BILL ANALYSIS
SB 426
Page 1
SENATE THIRD READING
SB 426 (Simitian)
As Amended August 31, 2005
Majority vote
SENATE VOTE :24-14
UTILITIES AND COMMERCE 6-5 NATURAL
RESOURCES 7-2
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|Ayes:|Levine, Pavley, De La |Ayes:|Hancock, Ruskin, Laird, |
| |Torre, | |Nava, Saldana, Wolk, |
| |Jerome Horton, Montanez, | |Lieber |
| |Jones | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Bogh, Baca, Blakeslee, |Nays:|La Malfa, Harman |
| |Keene, Wyland | | |
| | | | |
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APPROPRIATIONS 12-4
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|Ayes:|Chu, Bass, Berg, | | |
| |Karnette, Klehs, Leno, | | |
| |Nation, Oropeza, Laird, | | |
| |Saldana, Yee, Mullin | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Sharon Runner, Emmerson, | | |
| |Nakanishi, Walters | | |
| | | | |
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SUMMARY : Requires the California Energy Commission (CEC) to
evaluate and rank every proposed liquefied natural gas (LNG)
terminal and directs the Governor to disapprove an application
for a license to construct and operate an LNG terminal if the
project does not meet identified criteria. Specifically, this
bill :
1)Requires CEC to evaluate and rank each proposed LNG terminal
and provide the results to the Governor and the Legislature by
April 1, 2006.
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2)Requires the Governor to disapprove an application for a
license to construct and operate a LNG terminal unless the
facility is evaluated and ranked by CEC, and is one of the two
highest ranked sites.
3)Provides that CEC may only require applicants to provide
documents prepared to comply with federal licensing
requirements, and precludes CEC from requesting confidential
financial or market information from any applicant for the
purpose of the evaluation and ranking.
4)Requires the State Lands Commission or legislatively
designated grantee to consider an application for an LNG
facility proposed on state tide and submerged lands, in
accordance with the evaluation and ranking.
EXISTING LAW :
1)The federal Deepwater Port Act of 1974 precludes the U.S.
Secretary of Transportation from issuing a license for the
construction and operation of an off-shore natural gas
structure in federal waters without the approval of the
Governor of each adjacent coastal state, and can condition the
license on making the project consistent with state
environmental, land-use, water, and coastal management
programs.
2)The Energy Policy Act of 2005 provides the Federal Energy
Regulatory Commission (FERC) exclusive authority to approve or
deny an application for the siting, construction, or operation
of an LNG facility located on-shore or in state waters.
FISCAL EFFECT : According to the Assembly Appropriations
Committee analysis, for the initial assessment and ranking in
2006, CEC would need $250,000 for 3.0 personnel years (PYs) and
up to $1 million for consulting contracts. For evaluation of
subsequent LNG proposals, CEC would likely need $85,000 for 1.0
PY and about $100,000 for consulting contracts.
COMMENTS : The purpose of this bill is to ensure that state laws
and regulations that address safety and environmental impacts of
LNG facilities are not preempted by less-protective federal laws
and regulations. Current law permits the Governor to approve or
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disapprove an off-shore LNG facility using discretion. This
bill would limit the Governor's decision-making authority and
require him to disapprove a project unless it is evaluated by
CEC for, among other things, its effectiveness of meeting energy
needs and its mitigation of environmentally damaging effects.
There are currently three active proposals to build LNG
terminals; two off-shore and one on-shore. Each is in various
stages of development. Proponents of this bill would like to
provide more state input into the LNG siting and certification
process to ensure the three facilities are evaluated using
specific criteria identified in this bill. Opponents assert
that new supplies of LNG would decrease costs of energy, by
increasing the supply of natural gas because natural gas fuels
most California power plants.
Analysis Prepared by : Gina Mandy / U. & C. / 319-2083
FN: 0012789