BILL ANALYSIS                                                                                                                                                                                                    



                                                                       


           ------------------------------------------------------------ 
          |SENATE RULES COMMITTEE            |                  SB 1298|
          |Office of Senate Floor Analyses   |                         |
          |1020 N Street, Suite 524          |                         |
          |(916) 445-6614         Fax: (916) |                         |
          |327-4478                          |                         |
           ------------------------------------------------------------ 
           
                                        
                              UNFINISHED BUSINESS
                                        

          Bill No:  SB 1298
          Author:   Bowen (D) and Peace (D)
          Amended:  8/25/00
          Vote:     21

            
          SENATE VOTES NOT RELEVANT

           ASSEMBLY FLOOR  :  77-0, 8/29/00 - See last page for vote
           

           SUBJECT  :    Air emissions:  distributed generation

           SOURCE  :     Author

           
           DIGEST  :    This bill requires the State Air Resource Board  
          (ARB) to adopt emissions standards for distributed  
          generation technologies exhibiting growth potential in the  
          California energy marketplace.

           Assembly Amendments  delete the prior version.  As it left  
          the Senate, the bill was authored by the Senate Energy  
          Committee and provided $14 million from the Petroleum  
          Violation Escrow Account for energy conservation projects.

           ANALYSIS  :    Existing law:

          1. Requires the ARB to establish emissions standards for  
             stationary sources of air pollution, including  
             refineries and power plants.  

          2. Requires the ARB to establish the best available control  
             technology (BACT) as a means by which sources of air  
                                                           CONTINUED





                                                               SB 1298
                                                                Page  
          2

             pollution can comply with air emissions standards.  The  
             BACT standard is not a recommendation for a particular  
             pollution control device.  Rather, it is a recognition  
             of limits achievable by currently available and  
             economically viable pollution control devices.

          This bill requires ARB to adopt emissions standards for  
          distributed generation technologies determined to have  
          significant potential for market penetration in the state.   
          Specifically,  this bill:  

          1. Requires ARB, on or before January 1, 2003, to adopt a  
             certification program and uniform emissions standards  
             for electrical generation technologies that are exempt  
             from district permitting requirements.  

          2. Requires the emissions standards for the above-exempted  
             electrical generation technologies to reflect the best  
             performance achieved in practice by existing electrical   
             generation technologies.  

          3. Requires, commencing on January 1, 2003, all electrical  
             generation technologies to be certified by the state  
             board or permitted by an air district prior to use or  
             operation in the state.  

          4. Prohibits an air district from authorizing the siting or  
             operation of any electrical generation technology for  
             which state emission standards exist unless that  
             technology complies with the applicable standards.  

          5. Authorizes an air district to establish emissions  
             standards regarding distributed generation technology  
             more stringent than those established by ARB.  

          6. Authorizes ARB to establish a fee schedule to be  
             assessed against persons seeking certification as a  
             distributed generator.  

          7. Requires ARB, on or before January 1, 2003, to issue  
             guidance to air districts on the permitting or  
             certification of electrical generation technologies  
             under the air districts' regulatory jurisdiction.  The  
             guidance shall address best available control technology  







                                                               SB 1298
                                                                Page  
          3

             determinations for electrical generation technologies  
             and, by the earliest practicable date, make those  
             equivalent to the level determined by ARB to be the best  
             available control technology for permitted central  
             station power plants in California.  The guidance shall  
             also address permit streamlining and the potential for  
             precertification of one or more types of electrical  
             generation technologies.  

           Comments  

          "Distributed generation" is defined in this bill as  
          "electrical generation located near the place of use."   
          Examples of distributed generation include large  
          co-generation facilities, located adjacent to a hospital,  
          providing all electricity demands or those required during  
          a power failure, as well as a simple solar array atop a  
          residential home, used for various home electrical demands.  
           

          The author's office states that while distributed  
          generation technologies are likely to play an important  
          role in supplying power to the state in the future, the  
          application of existing air quality standards to them is  
          either unclear or insufficient.  This bill would charge the  
          appropriate enforcement agency with establishing these  
          standards in as proactive a manner as possible.  

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  Yes

          According to the Appropriations Committee analysis, there  
          will be moderate costs, about $300,000 primarily in fiscal  
          year (FY) 2001-2002, to ARB to adopt regulations for the  
          emission standards and the certification program.  These  
          costs would eventually be reimbursed by revenue generated  
          from fees ARB is authorized to impose on distributed  
          generators certification once the program is put in place.   
          There will also be moderate costs, about $500,000 annually  
          starting in FY 2002-2003, to ARB to administer the  
          certification program.  These costs are also potentially  
          covered by fee revenue.  (Air Pollution Control Fund.)

           ASSEMBLY FLOOR  :







                                                               SB 1298
                                                                Page  
          4

          AYES:  Aanestad, Ackerman, Alquist, Aroner, Ashburn,  
            Baldwin, Bates, Battin, Baugh, Bock, Brewer, Briggs,  
            Calderon, Campbell, Cardenas, Cardoza, Cedillo, Corbett,  
            Correa, Cox, Cunneen, Davis, Dickerson, Ducheny, Dutra,  
            Firebaugh, Florez, Gallegos, Granlund, Havice, Honda,  
            House, Jackson, Kaloogian, Keeley, Knox, Kuehl, Leach,  
            Lempert, Leonard, Longville, Lowenthal, Machado, Maddox,  
            Maldonado, Margett, Mazzoni, McClintock, Migden, Nakano,  
            Olberg, Oller, Robert Pacheco, Rod Pacheco, Papan,  
            Pescetti, Reyes, Romero, Runner, Scott, Shelley, 
               Steinberg, Strickland, Strom-Martin, Thompson,  
            Thomson, Torlakson, Villaraigosa, Vincent, Washington,  
            Wayne, Wesson, Wiggins, Wildman, Wright, Zettel,  
            Hertzberg


          NC:sl  8/30/00   Senate Floor Analyses 

                       SUPPORT/OPPOSITION:  NONE RECEIVED

                                ****  END  ****