fund �
(FGPF).)
3)Negligible costs to DFG to expand the types of renewable �
energy projects in the DRECP planning area for which DFG may �
design and implement mitigation projects. (FGPF.)
4)Absorbable and reimbursable costs to California Energy �
Commission (CEC) to hire third-party consultants for �
permitting analysis. (Energy Resources Program Account �
(ERPA), fully reimbursed by private funds.)
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5)Cost to CEC during a two-year period of approximately $8 �
million to CEC for contract consultants to develop one or more �
natural community conservation plans (NCCPs) for the San �
Joaquin Valley, should such work be undertaken. While these �
costs seem high, CEC indicates the estimate is based on cost �
it has incurred developing the Desert Renewable Energy �
Conservation Plan. (ERPA or GF. Presumably, these costs would �
come from ERPA, the CEC's main program account. However, CEC �
indicates that the energy surcharge-the source of ERPA funding �
and statutorily capped-will produce insufficient revenue in �
the budget year to cover the costs that may result from the �
requirements of this bill.)
6)Ongoing costs to the CEC of about $600,000 to $800,000 �
(equivalent to 4 PY) to coordinate, manage, and support �
development and implementation of one or more NCCPs for the �
San Joaquin Valley, should such work be undertaken. ERPA or �
GF.
7)Ongoing costs to DFG, in the range of the low hundreds of �
thousands of dollars, to enter into NCCP planning agreements �
for the San Joaquin Valley and to support development the �
NCCPs, should such work be undertaken. (FGPF.) (DFG was �
unable to provide an estimate of the costs it will incur for �
this work. However, it is reasonable to assume that DFG will �
face costs somewhat lower than related costs faced by CEC.)
8)One-time costs of $7 million to CEC, upon appropriation, to �
provide grants to local governments in the San Joaquin Valley �
and desert regions to revise planning documents to facilitate �
development of renewable energy resources. (Renewable �
Resources Trust Fund (RRTF).)
9)Ongoing costs to CEC of approximately $150,000 (equivalent to �
1 PY) for staff to develop and process solicitations for �
grants to local governments in the San Joaquin Valley and �
desert regions to support revision of planning documents to �
facilitate development of renewable energy resources. �
(RRTF).)
SUMMARY (continued)
Specifically, this bill:
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1)Expands, to include wind and geothermal powerplants within the �
DRECP planning area, existing authority currently applicable �
only to proposed solar powerplants in the DRECP planning area. �
Specifically:
a) Authorizes the DFG to design and implement projects, �
such as land purchases and conservation easements, that can �
fully mitigate the negative effects on endangered and �
threatened species that result from construction and �
operation of renewable energy projects in the DRECP.
b) Authorizes a developer to pay a fee to DFG in an amount, �
as determined by the lead permitting agency, sufficient to �
fund projects within the DRECP to mitigate any negative �
effects of the powerplant on endangered or threatened �
species. This fee is in lieu of mitigation the developer �
would otherwise need to undertake directly.
2)Extends the date, from February 1, 2010, to February 1, 2011, �
by which a developer of a powerplant in the DRECP planning �
area must have had a complete application on file with CEC or �
the appropriate lead permitting agency in order to qualify for �
use of in lieu mitigation.
3)Expands, to include any proposed renewable powerplant in the �
state, DFG's authority to collect a one-time CESA fee �
($75,000, or less in certain cases, plus an additional $75,000 �
maximum, as needed, to cover additional permitting costs) to �
pay for DFG's cost to process incidental take permit �
applications. Currently, this authority is limited to �
developers of solar projects within the DRECP eligible to �
receive funding from the federal American Recovery and �
Reinvestment Act of 2009 (ARRA).
4)Expands, to apply any renewable energy project in the state, �
existing authority allowing a developer of an ARRA-eligible �
solar project in the DRECP planning area to pay a voluntary �
fee to the CEC to fund third-party permitting analysis.
5)Directs CEC to provide, upon appropriation, $7 million in �
grants to counties in the San Joaquin Valley and desert areas �
to revise planning documents to facilitate development of �
renewable energy resources.
6)States that the bill will take effect only if a related bill, �
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SB 2 X1 (Simitian), which increases the state's renewable �
portfolio standard, also becomes law.
COMMENTS
1)Rationale. According to the author, this bill will expedite �
permitting of a limited number of proposed renewable �
powerplants to be built in a resource rich but environmentally �
sensitive desert habitat. The author contends this bill will �
maintain environmental protections while allowing these �
projects to qualify for grant funding from ARRA. Once built, �
these proposed powerplants, the author claims, will benefit �
California by generating thousands of kilowatts of renewable �
electricity as well as thousands of jobs in areas suffering �
severe levels of unemployment.
The author notes that this bill extends to wind and geothermal �
projects the siting and permitting provisions made available �
to solar projects in previous legislation. The author further �
notes that the bill also will facilitate renewable energy �
development in the San Joaquin Valley by encouraging local �
planning.
