BILL NUMBER: SBX2 86 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY SEPTEMBER 6, 2001
AMENDED IN SENATE AUGUST 28, 2001
AMENDED IN SENATE JULY 18, 2001
INTRODUCED BY Senators Peace and Burton
JUNE 12, 2001
An act to amend Section 25534 of the Public Resources Code,
relating to energy resources.
LEGISLATIVE COUNSEL'S DIGEST
SB 86, as amended, Peace. Powerplant facility and site
certification.
The existing Warren-Alquist State Energy Resources Conservation
and Development Act requires the State Energy Resources Conservation
and Development Commission to certify sufficient sites and related
facilities that are required to provide a supply of electric power
sufficient to accommodate projected demand for power statewide. The
commission administers existing law with respect to energy
conservation. Existing law authorizes the commission, after
hearings, to amend the conditions of, or revoke the certification
for, any facility for specified reasons and to administratively
impose a civil penalty for specified violations of a certification of
up to $50,000 per violation, as prescribed.
Existing law establishes in state government the California
Consumer Power and Conservation Financing Authority, with powers and
responsibilities as prescribed, including the power to issue revenue
bonds, for the purpose of augmenting electric generating facilities
and to ensure a sufficient and reliable supply of electricity,
financing incentives for investment in cost-effective
energy-efficient appliances and energy demand reduction, achieving a
specified energy capacity reserve level, providing financing for the
retrofit of inefficient electric powerplants, renewable energy and
conservation, and, where appropriate, developing strategies for the
authority to facilitate a dependable supply of natural gas at
reasonable prices to the public.
This bill would authorize the commission to administratively
impose a civil penalty for specified violations of up to $75,000, as
prescribed.
The bill would require a project owner to commence construction of
a project within 6 12 months after the
project has been certified by the commission. The bill would
require a project owner to submit preconstruction and construction
milestones within 30 days after project certification. The bill
would specify that the failure of the project owner to meet
preconstruction or construction milestones, without a finding of good
cause, is cause for possible revocation of certification or the
imposition of other penalties.
This bill would require the commission to revoke the certification
and provide immediate notice of its decision to the authority if the
project owner fails to commence construction, without good cause,
within 6 12 months after the project
has been certified. The bill would require the authority, within 90
days, to evaluate whether to pursue the revoked project independently
or in conjunction with any other public or private entity, including
the original certification holder. If the authority informs the
commission, within the 90 day 90-day
period, that it will construct the project, the bill would require
the commission to promptly issue a new certification for the project
to the authority , unless the authority's statutory
authorization to finance or approve new programs, enterprises, or
projects has expired . The bill would specify that those
provisions do not apply to specified qualifying small power
production facilities or qualifying cogeneration facilities, as
provided, or any other generation units installed, operated, and
maintained at a customer site exclusively to serve that facility's
load.
The bill would authorize the commission and authority to jointly
adopt emergency regulations for the purposes of the bill.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares all of the
following:
(a) Reliable, reasonably priced electricity service is essential
for California's economic growth and for the health and welfare of
its citizens.
(b) The federal Energy Policy Act of 1992 undermined the incentive
of California's regulated utilities to build new generation plants
and caused a decade-long lag in powerplant construction in
California. This federally-driven construction lag has contributed
to a tight supply situation where unregulated electricity marketers
and generators have exercised market power to extort high electricity
prices and undermine the economic welfare and electric system
reliability of California and other western states.
(c) The Legislature, through Assembly Bill 970 of the 1999-2000
Regular Session and Senate Bill 28 of the 2001-02 First Extraordinary
Session, and the Governor, through Executive Orders issued pursuant
to his emergency powers, have acted to expedite the construction of
in-state electric generation facilities by accelerating the State
Energy Resources Conservation and Development Commission's powerplant
certification process, signed long-term contracts for the
electricity production of planned facilities, and provided incentives
for rapid powerplant construction.
(d) However, since it is critical for the welfare of the state and
its citizens that entities that obtain certifications to construct
new powerplants and to expand or repower existing powerplants do so
with all due speed, it is the policy of the state to condition the
issuance of powerplant certifications to require prompt, continuous,
good faith efforts to construct the certified project within its
original construction schedule.
