BILL ANALYSIS
SB 1622
Page 1
Date of Hearing: June 12, 2000
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Roderick D. Wright, Chair
SB 1622 (Alarcon) - As Amended: May 23, 2000
SENATE VOTE : 23-9
SUBJECT : State Energy Resources Conservation and Development
Commission (CEC): environmental justice.
SUMMARY : Requires CEC to incorporate environmental justice
concepts into its overall mission and power plant siting
process. Specifically, this bill :
1)Requires CEC to adopt regulations that will ensure CEC is in
conformance with applicable federal guidance relating to
environmental justice when certifying sites and related
facilities, on or before January 1, 2002.
2)Requires CEC, in consultation with the Governor's Office of
Planning and Research (OPR), to develop and adopt an
environmental justice mission statement for CEC, on or before
July 1, 2001.
EXISTING LAW :
1)Requires the California Environmental Protection Agency
(Cal-EPA) to meet certain requirements relating to
environmental justice, and to develop a model environmental
justice mission statement for boards, departments, and offices
within the agency, by January 1, 2001.
2)Requires OPR to be the coordinating agency for environmental
justice programs and requires the OPR director to carry out
certain related responsibilities.
3)Under the Warren-Alquist State Energy Resources Conservation
and Development Act, establishes CEC with various energy
responsibilities, including planning and forecasting, research
and development, and power facility and site certification.
4)Grants CEC exclusive authority to certify power plants and
authorizes CEC to override other state, local, or regional
decisions and certify a power plant it determines is required
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for "public convenience and necessity."
5)Permits CEC to use a certified regulatory program in lieu of
the California Environmental Quality Act (CEQA) in its power
plant siting process.
6)Requires CEC to prepare a written decision after a public
hearing on an application for certification, which contains
specified information and findings.
7)Requires that an application for certification of a power
facility submitted to CEC contain specified information that
CEC may require by regulation.
8)Requires the Secretary of the Resources Agency on or before
January 1, 2001, to review CEC's power plant siting process to
determine if it meets specified criteria for state regulatory
programs under CEQA. If the Secretary determines the
regulatory program meets those criteria, he or she is required
to continue the certification of the program.
9)Requires CEC to prepare a report to the Governor and
Legislature by March 31, 2000 that identifies administrative
and statutory measures that would improve CEC's power plant
siting and licensing process while preserving environmental
protections. The report shall include recommendations for
administrative and statutory measures for improving the siting
and licensing process.
FISCAL EFFECT : Unknown.
COMMENTS :
1)Environmental Justice . In recent years, there has been a
growing awareness that certain environmental hazards-such as
air pollution and proximity to hazardous waste facilities-are
disproportionately located among minority and low-income
populations. In 1992, the United States EPA (US-EPA) issued a
report, "Environmental Equity: Reducing Risk for All
Communities," which found that "communities of color and
low-income populations experience higher than average
exposures to selected air pollutants, hazardous waste
facilities, and other forms of environmental pollution." In
1994, President Clinton signed Executive Order 12898,
requiring US-EPA to implement a program to "address
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environmental justice in minority populations and low-income
populations." The executive order requires each federal
agency to make environmental justice principles "part of its
mission."
2)Extending SB 115 to CEC, Plus Conformance with Federal
Guidelines . SB 115 (Solis), Chapter 690, Statues of 1999,
signed into law last year, requires all boards, departments,
and offices (associated with Cal-EPA) to incorporate
environmental justice principles into their mission
statements. SB 115 defines "environmental justice" to mean
"the fair treatment of people of all races, cultures, and
incomes with respect to the development, adoption,
implementation, and enforcement of environmental statutes,
ordinances, regulations, and public policies." Because CEC is
part of the Resources Agency instead of Cal-EPA, it is not
clear that it is covered by SB 115. This bill requires CEC to
incorporate environmental justice concepts into its overall
mission and power plant siting process. Additionally, this
bill requires CEC to adopt, on or before January 1, 2002,
regulations that will ensure CEC is in conformance with
applicable federal guidance relating to environmental justice
when siting power plants.
3)Codifying Existing Practices . The Warren-Alquist Act grants
CEC exclusive authority to certify power plants 50 megawatts
(MW) and larger. The intent of this bill, according to the
author, is to ensure that there are CEC environmental justice
parameters codified in statute, and that CEC fully comply with
federal environmental justice guidelines and Title VI of the
Federal Civil Rights Act of 1964. The Civil Rights Act
prohibits recipients of federal financial assistance from
discriminating on the basis of race, color, or national origin
in their programs or activities. Current law does not require
CEC to consider environmental justice issues during their
review process. However, because environmental justice issues
have been raised in CEC's siting cases, CEC staff voluntarily
applies federal environmental justice guidelines issued by
US-EPA (to implement the 1994 federal executive order).
Additionally, under existing practice, CEC staff applies the
federal guidelines to ensure compliance with Title VI of the
Civil Rights Act.
4)Consideration of Socioeconomic Issues . For all siting cases,
CEC follows the federal guidelines' two step screening
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process. The process assesses: 1) whether the potentially
affected community includes minority and/or low-income
populations; and 2) whether the environmental impacts are
likely to fall disproportionately on minority and/or
low-income members of the community. Depending on the outcome
of the screening process, local community groups are contacted
to provide CEC with a fuller understanding of potential
environmental justice issues. Additionally, under current
practice, local community groups are asked to help identify
potential mitigation measures.
