BILL ANALYSIS
------------------------------------------------------------
|SENATE RULES COMMITTEE | SB 28X|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 445-6614 Fax: (916) | |
|327-4478 | |
------------------------------------------------------------
UNFINISHED BUSINESS
Bill No: SB 28X
Author: Sher (D), et al
Amended: 4/23/01
Vote: 27 - Urgency
SENATE ENV. QUALITY COMMITTEE 7-0, 2/26/01
AYES: Sher, McPherson, Chesbro, Figueroa, Kuehl,
McClintock, O'Connell
SENATE ENERGY, U.&C. COMMITTEE : 9-0, 3/6/01
AYES Bowen, Morrow, Battin, Dunn, Poochigian, Sher,
Speier, Vasconcellos, Vincent
SENATE APPROPRIATIONS COMMITTEE : 8-0, 3/12/01
AYES: Alpert, Battin, Bowen, Johnson, Karnette, McPherson,
Perata, Speier
SENATE FLOOR : 37-1, 3/22/01
AYES: Ackerman, Alarcon, Alpert, Battin, Bowen, Brulte,
Chesbro, Costa, Dunn, Escutia, Figueroa, Haynes,
Johannessen, Karnette, Knight, Kuehl, Machado, Margett,
McPherson, Monteith, Morrow, Murray, O'Connell, Oller,
Ortiz, Peace, Perata, Polanco, Poochigian, Romero, Scott,
Sher, Soto, Speier, Torlakson, Vasconcellos, Vincent
NOES: McClintock
SENATE FLOOR : 26-11, 4/26/01
AYES: Alarcon, Alpert, Bowen, Burton, Chesbro, Costa,
Dunn, Escutia, Figueroa, Karnette, Kuehl, Machado,
Murray, O'Connell, Ortiz, Peace, Perata, Polanco, Romero,
Scott, Sher, Soto, Speier, Torlakson, Vasconcellos,
Vincent
NOES: Ackerman, Battin, Brulte, Johnson, Knight, Margett,
CONTINUED
SB 28X
Page
2
McClintock, Monteith, Morrow, Oller, Poochigian
ASSEMBLY FLOOR : 69-5, 4/23/01 - See last page for vote
SUBJECT : Energy siting of power plants: unemployment
insurance
SOURCE : Author
DIGEST : This bill contains a series of provisions
intended to accommodate increased construction and
operation of power plants. The bill also provides a
10-year waiver of "standby charges" for specified
distributed generation (DG) installations.
Assembly Amendments make numerous changes without altering
the intent of the bill. They (a) reduce the allocation
from the General Fund from $53,250,000 to $3,250,000; (b)
add provisions relating to unemployment; and (c) make
numerous clarifying and technical adjustments.
Senate Floor Amendments of 3/19/01 add to the bill the
contents of SB 9X (Morrow) which provides for a 10-year
waiver of "standby charges" for specified DG installations.
ANALYSIS : Existing law:
1.Grants CEC exclusive authority to certify power plants.
2.Authorizes CEC to establish a process for the expedited
review of applications to construct and operate power
plants and thermal power plants and related facilities.
This bill contains a number of provisions intended to
accommodate increased construction and operation of power
plants, and provides a 10-year waiver of standby charges
for specified distributed generation facilities.
Specifically, this bill:
1.Limits to 45 days and 100 days, until January 1, 2004, a
local jurisdiction's time for initial review and final
review, respectively, of an application submitted to the
SB 28X
Page
3
California Energy Commission (CEC) for a power plant
project.
2.Requires CEC, as part of its written decision of a power
plant application, to discuss the project's public
benefits, and, as part of its final report, to address
whether property tax revenue generated from the project
is sufficient to support related local infrastructure and
services.
3.Specifies that CEC siting decisions are subject only to
California Supreme Court review and not to the appellate
court review process to which California Public Utilities
Commission (CPUC) decisions are subject.
4.Requires CEC to issue its final decision for certifying
"repowering" projects within 180 days instead of the 12
months allowed for power plant modifications.
5.Extends, from August 1, 2001 to December 31, 2002, the
date by which temporary "peaker" power plants must be in
service so as to qualify for the four-month siting
process.
6.Requires, until January 1, 2004, the California Air
Resources Board (ARB) and local air districts to take
various actions, including the following:
A. Requires ARB to implement a program for "expedited
retrofit" of power plant pollution controls for all
generating facilities;
B. Requires ARB to implement an expedited statewide
program for "identification and banking" of emission
reduction credits for power plants and natural gas
transmission facilities;
C. Requires each air district to adopt an expedited
program for permitting of standby or distributed
generation facilities and natural gas transmission
facilities;
D. Authorizes payment to air districts of mitigation
fees for a new power plant in lieu of obtaining actual
SB 28X
Page
4
emissions offsets, when the owner or operator of the
plant has shown that offsets are not available.
Mitigation fees are to be used first to secure
emission reductions from comparable stationary
sources; and,
1.Waives conditionally, for a period of 10 years, standby
charges imposed by electrical corporations on customers
who have installed non-gas-fired distributed generation
equipment five megawatts or smaller that commence
operation by September 1, 2002. Provides that the waiver
for gas-fired units shall only apply until June 1, 2006.