(e) It is further the policy of the state that, in the event a
certification holder fails to demonstrate prompt, continuous, good
faith efforts to construct new powerplants or to expand or repower
existing powerplants, the commission shall revoke the certification
of the original project owner and issue a new certification to the
California Consumer Power and Conservation Financing Authority to
construct the project if the authority timely informs the commission
that it will construct the project either independently or in
conjunction with any other public or private entity, including the
original certification holder.
SEC. 2. Section 25534 of the Public Resources Code is amended to
read:
25534. (a) The commission may, after one or more hearings, amend
the conditions of, or revoke the certification for, any facility for
any of the following reasons:
(1) Any material false statement set forth in the application,
presented in proceedings of the commission, or included in
supplemental documentation provided by the applicant.
(2) Any significant failure to comply with the terms or conditions
of approval of the application, as specified by the commission in
its written decision.
(3) A violation of this division or any regulation or order issued
by the commission under this division.
(b) The commission may also administratively impose a civil
penalty for a violation of paragraph (1) or (2) of subdivision (a).
Any civil penalty shall be imposed in accordance with Section 25534.1
and may not exceed seventy-five thousand dollars ($75,000) per
violation, except that the civil penalty may be increased by an
amount not to exceed one thousand five hundred dollars ($1,500) per
day for each day in which the violation occurs or persists, but the
total of the per day penalties may not exceed fifty thousand dollars
($50,000).
(c) A project owner shall commence construction of a project
within six 12 months after the project
has been certified by the commission. The project owner shall submit
preconstruction and construction milestones to the commission within
30 days after project certification. Preconstruction milestones
shall require the start of construction within the six
12 month period established by this subdivision.
If the 30-day deadline to submit preconstruction and construction
milestones to the commission is not met, the commission shall
establish milestones for the project.
(d) The failure of the project owner to meet preconstruction or
construction milestones, without a finding by the commission ,
or the executive director of the commission, of good cause,
shall be cause for revocation of certification or the imposition of
other penalties by the commission. A finding by the commission that
there is good cause for failure to meet milestones shall be made if
the commission , or the executive director of the commission,
determines that any of the following criteria are met:
(1) The change in any milestone does not change the established
milestone for the start of commercial operation.
(2) The milestone is changed due to circumstances beyond the
project owner's control.
(3) The milestone will be missed but the project owner
demonstrates a good faith effort to meet the project milestone.
(4) The milestone will be missed due to unforeseen natural
disasters or acts of God that prevent timely completion of the
project milestone.
(e) If the project owner fails to commence construction, without
good cause, within six 12 months after
the project has been certified by the commission, the commission
shall revoke the certification and provide immediate notice of its
decision to the California Consumer Power and Conservation Financing
Authority. The authority shall, within 90 days, evaluate whether to
pursue the revoked project independently or in conjunction with any
other public or private entity, including the original certification
holder. If the authority informs the commission, within the 90-day
period, that it will construct the project either independently or in
conjunction with any other public or private entity, including the
original certification holder, the commission shall promptly issue a
new certification for the project to the authority , unless the
authority's statutory authorization to finance or approve new
programs, enterprises, or projects has expired .
(f) Subdivisions (c), (d), and (e) shall not apply to a
qualifying small power production facility or a qualifying
cogeneration facility within the meaning of Sections 201 and 210 of
Title II of the federal Public Utility Regulatory Policies Act of
1978 (16 U.S.C. Secs. 796(17), 796(18), and 824a-3), and the
regulations adopted pursuant to those sections by the Federal Energy
Regulatory Commission (18 C.F.R. Part 292.101 to 292.602, inclusive),
nor shall those subdivisions apply to any other generation units
installed, operated, and maintained at a customer site exclusively to
serve that facility's load.
(g) To implement this section, the commission and the
California Consumer Power and Conservation Financing Authority may
jointly adopt emergency regulations in accordance with Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code. For purposes of that chapter, including,
without limitation, Section 11349.6 of the Government Code, the
adoption of the regulations shall be considered by the Office of
Administrative Law to be necessary for the immediate preservation of
the public peace, health and safety, or general welfare.