BILL ANALYSIS
AB 151
Page 1
ASSEMBLY THIRD READING
AB 151 (Vargas)
As Amended April 30, 2003
Majority vote
UTILITIES AND COMMERCE 9-5 NATURAL RESOURCES 7-4
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|Ayes:|Reyes, Calderon Diaz, |Ayes:|Jackson, Hancock, Koretz, |
| |Longville, Levine, | |Laird, Lieber, Lowenthal, |
| |Maddox, Nunez, | |Montanez |
| |Ridley-Thomas, Wolk | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Richman, Campbell, |Nays:|La Malfa, Harman, Haynes, |
| |Canciamilla, | |Keene |
| |La Malfa, La Suer | | |
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APPROPRIATIONS 17-7
(vote not available)
SUMMARY : Requires any person that imports electricity into the
state from northern Mexico to pay a $0.001 per kilowatt-hour air
contaminant emission mitigation fee for the electricity.
Specifically, this bill :
1)Requires the Air Resources Board (ARB) to impose of fee not
exceeding $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)Authorizes ARB, after January 1, 2006, to impose a lower fee
if it determines that this would further enhance emission
reductions of air contaminants.
3)Provides for distribution of the mitigation fees to the local
air district that ARB determines is directly impacted by
emissions of the offending electrical generating facilities.
EXISTING FEDERAL LAW :
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1)The Federal Clean Air Act [42 U.S.C. 4701 et seq.]:
a) Requires new and modified stationary sources to undergo
new source review as part of the permitting process, which
includes the application of BACT and pollution offsets;
and,
b) Defines "BACT" as the most up-to-date methods, systems,
techniques, and production processes available to achieve
the greatest feasible emission reductions for given
regulated air pollutants and processes.
EXISTING LAW requires, under the California Clean Air Act and
related enactments:
1)States to implement all feasible measures to achieve and
maintain federal ambient air standards under their state
implementation plans.
2)Air districts to consider cost-effectiveness, technological
feasibility and other factors prior to adopting control
measures affecting stationary sources of air pollution, and
requires districts to consider, and make available to the
public, their findings related to cost effectiveness of a
control measure.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, a onetime $50,000 special fund cost for the ARB rule
making and will result in an annual revue from the mitigation
fees that could exceed $1 million.
COMMENTS : Mexican authorities have approved construction of
three electric power generation projects near Mexicali, located
about three miles south of the international border and about 12
miles southwest of Calexico, California. Termoelectrica de
Mexicali, owned by Sempra Energy, is a 500-megawatt (MW)
facility. InterGen owns and operates the La Rosita 750 MW plant
and an expansion to an existing InterGen plant in the Complex
that is 329 MW. The Sempra project produces electricity for
export into the United States (U.S.). Half of the electricity
produced by InterGen is generated for use within Mexico and the
remaining half will be produced for export into the U.S.
The author and the sponsor state that internee's La Rosita Power
Complex will emit 1900 tons of nitrous oxide annually, but that
AB 151
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the Sempra plant in Mexicali will produce only 190 tons
annually. The County of Imperial is classified as a moderate
non-attainment area for ozone (for which nitrous oxides are a
precursor). They further state that, if not mitigated, the
emissions from the power plants would have a significant adverse
impact on the air quality in their air basin.
InterGen entered into a bid process with the Mexican government
and was awarded a bid to produce electricity for Mexico for
fixed price guaranteed for 25 years. The plant producing this
power meets Mexican, but not California clean air requirements.
InterGen states that its bid to supply power to Mexico was based
on the requirement that bidders must comply with Mexican air
regulations, and now that the contract has been awarded, no
changes are allowed to the contract except as specifically
provided in the contract. Thus, it would be difficult to shut
down its operation to install BACT, and cost prohibitive given
the circumstances under which the contract was bid.
InterGen further contends that its Mexicali plant is one of the
cleanest in Mexico and is cleaner than more than 50% of the
plants currently operating in the U.S. and California.
Analysis Prepared by : Edward Randolph / U. & C. / (916)
319-2083
FN: 0001427