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SB-24 Air pollution: emission reduction credits: energy producing facilities.(2001-2002)



Current Version: 06/05/01 - Amended Senate

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SB24:v98#DOCUMENT

Amended  IN  Senate  June 05, 2001

CALIFORNIA LEGISLATURE— 2001–2002 2nd Ext.

Senate Bill
No. 24

Introduced  by  Senator Knight

May 17, 2001

An act to amend Section 743 of the Public Utilities Code, relating to public utilities. Section 40709.6 of the Health and Safety Code, relating to air pollution.


LEGISLATIVE COUNSEL'S DIGEST


SB 24, as amended, Knight. Electrical corporations: interruptible service contracts Air pollution: emission reduction credits: energy producing facilities.
(1) Existing law requires each air pollution district and air quality management district to establish, by regulation, a system by which reductions in air contaminant emissions may be banked and used to offset future emissions. Existing law permits increases in emissions of air pollutants at a stationary source located in a district to be offset by emission reductions credited to a stationary source in another district. Existing law also requires any increase in emissions of air contaminants in a district that is offset by emission reductions credited to a stationary source located in another district to be approved by a resolution adopted by the governing board of the upwind district and the governing board of the downwind district, after taking into consideration the impact of the offset on air quality, public health, and the regional economy.
This bill would require the offset to be approved only by the governing board of the downwind district if the offset is utilized for the purpose of siting an energy producing facility on the grounds of a former military base in the downwind district, in a county that in 2001 has a population of between 1,689,000 and 1,700,000 residents. By requiring upwind districts to grant offsetting emission reduction credits to downwind districts upon the approval of the downwind district, this bill would create a state-mandated local program. (2) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement, including the creation of a State Mandates Claims Fund to pay the costs of mandates that do not exceed $1,000,000 statewide and other procedures for claims whose statewide costs exceed $1,000,000.
This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions.

Existing law permits the Public Utilities Commission to approve contracts, of not more than 10 years’ duration, between an electrical corporation and a heavy industrial customer in which the electrical corporation buys from the heavy industrial customer the right to interrupt the customer’s service on short notice, as determined by the commission. Existing law also allows the commission to amend that contract throughout the term of that contract.

This bill would prohibit the commission from amending any interruptible service contract, existing as of the operative date of the bill, to increase the number of hours the electrical service of the heavy industrial customer may be curtailed by the electrical corporation.

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

The people of the State of California do enact as follows:


SECTION 1.

Section 743 of the Public Utilities Code is

Section 40709.6 of the Health and Safety Code is amended to read:

40709.6.
 (a) Increases in emissions of air pollutants at a stationary source located in a district may be offset by emission reductions credited to a stationary source located in another district if both stationary sources are located in the same air basin or, if not located in the same air basin, if both of the following requirements are met:
(1) The stationary source to which the emission reductions are credited is located in an upwind district that is classified as being in a worse nonattainment status than the downwind district pursuant to Chapter 10 (commencing with Section 40910).
(2) The stationary source at which there are emission increases to be offset is located in a downwind district that is overwhelmingly impacted by emissions transported from the upwind district, as determined by the state board pursuant to Section 39610.
(b) The district, in which the stationary source to which emission reductions are credited is located, shall determine the type and quantity of the emission reductions to be credited.
(c) The district, in which the stationary source at which there are emission increases to be offset is located, shall do both of the following:
(1) Determine the impact of those emission reductions in mitigation of the emission increases in the same manner and to the same extent as the district would do so for fully credited emission reductions from sources located within its boundaries.
(2) Adopt a rule or regulation to discount the emission reductions credited to the stationary source in the other district. The discount shall not be less than the emission reduction for offsets from comparable sources located within the district boundaries.
(d)  Any (1) Except as provided in paragraph (2), any offset credited pursuant to subdivision (a) shall be approved by a resolution adopted by the governing board of the upwind district and the governing board of the downwind district, after taking into consideration the impact of the offset on air quality, public health, and the regional economy. Each district governing board may delegate to its air pollution control officer the board’s authority to approve offsets credited pursuant to subdivision (a).
(2) If the emission reduction credit offset will be utilized for the purpose of siting an energy producing facility on the grounds of a former military base in a downwind district, in a county that in 2001 has a population between 1,689,000 and 1,700,000 residents, the offset shall be approved by a resolution adopted by the governing board of that downwind district. Approval by the governing board of the upwind district is not required.

SEC. 2.

 Notwithstanding Section 17610 of the Government Code, if the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code. If the statewide cost of the claim for reimbursement does not exceed one million dollars ($1,000,000), reimbursement shall be made from the State Mandates Claims Fund.

amended to read:

743.

(a)As used in this section, “steel producer” means a producer of steel products in California which in 1981 or any subsequent year produced at least 75,000 tons of rolled or finished steel and which has a maximum demand for electricity of 4,000 kilowatts or more at one plant location. Any steel producer which transfers any substantial amount of employment from its facilities in this state to any out-of-state facility or otherwise substantially reduces employment at its facilities in this state below the June 30, 1985, level, or fails to maintain and make reasonable and prudent investments in its facilities, as determined by the commission, is ineligible for any electric rate established pursuant to this section.

(b)As used in this section, “frozen food processor” means a corporation or person engaged in the processing of food in California, which food is classified according to the Standard Industrial Classification Manual, 1972, in Industry No. 2037 and Industry No. 2038 of Group 203, of Food and Kindred Products Major Group 20, as specified in Section 2900.3 of Title 7 of the Code of Federal Regulations. “Processing of food” includes the postprocessing storage of frozen food in a warehouse, or other facility, until the frozen food leaves the control or responsibility of the frozen food processor or until the frozen food processor no longer has an obligation to store the food.

(c)As used in this section, “system average rate” means total jurisdictional revenues of the electrical corporation divided by total jurisdictional sales.

(d)Every electrical corporation furnishing electricity to a steel producer, frozen food processor, or other heavy-industry customer, as determined and specified by the electrical corporation, shall prepare and file tariffs providing rates which shall be lower than the system average rate and take into consideration all of the following:

(1)Specific service requirements of individual customers, including, but not limited to, reliability, interruptability, quantity of use, and requirements of voltage.

(2)Incentives to achieve conservation, improvements in efficiency, and time-of-day load shifting.

(3)Implementation at the option of the customer.

(4)Cost of service.

(e)The commission shall consider and approve tariffs which shall be consistent with this section and which shall be in effect on and after July 1, 1992.

(f)(1)The commission may approve contracts between an electrical corporation and its heavy industrial customers as determined by the electrical corporation, of not more than ten years’ duration, in which the electrical corporation buys from the heavy industrial customer the right to interrupt the customer’s service on short notice, as determined by the commission. The payment mechanism may include a discounted rate for service. In approving and determining the reasonableness of these contracts, the commission may consider, among other things, the price paid by the electrical corporation for the right to interrupt, the value of that right to the utility system and its ratepayers, and the benefits to the ratepayers and the people of the state of retaining heavy industrial customers. Throughout the term of any of these contracts, the commission shall have the right to amend the contract. Every contract subject to this subdivision shall include a provision indicating that the contract is subject to amendment by the commission as provided in this subdivision. This subdivision does not supersede the requirement of subdivision (d) that the commission establish a heavy industrial tariff.

(2)Notwithstanding paragraph (1), the commission shall not amend any interruptible service contract, existing as of the operative date of this paragraph, between an electrical corporation and its heavy industrial customers to increase the number of hours the electrical service of the heavy industrial customer may be curtailed by the electrical corporation.