BILL ANALYSIS �
AB 1180
Page 1
Date of Hearing: April 26, 2011
ASSEMBLY COMMITTEE ON WATER, PARKS AND WILDLIFE
Jared Huffman, Chair
AB 1180 (Bradford) - As Introduced: February 18, 2011
SUBJECT : Coastal powerplants: Once-through cooling
SUMMARY : Requires the State Water Resources Control Board
(SWRCB) to do an economic analysis of ratepayer impacts from
measures it required to protect the marine environment from the
impacts of powerplants utilizing once-through cooling (OTC).
EXISTING LAW
1) Requires, in accordance with the Federal Clean Water Act
(CWA), that the location, design, construction, and capacity of
new and existing cooling water intake structures on power plants
reflect the best technology available (BTA) to minimize the harm
or killing of fish, shellfish and other aquatic organisms.
2) Designates the SWRCB as the statewide water quality planning
agency and authorizes the SWRCB to implement provisions of the
federal CWA, including provisions related to BTA requirements
for existing power plants employing OTC.
FISCAL EFFECT : Unknown
COMMENTS :
The Federal CWA Section 316(b) requires that the location,
design, construction, and capacity of new and existing cooling
water intake structures on power plants reflect the best
technology available to minimize the harm or killing of fish,
shellfish and other aquatic organisms. In California, the SWRCB
is the agency authorized to implement provisions of the CWA,
including Section 316(b).
On May 4, 2010 the SWRCB adopted a Policy on the Use of Coastal
and Estuarine Waters for Power Plant Cooling (Policy), which
became final on October 1, 2010. The SWRCB's environmental
document explained the need for the Policy stating, "OTC can
cause adverse impacts when aquatic organisms are trapped against
a facility's intake screens (impinged) and cannot escape, or
when they suffer contact injuries that increase mortality.
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Likewise, smaller organisms, such as larvae and eggs, can be
drawn through a facility's entire cooling system (entrained) and
subjected to rapid pressure changes, chemical treatment systems,
and violent sheering forces, only to be discharged along with
the now heated cooling water and other facility wastewaters. The
State's active coastal power plants that use OTC maintain the
capacity to withdraw more than 15 billion gallons per day of
cooling water. Over the course of a year, billions of eggs and
larvae are effectively removed from coastal waters, while
millions of adult fish are lost due to impingement. These OTC
systems, many of which have been in operation for 30 years or
more, present a considerable and chronic stressor to the State's
coastal aquatic ecosystems by reducing important fisheries and
contributing to the overall degradation of the State's marine
and estuarine environments."
The stated intent of the Policy "is to ensure that the
beneficial uses of the State's coastal and estuarine waters are
protected while also ensuring that the electrical power needs
essential for the welfare of the citizens of the State are met."
The Policy acknowledges there are no applicable nationwide
standards for implementing CWA Section 316(b) for existing power
plants and establishes technology-based measures to reduce the
harmful effects associated with cooling water intake structures
on marine and estuarine life. The Policy applies to the 19
existing power plants (including two nuclear plants) that
currently employ a single-pass system, also known as OTC. Under
the Policy, "closed-cycle wet cooling" has been selected as BTA.
Unlike OTC, which draws cool water and living organisms from the
ocean and then discharges warm water back into it, closed-cycle
wet cooling recirculates the same water but uses cooling towers
or other means to reduce its temperature for reuse.
The SWRCB's Policy has been in development for at least five
years. Phase I of the Policy addresses new power plant units.
However, the most contentious issues have centered on Phase II,
which applies to existing OTC units. On December 7, 2005 the
SWRCB held a Phase II 316(b) Workshop in Oakland, California.
Various presentations were made concerning the degree of OTC
impacts, technologies for compliance, and issues of cost. For
example, one group, the California Council for Environmental and
Economic Balance (CCEEB), questioned the biological significance
of OTC effects and warned that there were very high retrofit
costs and increased operating and maintenance costs associated
with converting existing OTC units to wet/dry cooling tower
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systems. CCEEB gave retrofit cost estimates for the Los Angeles
Department of Water and Power (LADWP) San Onofre Nuclear
Generating Station of $465-$500 million to change to dry cooling
and $205-$400 million to change to wet cooling.