5)Applicable Federal Guidance . Section One (1) of this bill
requires CEC to adopt regulations to ensure conformity with
the mission statement this bill requires and applicable
federal guidance relating to environmental justice. This
bill's requirements relating to applicable federal guidance
are excessively vague, in that there are many federal agencies
that have adopted federal guidance on environmental justice.
Furthermore, these policies are often contradictory and in
various stages of drafting, approval, and revision. Even if
this bill were simplified to relate to one or more specific
federal guidelines, this could result in a situation where CEC
environmental justice regulations conflict with CEC's own
environmental justice mission statement. According to the
Western States Petroleum Association, this bill's requirements
for conformance with federal guidance put CEC "?in the
position of accepting, sight unseen, federal prescriptions on
how environmental justice should be managed."
6)Heightened Litigation Risk . This bill's requirement for CEC
conformance with applicable federal guidelines may
significantly increase the litigation risk for power plant
projects involved in the siting process. By requiring the
adoption of regulations, this bill would provide a legal basis
on which to sue CEC for any alleged failure to be in
conformity with applicable federal guidance on environmental
justice. There could also be legal grounds to sue CEC over
which federal guidelines are applicable. This would likely
result in CEC's siting process becoming a test case for
environmental justice law, which could lead to substantial
litigation. Additionally, the fact that no other state or
local permitting agency is required to implement state and
federal environmental justice policies would make CEC siting
process particularly vulnerable to increased litigation.
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7)Increased Lawsuits, and Subsequent Delays, Could Affect
Reliability of Electric Grid . AB 1890 (Brulte) Chapter 854,
Statues of 1996 established a competitive electric generation
market. The reliability of the electric grid depends on an
adequate supply of generation, but demand growth is outpacing
new generation additions. California's electricity
consumption is expected to increase 1.8 percent annually
through 2007. Since the enactment of AB 1890, CEC has
approved four new "merchant" plants for a total of 3,500 MW,
compared with a statewide generation capacity of 53,000 MW.
Three of the four power plants are under construction, and
will come on line late next summer (2001). The California
Independent System Operator (Call-ISO), which manages the
state's transmission grid and ensures system reliability,
predicts that the state will come up approximately 1,000 MW
short on unusually hot, summer days when peak demand could
rise to 48,900 MW. Cal-ISO and the state's investor-owned
utilities are taking short-term steps to guard against
reliability problems during the summer of 2000 and 2001,
including offering lower rates to large users provided they
agree to accept nonfirm, or interruptible power. The
Independent Energy Producers (IEP) assert that this bill will
significantly increase the "litigation risk for these
[merchant plant] projects at a time that they are especially
important to electric service reliability.
8)The author may wish to consider amending this bill to delete
the requirements contained in Section One (1) of this bill
requiring CEC adoption of regulations in conformance with
federal guidance. Current law requires that an application
for certification of a power facility submitted to CEC contain
specified information that CEC may require by regulation.
Amending this bill to require that siting applications contain
adequate information to address environmental justice issues
in a manner consistent with CEC's environmental mission
statement would provide for a meaningful discussion of these
issues within the siting process while avoiding some of the
shortcomings of adopting regulations in conformance with
federal guidelines raised in this analysis. The author may
also wish to consider amending Section Four (4) of this bill
to require CEC to consider principles and approaches of
applicable federal guidance relating to environmental justice
when developing the mission statement. Additionally, this
bill sets a July 1, 2001 deadline for CEC to adopt an
environmental justice mission statement, and a January 1, 2002
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deadline for the adoption of regulations pursuant to this
bill. The author may wish to consider amending this bill to
provide CEC with additional time to adopt regulations pursuant
to this bill, given the need for adequate public review and
the complexity and controversial nature of the issues
involved.
9)Related legislation : SB 1408 (Alarcon), would enact the
Environmental Justice Technical Assistance Grant Demonstration
Program. This bill requires OPR to allocate grants of up to
$25,000 to community-based nonprofit organizations in
communities with low-income or minority populations to obtain
technical assistance in connection with the organization's
participation in a decision involving a certification by CEC,
a decision involving a permit by the State Department of
Transportation, or a decision involving a permit, remediation
order, or corrective action by any board, department, or
office within Cal-EPA. SB 89 (Escutia) requires the Secretary
of Cal-EPA, by January 15, 2001, to convene a working group to
take various actions relating to the development and
implementation of environmental justice strategies related to
the mission of Cal-EPA. This bill also requires the
Secretary, not later than January 1, 2006, and every three
years after, to prepare and submit to the Governor and
Legislature a report on the implementation of this bill. Both
measures are currently in the Assembly Committee on Natural
Resources.
REGISTERED SUPPORT / OPPOSITION :
Support
California League of Conservation Voters
Center on Race, Poverty & the Environment
Communities for a Better Environment
Greenlining Institute
Sierra Club California
Southeast Alliance for Environmental Justice
Planning and Conservation League
Opposition
Independent Energy Producers
Western States Petroleum Association
California Manufacturers & Technology Association
SB 1622
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Analysis Prepared by : Joseph Lyons / U. & C. / (916) 319-2083