BILL ANALYSIS
SB 1776
Page 1
Date of Hearing: June 14, 2004
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Sarah Reyes, Chair
SB 1776 (Bowen) - As Introduced: February 20, 2004
SENATE VOTE : 37-0
SUBJECT : Electrical energy: thermal powerplants.
SUMMARY : Requires the California Energy Commission (CEC) to
establish a process for expedited review for the certification
of thermal powerplants or related facilities. Specifically,
this bill :
1)Requires CEC to establish a process for expedited review and
issuance of its final decision on applications for
certification of thermal powerplants and related facilities
within 6 months upon the filing of the application.
2)Specifies that CEC has the discretion to not issue a final
decision within 6 months if it determines that the applicant
does not comply with applicable standards, ordinances,
regulations, or statutes and will not cause significant
adverse impact on the environment or electrical system.
3)Specifies that comments filed by any local, regional, or state
agency regarding the repowering application to be filed 100
days after the filing of the application.
4)Specifies that for purposes of this bill repowering means:
a) The project complies with all applicable requirements of
federal, state and local laws;
b) The project is located on the site of, and within the
existing boundaries of, an existing thermal facility;
c) The project will not require significant additional
rights-of-way for electrical or fuel-related transmission
facilities;
d) The project will result in significant and substantial
increases in the efficiency of the production of
electricity, including, reducing the heat rate, achieving
SB 1776
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greater efficiency in the use of natural gas, achieving
greater efficiency in the use and discharge of water, and
reducing air pollutants emitted by the project.
5)Sunsets the bill on January 1, 2007.
EXISTING LAW:
1)Establishes that CEC has the exclusive power to certify all
thermal powerplant sites over 50 MW and related facilities in
the state, whether a new site and related facility or a change
or addition to an existing facility.
2)Establishes that CPUC is responsible to ensure that all
utility customers receive reliable service at just and
reasonable rates and giving CPUC the power to undertake all
necessary actions to properly regulate and supervise
California's investor-owned utilities (IOUs).
3)Requires CEC to develop an Integrated Energy Policy Report at
least every two years, to assess and forecast all aspects of
energy industry supply, production, transportation, delivery
and distribution, demand and prices.
4)Establishes a process whereby CPUC can approve long term
procurement plans filed by the IOUs. The plans are to include
price risk assessments, definition of electricity product,
duration of plan, and a competitive procurement process, an
incentive mechanism if one is proposed and upfront standards
and criteria to be known by the utility prior to execution of
any contract.
5)Specifies that the electrical corporations will create or
maintain a diversified procurement portfolio consisting of
both short term and long term electricity and electricity
related and demand reduction programs.
FISCAL EFFECT : Unknown.
COMMENTS : There currently is a need to have a comprehensive
review of thermal powerplants that need to be redeveloped (i.e.,
repowered). In July 2003 CEC issued a staff paper on Aging
Natural Gas Power Plants in California . In the paper the
concerns were raised that a significant number of older
facilities may lack the reliability to be available when needed
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as a result of age of the facility and/or the need to retrofit
the facility with selective catalytic reduction (SCR) emission
control equipment. Furthermore, about 30,000 MW of dependable
capacity is provided by in state natural gas power plants with a
capacity of 50 MW or greater. These facilities play an
important role in the operation of the electric system by
providing needed capacity to meet peak demand, and providing
swing capacity to meet annual electricity needs when imports or
hydroelectric resources are low. Over half of these facilities
were built before the 1960's and have high heat rates making
them 25-50 percent less efficient than plants coming on line.
According to the Department of Water Resources (DWR) most of the
generation constructed in the last four years has been in the
form of new generation through long term power contracts with
the state. CEC staff report notes that more than 25% of the
state natural gas fired capacity either was built or repowered
since 2000.
What this bill does is to add back into the Public Utilities
Code & Resources Code a process to allow CEC to develop an
expedited citing process for thermal power plants. The previous
statute had mixed success prior to it having sunset on January
1, 2004 to get re-powered facilities permitted by CEC in a more
timely manner due to lengthy environmental review processes and
local concerns regarding constructing a powerplant in their
communities.
REGISTERED SUPPORT / OPPOSITION :
Support
California Energy Commission (support with amendments)
Opposition
None on file
Analysis Prepared by : Daniel Kim / U. & C. / (916) 319-2083