BILL ANALYSIS
AB 151
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Date of Hearing: May 14, 2003
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Darrell Steinberg, Chair
AB 151 (Vargas) - As Amended: April 30, 2003
Policy Committee: UtilitiesVote:9-5
Natural Resources 7-4
Urgency: No State Mandated Local Program:
Yes Reimbursable: Yes
SUMMARY
This bill imposes a per kilowatt hour fee on electricity
imported into the state from northern Mexico in order to fund
air pollution mitigation measures. Specifically, this bill:
1)Requires the Air Resources Board (ARB) to impose of fee of
$0.001 per kilowatt hour on electricity imported into the
state from any new power plants located in Mexico, within 100
kilometers (60 miles) of the border, which first produced
electricity after January 1, 2003 and was not constructed
using best available control technology (BACT) for air
contaminants.
2)Requires the fee to be deposited into a newly created Imported
Electricity Air Pollution Mitigation Subaccount, which is
continuously appropriated for distribution by the ARB to
impacted air quality districts for pollution mitigation
measures.
3)Authorizes the ARB, after January 1, 2006, to impose a lower
fee if it determines that this would further enhance emission
reductions of air contaminants.
FISCAL EFFECT
1)Revenue and expenditures from the new fee would depend on the
amount of electricity imported into the state from plants
meeting the bill's criteria. This amount is unknown, but
could exceed $1 million annually. (If 300 megawatts (MW) were
imported an average of 18 hours per day for 250 days per year,
total annual revenue from the fee would be $1.35 million.)
AB 151
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2)The ARB estimates one-time special fund costs of about $50,000
for a rulemaking to establish the disbursal of revenues to air
the districts in the border region.
COMMENTS
Background and Purpose . The author argues that, if powerplants
in Mexico generate power for California but do not meet the
state's emission standards, then the air pollution created by
this power generation should be mitigated. According to the
author, the Mexican Government has recently approved the
construction of three powerplants near Mexicali-located about 3
miles south of the international border and about 12 miles
southwest of Calexico, California. Termoelectrica de Mexicali,
owned by Sempra Energy, is a 500-MW facility that produces
electricity for export into the United States. La Rosita, a 750
MW facility across the street, is owned and operated by
InterGen. In addition, InterGen also owns Energia de Baja
California. Half of the electricity from the La Rosita plant
will be exported into California. According to the author's
office, while Termoelectrica meets California clean air
requirements, the La Rosita plant meets Mexican, but not
Californian clean air requirements.
On January 9, 2003, United States Senators Feinstein and Boxer
introduced legislation that would prevent power plants along the
California-Mexico border from using natural gas from the United
States unless these plants agree to comply with California
emission standards. According to Senator Feinsten's office, the
legislation was placed on hold after InterGen announced plans,
on January 28th, to install pollution control technology on all
four units of its new power plant in Mexicali. However,
according to the author's office, this equipment will not
represent BACT, and furthermore, will not be fully operational
until 30 months after the plant's scheduled completion of June
2003.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081