2)Citing and Permitting Powerplants in California. Current law �
requires any thermal power plant with a capacity of 50 �
megawatts or greater to receive a license from CEC. CEC's �
licensing process generally takes 12 months and conforms to �
the California Environmental Quality Act (CEQA).
In addition to CEC's licensing requirements, powerplant �
developers must comply with the CESA. CESA prohibits the take �
(generally meaning death or serious harm) of endangered or �
threatened species. Under CESA, such harm to endangered or �
threatened species may be allowed if DFG issues an incidental �
take permit, which, among other things, requires a permit �
applicant to minimize harm and mitigate for damage.
One area of the state-the desert region covering part of the �
Colorado and Mojave deserts-shows particular promise as a �
location of renewable electricity powerplants. A plan for the �
region, known as the Desert Renewable Energy Conservation Plan �
planning, is being developed by DFG, CEC, the federal Bureau �
of Land Management and the U.S. Fish and Wildlife Service. The �
plan functions as an NCCP-a document designed to plan for the �
comprehensive protection of species and habitat. The goal of �
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the planning effort is to facilitate the siting of renewable �
energy projects while protecting and enhancing wildlife and �
other natural resources.
3)Special Fee Pays for CESA Permitting of Certain Solar �
Powerplants in the DRECP. Generally, DFG funds review of �
applications for incidental take permits from its existing �
appropriations. However, statute authorizes DFG to charge a �
developer of an ARRA-eligible solar powerplant in the DRECP a �
one-time CESA fee to cover DFG's cost to process the �
incidental take permit. The CESA fee is a one-time $75,000 �
charge, plus an optional one-time $75,000 fee maximum, as �
needed, to cover additional permit processing costs. The fee �
is to help expedite review and issuance of CESA permits.
4)Statute Allows Limited Use of In Lieu Mitigation. Statute �
allows in lieu mitigation for a small number of ARRA-eligible �
solar powerplants proposed to be built in the DRECP. This �
bill would expand the in lieu mitigation option to developers �
of ARRA-eligible wind and geothermal powerplants proposed to �
be built in the DRECP.
There are at least two advantages to allowing in lieu �
mitigation for the renewable projects eligible under this �
bill. First, in lieu mitigation can speed developer �
compliance with permitting requirements. This is because, �
absent in lieu mitigation, the developer must plan for and �
undertake mitigation. In lieu mitigation allows the developer �
to provide funding for mitigation up front, but leaves it to �
another entity to implement mitigation measures. Mitigation �
and development are thereby decoupled, allowing the developer �
to focus on powerplant construction and operation.
Second, in lieu mitigation may allow a more coordinated �
mitigation, as mitigation funds from a variety of projects can �
be pooled and focused on a comprehensive regional mitigation �
strategy. This strategic approach contrasts with a more �
piecemeal approach, in which a mitigation effort seeks to �
compensate for the negative effects of one development �
project. The potential for coordinated mitigation is �
especially great in an area, such as the DRECP planning area, �
for which a comprehensive regional mitigation strategy has �
been developed.
In lieu mitigation, however, also entails risk. A project, �
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such as a powerplant, may be built and operated before �
mitigation for negative effects happens. Presumably, the �
mitigation fee paid by the developer will be sufficient to �
finance mitigation projects that compensate for the effects of �
the development. And, presumably, those mitigation projects �
eventually will occur. However, it may be that, because of �
land speculation or inaccurate estimates of mitigation costs, �
the mitigation fee originally paid by a developer may not be �
sufficient to fund projects that fully mitigate the effects of �
the development. It is not clear that in such a case the �
state would be able to demand additional mitigation fees from �
a developer after the fact. Such a risk is lessened in an �
area such as the DRECP planning area for which there is a �
comprehensive environmental planning document.
5)Planning for Renewable Energy Development in the San Joaquin �
Valley. Like the state's desert areas, the San Joaquin Valley �
shows promise for renewable energy development. The Tehachapi �
Mountains have significant wind resources. The valley itself �
includes active and former agricultural lands that could be �
used for solar and other types of renewable energy production. �
An NCCP could facilitate renewable energy development in the �
San Joaquin Valley as the DRECP does for the state's desert �
regions.
6)Prior Legislation.
a) Chapter 9, Statutes of 2010 (SB 34 X8, Padilla) �
established, for ARRA-eligible solar powerplant in the �
DRECP, many of the siting and permitting provisions this �
bill seeks to extend to renewable energy projects, �
including the use of in lieu mitigation, DFG's CESA fees �
and the voluntary fee to fund third-party permitting �
analysis. SB 34 X8 passed the Assembly 71-3.
b) AB 1012 (V.M. Perez, 2010) contained many of the same �
siting and permitting provisions as this bill. When heard �
by this committee, AB 1012 dealt with the disposition of �
ARRA funds. The version of AB 1012 resembling this bill �
resulted from amendments in Senate committee. The bill �
failed passage on the Senate floor.
7)Support. The committee is unaware of support or opposition to �
this bill.
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Analysis Prepared by : Jay Dickenson / APPR. / (916) 319-2081