BILL ANALYSIS
SB 1269
Page 1
Date of Hearing: August 14, 2002
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Darrell Steinberg, Chair
SB 1269 (Peace) - As Amended: August 8, 2002
Policy Committee: Utilities and
Commerce Vote: 10-3
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill expands the conditions under which the California
Energy Commission (CEC) may revoke its certification for a new
power plant construction project. Specifically, this bill:
1)Authorizes the CEC to revoke its certification for any power
plant project that does not start construction within 12
months after the owner has received final permits and resolved
all administrative and judicial appeals and if the California
Consumer Power and Conservation Financing Authority notifies
the CEC that it is willing to construct the project.
2)Applies the above to those projects that the CEC deems have
complete permit applications after January 1, 2003.
3)Allows the CEC to extend the 12-month limit by an additional
24 months if the owner reimburses the commission's actual cost
of licensing the project. The cost will be based on a
certified commission audit and any reimbursement will be to
the General Fund.
4)Requires project owners, after receiving project
certification, to submit construction and operation milestones
to the CEC and requires the CEC to approve the milestones.
Failure of the owner to meet the milestones without a finding
of good cause by the commission, based on specified criteria,
will be cause for revocation of the project certification or
imposition of other penalties by the commission.
5)Requires the power authority, after demonstrating that it is
able to construct a permitted power plant and receiving a
SB 1269
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permit from the CEC pursuant to (1) above, to start
construction within 24 months and to meet project milestones
established by the CEC.
6)Requires the authority, if it receives a permit per (5) above,
to offer to reimburse the original project owner for his
permitting costs and the costs of any assets, such as major
equipment, already procured for the project.
7)Increases the maximum civil penalties that the CEC may
impose-for false statements on a permit application, or
failure to comply with the conditions of permit approval-from
$50,000 to $75,000 per violation and from $1,000 to $1,500 per
day (not to exceed a total of $50,000) when a violation occurs
and persists.
FISCAL EFFECT
1)Absorbable costs to the CEC.
2)Potential additional General Fund revenues from increased
civil penalties and reimbursement by project owners for CEC's
certification costs.
3)Any additional costs to the power authority will be borne by
the ratepayer beneficiaries of any power projects constructed
by the authority pursuant the bill's provisions.
COMMENTS
Background and Purpose . The CEC licenses power plants of 50
megawatts or larger. Currently, a license issued by CEC to
construct and operate a power plant expires five years after
issuance. In February 2001, the Governor issued an executive
order directing the CEC to establish performance milestones for
starting construction within one year of certification and for
the project construction phase. Failure to meet these deadlines
without prior approval by the commission based on a showing of
good cause is to constitute forfeiture of a certification. CEC
issued guidelines to carry out the emergency executive order,
establishing pre-construction milestones to allow for the start
of construction within one year of certification. The
guidelines required that the milestones be established and
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agreed upon no later than 30 days after approval of the project.
SB 1269 is generally consistent with the executive order, which
expired December 31, 2001, and with procedures that the
commission is currently developing.
According to the author, "[t]he grant of a license to build a
power plant in California is a determination that the wider
public benefit associated with a reliable supply of electricity
for the community more than offsets the mitigated impacts of the
plant on the community. In making such determinations, the
state invests considerable public resources in investigating and
processing every application to license a power plant, without
discrimination. To the extent, however, that the licensee can
choose not to exercise the privilege to construct, the state
will have invested public resources to further only a private
speculative purpose with no corresponding public benefit."
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081