Last Friday, September 11, 2015 was the final day for California legislators to pass bills out of the Legislature and on to Governor Jerry Brown for consideration. This year’s crop of bills included something for both sides of the aisle on energy and climate change issues: from the proposed repeal of AB 32, the California law mandating greenhouse gas (GHG) emission reductions, to bills to set a higher GHG reduction target for 2050 and cut petroleum use in half, and from a proposed leap in the state renewable portfolio standard (RPS) to 50% and incentives for geothermal, biomethane, and alternative fuels, to the repeal of solar water heating loan incentives. Some big ticket items passed, most failed to pass out of the Legislature before the deadline and can be considered in 2016 during for the second half of the two-year California legislative session. Time for the post-mortem.
Renewable Energy Bills
AB 645, SB 350, and SB 539 all proposed an increase in California’s RPS. Ultimately, the most high profile of these bills – SB 350 – was amended and passed at the eleventh hour. SB 350 was unveiled by the California Climate Leadership in February to great fanfare, with a triple play of raising the RPS from 33% by 2020 to 50% by 2030, increasing energy efficiency, and reducing petroleum use in vehicles. In the end, the petroleum component didn’t survive, but the 50% RPS and doubling of energy efficiency were passed intact.
SB 539 was passed in the last week of the session, but it morphed early on from an RPS bill to a geothermal energy bill, to its end point as a prohibition on naming government property after Confederate officials. Can you say gut-and-amend? A companion bill to AB 645, AB 197, would have addressed that elephant in the room, grid reliability with a 50% RPS. Luckily, that topic has been on the regulators’ radar for some time and is the subject of California Public Utilities Commission (CPUC) and California Independent System Operator (Cal-ISO) proceedings. Also, note the less talked about SB 350 provisions on Cal-ISO becoming a regional organization.
Several other bills on renewable and alternative energy were introduced, with a few successful this year. Passed by the deadline and on the Governor’s desk are SB 793 and AB 692. AB 692 requires the state government to procure at least 3% of its bulk transportation fuel from “very low carbon” transportation fuel sources in 2017, and increasing each year by 1% until 2024. SB 793 is an expansion of the Green Tariff Shared Renewables program to allow participating customers to subscribe for up to a 20-year term, rather than a one-year term currently available.
Hold-overs for 2016:
- Developing alternative refueling infrastructure for electric, hydrogen and natural gas vehicles (AB 1074).
- A renewable gas standard of 1% in 2017, increasing over time to 10% in 2030 (SB 687).
- Utility standby charges for retail customers installing clean distributed generation (AB 674).
- A biomethane project grant program (AB 577).
- Mandate for the CPUC to determine what role large-scale energy storage can play in diversifying energy resource portfolios (AB 33).
Climate Change Bills
Even more numerous than the renewable energy bills were those related to climate change and GHG emissions. Quite a few bills were introduced to amend the California Global Warming Solutions Act of 2006 (known by its bill number, AB 32), requiring GHG emissions reductions in California to 1990 levels by 2020. There were also numerous proposals to alter the allocation of the Greenhouse Gas Reduction Fund (GGRF), from cap and trade allowance auction revenues. Most bills related to GHGs didn’t meet the September 11, 2015 deadline for passage, but are eligible to be taken up in 2016. Here’s the breakdown.
Successful bills were far and few between, considering the glut of proposed legislation. Those that passed this year include SB 9, SB 185, and AB 1496. SB 9 amends the GGRF Transit and Intercity Rail Capital Program (receiving 10% of GGRF moneys) to provide for funding of “transformative capital improvements” to rail, bus, and ferry transit systems, shifting slightly from the current focus on operational investments to rail systems. California’s two largest government pension funds, CalPERS and CalSTRS, would liquidate its investments in thermal coal companies by mid-2017 under SB 185, with exceptions for companies transitioning to clean energy and where divestment would be inconsistent with fiduciary responsibilities. AB 1496 requires the measurement and analysis of methane emissions from methane hot spots in the state.
None of the bills that would have amended or affected AB 32 were passed by the September 11 deadline. Their authors may or may not get back in the ring for these proposals in 2016, but almost all of these bills are eligible for consideration in the new year.
Proposals that would strengthen and broaden AB 32 and GHG emission reductions:
- AB 21 was originally drafted to require the California Air Resources Board (CARB) to recommend a 2030 GHG reduction target, but was amended to only relate to CARB’s consultation with other agencies on the AB 32 scoping plan.
- AB 1324 would clarify that cap and trade extends beyond 2020.
- AB 1332 would create cap and trade offsets for renewable energy projects that ramp up and down during periods of peak energy demand.
- SB 32 would raise the GHG reduction target to 40% below 1990 levels by 2030. SB 32 originally also called for an 80% reduction below 1990 levels by 2050. The bill had a high-profile set-back the last week of the session.
- SB 180 would replace the current GHG emission performance standard for baseload electrical generation with separate standards for nonpeaking and peaking generation, to be determined by the CPUC.
Proposals that would scale back AB 32:
- AB 777 would flat-out repeal AB 32.
- AB 239 would remove from CARB’s authority the power to adopt further regulations under AB 32.
- AB 23 and SB 5 would create a cap and trade exemption, applying cap and trade obligations only on those GHG emitters subject to the regulation in 2013 and exempting those who might become subject between 2013 and 2020 because of increases in emissions. SB 1 would enact the same exemption, through 2025. These bills failed to pass out of their houses of origin by the June 2015 deadline, and cannot be considered in 2016.
In addition, all of the remaining proposals for the GGRF are now two-year bills:
- AB 156: Technical assistance for disadvantaged communities to access GGRF programs.
- AB 450: Funds for the PACE Reserve. PACE is a program allowing property owners to finance renewable energy installations through property tax assessments.
- AB 590: Proposed expenditures to maintain current biomass and geothermal generation and repower idle facilities.
- AB 678: A program to increase energy efficiency upgrades and investment at California ports.
- AB 1030: Priority for projects that will help place disadvantaged workers in career-track jobs.
- AB 1336: An increase in the share of GGRF funds to projects providing benefits to disadvantaged communities, from a minimum of 25% to 40%.
- SB 207: Requiring online reports on spending from the GGRF.
- SB 367: $25 million to agricultural management that reduces GHG emissions and increases carbon storage. Also establishes grants for land management practices under the Sustainable Agricultural Lands Conservation Program.
- SB 398: Creates the Green Assistance Program, to provide assistance to small businesses, small nonprofits, and disadvantaged communities in applying for GGRF moneys.
- SB 400: Requiring 25% of High-Speed Rail Authority GGRF money to go to projects to reduce or offset GHG emissions associated with construction of high speed rail.
- SB 471: Investment in GHG emission reductions associated with water treatment. This would also establish a grant and loan program for water projects resulting in reductions in water-related GHG emissions.
- SB 706: Funds to encourage in-state production of low carbon intensity fuels.
And if you were wondering whether we needed a law for everything? Well, apparently we do. In the name of energy efficiency, AB 1488, if signed by the Governor, will require landlords to permit clotheslines on rental properties.
Anyone taking bets on what will make it off the Governor’s desk before the October 11 deadline for signature?