BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 110|
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THIRD READING
Bill No: SB 110
Author: Peace (D)
Amended: 4/5/99
Vote: 21
SENATE ENERGY, U.&C. COMMITTEE : 8-0, 4/13/99
AYES: Bowen, Baca, Brulte, Kelley, Mountjoy, Peace, Solis,
Speier
NOT VOTING: Alarcon, Hughes, Vasconcellos
SENATE APPROPRIATIONS COMMITTEE : 13-0, 5/10/99
AYES: Johnston, Alpert, Bowen, Burton, Escutia, Johnson,
Karnette, Kelley, Leslie, McPherson, Mountjoy, Perata,
Vasconcellos
SUBJECT : Energy conservation: power facility and site
certification
SOURCE : Author
DIGEST : This bill amends the California Energy
Commission's powerplant siting process to eliminate the
"integrated assessment of need" requirement and expand the
exemption of natural gas powerplants from the site
evaluation process.
ANALYSIS : The Warren-Alquist Act established an
exclusive process for siting of thermal powerplants 50
megawatts and larger that was intended to guard against
overbuilding of powerplants and provide comprehensive
environmental review and predictable, one-stop permitting
CONTINUED
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of applications.
The Act requires the California Energy Commission (CEC) to
develop long-term forecasts of state energy needs, which
serve as a basis for planning and certification of
individual powerplant facilities. The Act grants the CEC
exclusive authority to certify powerplants and authorizes
the CEC to override other state, local or regional
decisions and certify a powerplant it determines is
required for "public convenience and necessity."
The first step in the siting process is the requirement
that an applicant file a notice of intention (NOI), which
is intended to provide alternative sites for the CEC to
evaluate. An NOI describes the location, design and
operation of the preferred site and alternative sites. The
CEC evaluates the sites based on environmental impact,
connection to grid, need and compatibility with the
existing system.
The NOI process also includes specific requirements for CEC
consultation with other federal, state, regional and local
agencies, including detailed analysis and comment
requirements for the California Coastal Commission and the
San Francisco Bay Conservation and Development Commission
for sites proposed to be located within their
jurisdictions.
The law generally requires that at least two alternative
sites be identified prior to moving to the next step in the
siting process, the application for certification (AFC).
However, since the siting process was established in 1975,
a number of statutory exemptions to the NOI requirement
have been established. Current statutorily exempt projects
include modifications to existing facilities, demonstration
projects, site-specific facilities like geothermal
powerplants, and natural gas powerplants that result from
competitive solicitation or negotiation.
The CEC has interpreted the natural gas powerplant
exemption to apply to any natural gas powerplant that
intends to sell its product into the Power Exchange. As a
result, all recent applications submitted to the CEC have
been granted an exemption from the NOI process.
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This bill codifies the CEC's practice by expanding the
existing exemption to include all natural gas powerplants,
regardless of their competitive status. This assumes that
all future applicants would sell their products into the
competitive market and would make the CEC exemption
determination a "no-brainer," thereby easing the burden on
applicants filing for exemptions. The rationale for
allowing a blanket exemption for natural gas powerplants is
that, in a competitive market, the NOI function of
identifying an acceptable site is the obligation of the
applicant, not the CEC.
The more substantive next step in the siting process is
consideration of the AFC, which is a CEQA-equivalent
project evaluation process. In approving an AFC, the CEC
must find that the facility's construction and operation is
consistent with a variety of environmental standards and
that the facility conforms with the CEC's integrated
assessment of need (IAN).
The IAN is determined through the development of the CEC's
Electricity Report, which is a comprehensive planning and
forecasting assessment addressing the supply and demand for
electricity. According to the CEC, in response to
restructuring, the most recent IAN stated that any proposed
project is found to be needed if the total number of
megawatts does not exceed a numerical cap that the CEC
determined could be needed to satisfy statewide peak demand
and maintain system reliability (6737 MW). Because this
cap is sufficiently high that it is not likely to be
exceeded, as a practical matter, the current IAN will have
no effect on individual facility certification.
This bill eliminates the IAN and contingent siting
considerations. Again, the rationale is that, in a
competitive market, the determination of whether a facility
is needed is the obligation of the applicant, not the CEC.
Theoretically, market consequences will discourage
applicants from building facilities that aren't needed.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
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SUPPORT : (Verified 5/12/99)
California League of Food Processors
California Municipal Utilities Association
Independent Energy Producers
Sempra Energy
NC:cm 5/12/99 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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