BILL ANALYSIS
Appropriations Committee Fiscal Summary
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| |86(Peace) |
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|Hearing Date: 8/20/01 |Amended: 7/18/01 |
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|Consultant: Lisa Matocq |Policy Vote: E, U & C |
| |8-3 |
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BILL SUMMARY: SB 86xx makes changes to statutes relating
to power plant construction and certification by the
California Energy Commission (CEC), as specified.
Fiscal Impact (in thousands)
Major Provisions 2001-02 2002-03
2003-04 Fund
CEC Probably minor costs
General
Power Authority Potential cost pressures - see
comments Special*
below
*California Consumer Power and Conservation Financing Authority Fund
STAFF COMMENTS: Under current law, the CEC is authorized
to issue siting certifications to thermal power plants 50
mega watts or larger, and to revoke a certification under
certain circumstances.
SB 6x (Burton, Ch. 10, St. of 2001) authorized the creation
of the California Consumer Power and Conservation Financing
Authority (Power Authority) to ensure an adequate and
reliable electricity supply. The Power Authority is
authorized to, among other things, establish, acquire,
finance, operate, and construct power plants. The Power
Authority is in the process of being established. This
bill, among other things:
requires a power plant project owner to commence
construction within six months of CEC certification,
requires the CEC to revoke a certification if
construction does not commence within six months, unless
the owner can demonstrate good cause,
requires the CEC to impose penalties if certain other
conditions are not met,
requires the CEC to transfer the certification to the
Power Authority if the Power Authority chooses to pursue
the project.
The Governor's Executive Order D-25-01 directs the CEC to
require commencement of construction within one year of
certification, and to establish construction timelines to
be met. In addition, it provides that failure to meet such
deadlines without demonstrating good cause will result in
certification forfeiture.
To the extent that the Power Authority elects to pursue a
project that it wouldn't have otherwise, there are
potentially significant construction cost pressures. The
cost of constructing a 500-megawatt power plant is about
$250 million. Presumably, such costs would ultimately be
recovered through rates or sale of the plant. STAFF
RECOMMENDS that the bill be amended to change the term
"license" to "certification" throughout out bill.