On April 17, 2006 the California State Lands Commission adopted
a Resolution regarding California OTC power plants. The
Resolution states that the Commission shall not approve leases
for new power facilities, leases for re-powering existing
facilities, or extensions or amendments of existing leases for
existing power facilities whose operations include OTC, unless
the power plant is in full compliance, or engaged in an
agency-directed process to achieve full compliance, with
requirements imposed to implement both CWA � 316(b) and
California water quality law, and with any additional
requirements imposed by state and federal agencies for the
purpose of minimizing the impacts of cooling systems on the
environment. The Resolution also states that the Commission
shall include in any extended lease that includes OTC systems a
provision to consider re-opening the lease, if an alternative,
environmentally superior technology exists that can be feasibly
installed.
In 2006 and twice in 2008, the SWRCB held public meetings to
discuss the scope, content and environmental analysis for the �
316(b) Policy. Thereafter, on April 14, 2009, Senator Corbett
introduced SB 42, which prohibited state agencies from
authorizing, approving, or certifying new powerplants or
industrial facilities using OTC and requiring the phase-out of
certain OTC facilities by January 1, 2015. SB 42 was later
amended to remove the phase-out of existing OTC facilities and
instead require the payment of a per gallon mitigation fee. In
its analysis of SB 42, the Senate Energy, Utilities and
Communications Committee stated, "This mandate would jump ahead
of the SWRCB's work on developing a statewide policy and
undermine its work product." SB 42 was held in Committee.
On July 9, 2009 the SWRCB issued notice that it would hold a
September 16, 2009, hearing on a proposed Policy and requested
comments. In response, over seventy groups and individuals,
representing community organizations, environmental protection,
industry, state and federal agencies, and the California Senate
sent letters. In its letter the LADWP claimed "impingement and
entrainment losses �from OTC] are not a significant factor
causing declines to California's coastal fisheries" and that
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"OTC compliance costs will be several hundreds of millions of
dollars for LADWP, and according to a NERA �economic consulting]
report, over $3 billion dollars to the electric utility
industry" and suggested the SWRCB adopt a "site-specific
cost-benefit analyses" in its Policy. Environmental groups, on
the other hand, maintained that there were "40-50 years of
marine life impacts due to OTC, where adjacent ecosystems have
suffered a long history of entrainment and impingement.
Eliminating this significant impact on marine life may allow
depleted or 'overfished' species to recover to population
abundance well beyond what we see in population assessments
today."
As reference above, the SWRCB adopted its Policy on May 10, 2010
and submitted it on August 10, 2010 to the Office of
Administrative Law (OAL) for approval. The Policy recognized
that because the "Los Angeles region presents a more complex and
challenging set of issues, it is anticipated that more time
would be needed to study and implement replacement
infrastructure solutions." The Policy allowed the Greater Bay
Area and San Diego regions until 2017 to comply while providing
the Los Angeles region until 2020. On August 20, 2010 while the
SWRCB Policy was pending with OAL, the Assembly Committee on
Utilities and Commerce gutted and amended a Committee bill, AB
1552, in order to allow municipally-owned coastal powerplants
until December 31, 2031 to comply with the SWRCB's Policy. AB
1552 was later withdrawn.
On September 30, 2010 the SWRCB issued notice that it would
consider a proposed amendment to the Policy and invited public
comment. Among other provisions, the proposed amendment would
have allowed the LADWP Haynes Generating Station and Harbor
Generating Station and the Dynegy Moss Landing Power Plant,
under certain circumstances, to continue to use OTC until their
units reached the end of their useful life and to, instead,
submit mitigation funds in the amount of three dollars per
million gallons of water withdrawn, payable annually. In
response, over sixty groups and individuals, representing
community organizations, environmental protection, industry,
federal agencies, and others sent letters. At its December 14,
2010 hearing the SWRCB rejected the amendment.