2.Appropriates $3,250,000 from the General Fund to CEC for
expenditure, until January 1, 2005, as follows:
A. $3 million to provide assistance to cities and
counties to expedite the review and analysis of
applications for facilities, and
B. Up to $250,000 to study, in consultation with the
Orange County Sanitation District, remedies to
mitigate the effect of shoreline water consumption in
Huntington Beach.
1.Requires workers, unemployed in any week as a result of
unscheduled power outages resulting from lack of supply,
to be paid an unemployment compensation benefit. In
addition, unemployment insurance benefits paid to a
claimant who was unemployed as a result of such outages
are prohibited from being charged to the account of the
employer.
2.Permits a gas corporation, until June 1, 2002, to
exercise the power of eminent domain to condemn any
property for the purpose of competing with another entity
in the offering of natural gas and services related to
natural gas. Additionally, until June 1, 2002, prohibits
CPUC from making a finding on a petition or complaint
filed pursuant to Section 625 of the Public Utilities
Code, and requires CPUC to dismiss the petition or
complaint.
Background/Comments :
SB 28X
Page
5
Purpose of bill : This bill proposes a series of changes to
air quality and CEC siting designed to create a framework
that accelerates the development of electrical generation
in California while maintaining environmental protections
against degradation of air quality. The author notes that
the package of proposals contained in this measure are
similar to many such proposals put forward by generators,
the Governor's office, and other parties to address the
need for clean new generation in the state.
Power Plant Siting Process : In 1974, in response to a
previous energy crisis, the Warren-Alquist Act established
an exclusive process for siting of thermal power plants 50
megawatts and larger. The siting process was intended to
provide comprehensive environmental review and predictable,
one-stop permitting of applications. It was also
integrated with a planning process that was intended to
guard against under or overbuilding of power plants.
The Act required the CEC to develop long-term forecasts of
state energy needs, which served as the basis for planning
and certification of individual power plants. Since the
advent of electrical restructuring, the planning and siting
functions have been de-coupled, but the Act still grants
the CEC exclusive authority to certify power plants and
authorizes the CEC to override other state, local or
regional decisions and certify a power plant it determines
is required for "public convenience and necessity."
The construction of the CEC's siting review function in the
Warren-Alquist Act strikes a balance between project
applicants' interest in certainty and the public's interest
in environmental protection and prudent planning of
generation resources. The CEC's siting process is a
CEQA-equivalent project evaluation process and was intended
to be rigorous and comprehensive. In approving a proposed
power plant, the CEC must find that the facility's
construction and operation is consistent with a variety of
environmental standards.
This bill contains a number of provisions intended to
accommodate increased construction and operation of power
plants, including an expedited process for certifying
SB 28X
Page
6
"repowering projects" and temporary "peaker" power plants,
and a reduced time frame for local jurisdiction's review of
power plant applications.
This bill additionally requires ARB and local air districts
to take various actions regarding expedited retrofit of
power plant pollution controls, emission reduction credits,
and the payment of emission offset fees and the posting of
bonds in lieu of obtaining actual offsets.
DG installations : DG is typically considered to be a
site-specific generation resource which is owned by the
customer and used to meet some or all of that customer's
energy needs, including electricity and, in many
applications, heating.
Examples of DG units range from a residential rooftop solar
array to a collection of large combustion turbines at a
commercial office building or industrial facility. DG can
be used for reliability back-up (standby or emergency
generation), to meet base load requirements, to meet
peaking requirements, or to meet all on-site requirements,
and sell power to adjacent sites ("over the fence"
transactions).
For a customer that owns a DG unit that is connected to the
utility distribution system, on-site generation is
complemented by power purchased through, and delivered by,
the utility. Depending on the reliability, capacity and
purpose of the DG unit, the customer may, at various times,
buy some or all of its power from the utility, or "sell"
power back to the utility through a net-metering
arrangement.
Under existing law, grid-connected DG customers pay a
standby charge to the utility to reserve the capacity need
to serve that customer. The standby charges are based on
the installed capacity of the DG unit.
This bill waives conditionally, for a period of 10 years,
standby charges imposed by electrical corporations on
customers who have installed non-gas-fired distributed
generation equipment five megawatts or smaller that
commence operation by September 1, 2002. This bill provides
SB 28X
Page
7
a five-year for gas-fired generation units.
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: Yes
Appropriates $3.25 million from the General Fund to CEC.
ASSEMBLY FLOOR :
AYES: Alquist, Aroner, Ashburn, Bates, Bogh, Briggs,
Calderon, Bill Campbell, John Campbell, Canciamilla,
Cardoza, Chan, Chavez, Cogdill, Cohn, Corbett, Correa,
Cox, Daucher, Diaz, Dickerson, Dutra, Firebaugh, Frommer,
Harman, Havice, Hollingsworth, Horton, Jackson, Keeley,
Kehoe, Kelley, Koretz, La Suer, Leonard, Leslie, Liu,
Longville, Lowenthal, Maddox, Maldonado, Matthews,
Migden, Mountjoy, Nakano, Nation, Negrete McLeod, Rod
Pacheco, Papan, Pavley, Pescetti, Reyes, Richman,
Salinas, Shelley, Simitian, Steinberg, Strickland,
Strom-Martin, Thomson, Vargas, Washington, Wayne, Wesson,
Wiggins, Wright, Wyland, Zettel, Hertzberg
NOES: Aanestad, Leach, Robert Pacheco, Runner, Wyman
CP:jk 5/1/01 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
**** END ****