BILL ANALYSIS �
AB 2339
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator S. Joseph Simitian, Chairman
2011-2012 Regular Session
BILL NO: AB 2339
AUTHOR: Williams
AMENDED: June 25, 2012
FISCAL: Yes HEARING DATE: July 2, 2012
URGENCY: No CONSULTANT: Randy Pestor
SUBJECT : GEOTHERMAL TECHNOLOGIES
SUMMARY :
Existing law , under the Warren-Alquist State Energy Resources
Conservation and Development Act:
1) Creates the California Energy Commission (CEC) and requires
the CEC, among other things, to adopt an integrated energy
policy report (IEPR) every two years. The IEPR must
contain an overview of major energy trends and issues
facing the state, including supply, demand, pricing,
reliability, efficiency, and impacts on public health and
safety, the economy, resources, and the environment.
(Public Resources Code �25302).
2) Under the California Global Warming Solutions Act of 2006
(CGWSA), requires the California Air Resources Board (ARB)
to determine the 1990 statewide greenhouse gas (GHG)
emissions level and approve a statewide GHG emissions limit
that is equivalent to that level, to be achieved by 2020
and specifies certain requirements for achieving that
limit. (Health and Safety Code �38500 et seq.).
This bill , under the Warren-Alquist State Energy Resources
Conservation and Development Act:
1) Requires the CEC, in consultation with the Public Utilities
Commission, ARB and other stakeholders, to evaluate and
recommend policies and implementation strategies related to
overcoming barriers to the widespread deployment and use of
geothermal heat pumps and geothermal ground loop
technologies (geothermal technologies). In its evaluation
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the CEC must consider:
a) The quantitative costs and benefits to ratepayers to
more reliable or less costly gas or electrical service
through the use of geothermal technologies.
b) Existing statutory and permit requirements or other
legal impediments that impact the widespread use of
geothermal technologies.
c) The impact of widespread use of geothermal
technologies achieving CGWSA goals and achieving the
state's energy efficiency goals.
2) Requires the CEC to include the above evaluations and
recommendations in the IERP that are required to be adopted
for calendar year 2013.
COMMENTS :
1) Purpose of Bill . According to the author, "AB 2339 builds
off existing work by directing CEC, in consultation with
the PUC, ARB and other stakeholders, to evaluate and
address existing barriers to the widespread deployment of
geothermal heat pumps and geothermal ground loop
technologies."
2) Background . AB 1905 (Bosco) Chapter 139, Statutes of 1980,
provided for the allocation of revenues distributed to the
state under the federal Mineral Lands Leasing Act of 1920
with respect to activities by federal agencies under the
federal Geothermal Steam Act of 1970. (Public Resources
Code �3800 et seq.). All revenues received by the state
under these federal programs for these activities are
deposited in the Geothermal Resources Development Account
(GRDA) and appropriated for eligible program activities.
The program objectives are to: a) reduce dependence on
fossil fuels and stimulate the state's economy through
geothermal resource development; b) mitigate adverse
impacts caused by geothermal development; c) provide
financial assistance to local governments to offset public
service and facility costs necessitated by geothermal
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resource development; and d) maintain renewable resource
productivity through investment of the proceeds. Many of
the projects funded by the CEC were for systems that
provide space heating and hot water through the direct use
of geothermal fluids. With revisions to the program,
funding has included financial assistance for research,
development and planning.
A GRDA grant recently funded a July 2011 CEC report titled
"Project negatherm for ground source heat pumps: improving
the geothermal borehole drilling environment in
California." (CEC 500-2011-025). According to this
report, a typical ground source heat pump (GSHP) system has
three main components:
a) The loop field - a series of pipes, typically
constructed of highdensity polyethylene (HDPE) that
circulates a fluid between the ground source heat pump
unit and the earth to transfer heat.
b) The ground source heat pump unit an electric heat
pump that exchanges heat between the fluid in the earth
loop and the air that conditions the home/building.
c) The air delivery/distribution system - standard ducts
that deliver conditioned air throughout a home or
building.
The CEC 2011 report notes the following distinction between
"open" or "closed" loop GSHP systems: "Closed loop systems
continuously circulate a fluid between the heat pump and
the loop field, without the loss of fluid. Open loop
systems are designed to take advantage of local water
sources by withdrawing water from a well or pond, passing
it through a heat exchanger, and then returning the
warmed/cooled water to an aquifer or well."
The 2011 CEC report notes that "Due to the nature of the
technology, GSHP systems encounter a number of regulatory
issues, including but not limited to: drilling,
permissible fluids used in the GSHP loop field, and
borehole sealing."
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According to the 2011 CEC report, "Ground source heat pumps
can play an important role in reducing electricity demand
and increasing efficiency in residential and commercial
buildings, but have made little impact in California. Oak
Ridge National Lab estimates that a moderately aggressive
adoption of ground source heat pumps throughout American
building practices would yield annual energy savings of 3.4
to 3.9 quad Btu. At current electricity prices, these
represent savings between $33 and $38 billion in retail
utility bills and far exceed current combined renewable
energy contributions from solar photovoltaic, wind and
geothermal power."
3) More study and recommendations needed ? The extensive July
2011 CEC 336-page study noted above was based on the
following objectives: a) review relevant literature; b)
compile permit regulation in California's 58 counties, and
other municipal districts and states; c) develop
methodologies for stakeholder interviews; d) interview
industry stakeholders; e) convene an industry advisory
board; f) identify technical and financial hurdles; g)
conduct field research on commercial and residential
projects; h) research the latest innovative finance models;
i) devise and conduct surveys of consumers and driller
groups; and j) develop a resource web portal containing
project research findings for industry and consumers.
The report contains 23 recommendations covering issues such as
state agency jurisdiction, permitting, contractor
licensing, and property taxes.
Is the AB 2339 study necessary given the exhaustive
information and recommendations contained in the CEC July
2011 report? If the Committee believes this bill is
needed, then the CEC should be required to consult with
local government representatives, and the term "widespread"
should be stricken from this bill.
SOURCE : California Geothermal Heat Pump Coalition
SUPPORT : Air Connection, Bosch Thermotechnology Corp.,
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California Groundwater Association,
ClimateMaster; Colorado Geo Energy and Heat
Pump Association, Crystal Air; Desert
GeoExchange, Energy Control Inc., Enertech
Global LLC, Environmental Defense Center, Gaia
Geothermal LLC, Geothermal Exchange
Organization, Geothermal National &
International Initiative, Geothermal Resource
Group, Ground Source Energy NW, HeatSpring
Learning Institute, Martin Energetics, Meline
Engineering Corp., Plumas-Sierra Rural Electric
Cooperative, WaterFurnace
OPPOSITION : None on file