BILL ANALYSIS 1
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SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
MARTHA M. ESCUTIA, CHAIRWOMAN
SB 628 - Dutton Hearing Date:
April 19, 2005 S
As Amended: March 29, 2005 FISCAL B
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DESCRIPTION
Current law makes the California Energy Commission (CEC)
exclusively responsible for reviewing and approving the siting
of thermal powerplants larger than 50 MW (megawatts). CEC
review is limited to an environmental review; it does not review
whether the project is necessary.
Current law requires the CEC to provide a reasonable opportunity
for the public to comment on applications to site powerplants.
This bill requires the CEC to allow parties to present testimony
about alleged misuse of its administrative procedures to exert
economic pressure on a party to enter into a labor agreement.
This bill requires the CEC to take certain steps to maintain its
neutrality in labor disputes, which may include excluding
parties from participating in the siting process, restricting
the rights of parties in that process, and reducing the weight
of the participation of a party in that process.
BACKGROUND
Powerplants projects are very large, costing hundreds of
millions of dollars. Whether or not construction is by a union
company is one of the more contentious issues, though not an
issue for the CEC.
A couple of municipal utilities have recently applied to the CEC
for authority to build powerplants. The CEC's responsibility is
to ensure that the California Environmental Quality Act (CEQA)
is administered properly. Interested parties participated, or
intervened, in the cases. One of those parties is California
Unions for Reliable Energy (CURE). CURE's intervention raised a
number of environmental concerns. Elected officials in
Roseville and Riverside, home to the municipal utilities,
expressed concern that CURE's participation was intended to
influence whether the utilities would agree to use union labor.
They believed that agreeing to use union labor in the
construction and operation of the powerplant, accomplished by
signing a Project Labor Agreement (PLA), would make CURE's
environmental opposition go away.
Roseville's staff assessment was that where powerplant projects
"do not sign PLA's, CURE's involvement has been heavy and
adverse to the interests of the project sponsor."<1> By not
signing a PLA, the cost of Roseville's project would increase by
at least $3 million and up to $15 million with potential delays
of 18 months due to the cost of additional environmental
consultants and legal expenses, both at the CEC and potentially
in court. Conversely, signing a PLA would result in anywhere
from zero up to $6 million in additional costs with no delays,
according to the Roseville staff assessment. Roseville chose to
sign a PLA.
COMMENTS
1. Existing Rules Give CEC Discretion . Supporters argue
that CURE uses the CEC process to leverage powerplant
developers to sign PLAs by threatening a protracted CEC
review under the guise of environmental concerns.
The responsibility of the CEC is to ensure that powerplant
projects are sited consistent with California's
environmental laws. As with any participant in a CEC case,
the weight of CURE's impact will be based on the merit of
their argument. If CURE alleges errors in the project
environmental review it is up to the CEC to determine
whether those allegations are sufficiently substantiated.
If not, the CEC can dismiss CURE's complaints. To the
extent that any party, including CURE, raises legitimate
environmental issues they should be congratulated. And to
the extent that any intervenor raises bogus environmental
issues their credibility, and hence effectiveness, at the
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<1> Roseville City Council Communication, Labor Agreements for
the Roseville Energy Park , July 12, 2004, Agenda Item 39.
CEC will surely be diminished.
Under their rules the CEC can punish a party who raises
frivolous issues by denying that party's ability to
participate in the case, restricting that party's ability
to obtain information from the powerplant developer, or
simply not entertaining that party's concerns.
2. CEC Investigation . In August 2004, the bill sponsors
requested that the CEC investigate whether CURE had abused
the CEC's permitting process. In an October 26, 2004
letter the CEC's Executive Director responded on behalf of
the CEC Commissioners. CURE actively intervened in 11 of
the 35 powerplant applications approved by the CEC since
1996. That letter indicated that it was difficult to draw
definitive conclusions regarding the impact of any one
intervenor, but that the CEC's average time for reviewing
projects where CURE actively intervened was less than the
average time for reviewing projects where CURE did not
intervene. The CEC then looked at subgroups of projects.
For the 18 projects filed under the normal 12 month review
schedule CURE actively participated in seven. Those seven
projects on average took 67 more days for approval compared
to the other 11.
In summary the CEC noted that the data indicate that under
some circumstances CURE's active participation could
correlate with increased review time, but that concerns
raised by any party can add more time for review.
3. Prior legislation . Last year, AB 2497 (Cox) proposed
requiring the CEC to track how labor disputes effected
powerplant construction. That bill was defeated in the
Assembly Natural Resources Committee.
POSITIONS
Sponsor:
Associated Builders and Contractors of California
Support:
Greater Riverside Chambers of Commerce
Oppose:
California League of Conservation Voters
California Unions for Reliable Energy
Planning and Conservation League
State Building and Construction Trades Council
Randy Chinn
SB 628 Analysis
Hearing Date: April 19, 2005