Under the SWRCB Policy, a Statewide Advisory Committee on
Cooling Water Intake Structures (SACCWIS) was created to "ensure
that implementation plans and schedules established by the
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Policy are realistic and will not cause disruption to the
State's electrical power supply." The SACCWIS includes
representatives from the California Energy Commission,
California Public Utilities Commission, California Coastal
Commission, California State Lands Commission, California Air
Resources Board, California Independent System Operator, and the
SWRCB. One task of the SACCWIS is to review the implementation
plans and schedules that power plant owners and operators were
required to submit by April 1, 2011 to ensure that the deadlines
in the Policy account for local area and grid reliability,
including permitting constraints. The SACCWIS must report to the
SWRCB with recommendations no later than October 1, 2011. The
SWRCB may then direct staff to amend the Policy, if needed. The
SACCWIS will continue to meet and provide annual reports to the
State Water Board until the Policy has been fully implemented.
On April 1, 2011, LADWP submitted a 54-page Implementation Plan
(IP) to the SACCWIS. In that IP, LADWP requested to be allowed
to replace its OTC units on an extended schedule at a sequenced
"pace of two repowers per decade" based on a unit-by-unit rather
than a facility basis with the final unit coming off-line in
approximately 24 years, providing there are no delays in the
process. The LADWP IP also addressed demographics and rates in
the Los Angeles area stating that "nearly three quarters of a
million individuals (725,196), or about 19.1% of Angelenos, live
in poverty." The IP asserts that the average median household in
the City of Los Angeles ($48,570) is lower than the statewide
median and also other service territories such as San Diego Gas
& Electric ($60,354) and Southern California Edison ($57,033).
The IP closes by advising that due to the "demographics of the
City of Los Angeles, even moderate rate increases will have a
severe impact on LADWP's ratepayers. Rate increases that may
result from OTC compliance will be in addition to baseline rate
increases intended to cover fuel, operation and maintenance
costs."
Support Arguments : Supporters state this bill is needed in
order to require the SWRCB to determine the potential cost to
utility rate payers of the Policy, including the timelines for
implementing the Policy, and for state regulators and state
agencies to better assess the relationship between new
regulations placed on utilities and the funding sources, often
increased utility rates, used to comply with those regulations.
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Opposition Arguments: The opponents of this bill state that it
will require the SWRCB to spend extremely scarce funds to
conduct analyses that have already been completed in depth as
part of the extensive process used to adopt the Policy.
Opponents state that economics and ratepayer impacts were
specific elements of two separate independent studies
incorporated into the Policy's Substitute Environmental
Document, which itself provided assessments of cost increases to
ratepayers under different industry scenarios.
SWRCB staff indicate approximately $556,000 was previously spent
conducting two economic impact analyses of the draft Policy, not
including staff time. SWRCB Staff indicate an additional
$300,000 and one staff person would be needed to implement this
bill.
Suggested Amendments : In light of the concerns raised by SWRCB
Staff, the author and the Committee may wish to consider an
amendment that eliminates the requirement for an economic report
but instead provides LADWP with a date certain as to when the
SWRCB may, or may not, amend the Policy with respect to
municipally-owned power plants.
REGISTERED SUPPORT / OPPOSITION :
Support
Anthony
California Chamber of Commerce
E Street Cold Logistics
Robert Smola, President Konoike-Pacific
See's Candies
The Downtown Properties
The Trident Center
Opposition
California Coastkeeper Alliance
California League of Conservation Voters
Clean Water Action California
Heal the Bay
Natural Resources Defense Council
Orange County Coastkeeper
Pacific Coast Federation of Fishermen's Assocs.
Pacific Environment
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Planning and Conservation League
Sierra Club of California
Southern California Watershed Alliance
Surfrider Foundation
The Ocean Conservancy
Analysis Prepared by : Tina Cannon Leahy / W., P. & W. / (916)
319-2096