California Senators Unveil Bills To Create Post-2020 Climate Program

Source: By Curt Barry, Inside EPA • Posted: Wednesday, February 11, 2015

SACRAMENTO, CA — Top California state senators Feb. 10 unveiled a package of bills intended to extend the state’s current climate and clean energy program beyond their current 2020 expiration, including measures that seek to set greenhouse gas (GHG) targets through 2050 and others that would codify Gov. Jerry Brown’s plans for increases in renewable energy and reductions in oil use.

But many of the legislation’s key provisions are likely to face significant debate in the coming legislative session. For example, the California Air Resources Board (CARB) has resisted calls by lawmakers to set specific mid-term GHG targets and timetables for reducing emissions and has instead favored legislation that would provide broad discretion.

Similarly, the legislation setting new renewable energy targets is expected to face significant debate over whether the targets are achievable and how to allow utilities to achieve them.

A coalition of business groups also cautioned lawmakers to proceed carefully as they craft California’s “Second Generation” climate program.

“Businesses and consumers are now paying increasingly higher bills for our current climate change policies,” Californians for Affordable and Reliable Energy (CARE) said in a statement. “While we support the current goals, we have major concerns that the next generation of legislative and regulatory mandates allow businesses and energy providers the flexibility to determine the most cost effective way to meet climate change goals,” said Rob Lapsley, Chairman of the CARE coalition and president of the California Business Roundtable.

“Overly prescriptive policies should be avoided as we do not know what technology or economic conditions will exist in 2030 or 2050.”

But key Senate staffers suggested they are planning to use the legislation as a starting point for any debate and vowed to address the industry concerns.

Kip Lipper, a top adviser to Senate President Pro Tem Kevin de Leon (D), said during a Feb. 10 conference call with reporters that he expects S. 350, the senator’s new bill setting renewable energy and oil use targets, to be used as the “beginning of the conversation and dialogue with utilities.”

“We also want to have conversations with folks who are worried about flexibility, to see if we can find additional” options to determine if the standard is achievable,” Lipper said.

While most states are still struggling to craft climate programs to comply with 2020 and 2030 deadlines in EPA’s proposed GHG rules for existing power plants, California policymakers are now preparing to develop a new second generation climate program beyond 2020 targets that were set in the 2006 global warming law, AB 32.

In addition to requiring GHG reductions of levels by 2020, the state has also created a broad GHG cap-and-trade program, which this year began regulating transportation fuels as well as power generation, a low-carbon fuel standard, clean car programs, aggressive renewable energy and energy efficiency targets and many others.

Some of the post-2020 legislation has already been introduced. Sen. Fran Pavley (D), who as an assemblywoman sponsored AB 32, late last year introduced SB 32, a bill that requires CARB to approve a GHG emissions limit for 2050 that is 80 percent below 1990 levels.

CARB is also authorized by the bill to approve interim GHG emission targets to be achieved by 2030 and 2040, despite calls from CARB to leave it up to the board to set targets and timetables for 2030 and 2040.

Golden Gate Standards’

SB 350, the centerpiece bill of the legislation introduced this week by de Leon and Sen. Mark Leno (D), implements the governor’s “Golden Gate Standards,” dubbed the “50-50-50 benchmarks.” First detailed in Brown’s inauguration speech last month, the plan seek to increase renewable energy procurement from 33 percent in 2020 to 50 percent by 2030, reduce petroleum use by 2050 and increase building efficiency by 50 percent.

The bill “makes these standards permanent, trackable and enforceable by enacting them into law and building on the accountability mechanisms already in existence to ensure they are fully implemented,” states a background paper on the legislation. “Each of these standards are added to existing clean air, clean energy, and climate related statutes that have been implemented for years.”

The bill would increase the state’s current renewable portfolio standard (RPS) from 33 percent by 2020, to 50 percent by 2030. The standard will be implemented by the California Public Utilities Commission (CPUC) for the private, investor-owned utilities and by the California Energy Commission (CEC) for municipal utilities, following current law.

“Each utility submits a procurement plan showing it will purchase clean energy to displace other non-renewable resources,” the paper states. “Each state agency then reviews the plan, ensures it complies with the law and approves the plan.”

In a separate CEC background paper, the renewables target can be reached in several ways, including: a new utility procurement requirement that focuses on optimizing clean energy technologies, efficiency and demand

management programs according to costs and system benefits; a new procurement requirement to increase renewables

beyond 33 percent, including allowing for rooftop solar and better coordination with Western states and Baja California

to maximize renewable energy production and better balance production with demand; and a clean energy standard requiring reductions in GHG emissions of electricity sold in California based upon the loading order.

Lipper, the de Leon advisor, said during the conference call that he expects extensive discussions in the coming months about how utilities would go about meeting the 50 percent renewables standard, adding that current law already provides a significant amount of flexibility.

The 50 percent reduction in petroleum use also will be implemented using existing laws and financial resources, with a plan being developed by CARB. Under current law, CARB must reduce pollution in order to achieve state and federal ambient air standards. Current law requires the board to adopt standards for vehicles and fuels to achieve clean air, the legislation background paper says. “This measure simply ensures those actions will achieve a 50 percent reduction in petroleum by 2030.”

CARB says that production, refining and use of petroleum accounts for nearly half of GHG emissions, 80 percent of smog-forming pollution, and over 95 percent of cancer-causing diesel particulate matter, the paper says. CARB also notes that oil dependence costs the state $33 billion-$55 billion annually, “and that reducing petroleum use and improving vehicle efficiency will cut costs and improve California’s economic productivity and competitiveness.”

CARB Analysis

The paper points to a CARB analysis showing one pathway toward the goal could include reducing growth in vehicle-miles traveled to 4 percent; increasing on-road fuel efficiency of cars to 35 miles per gallon (mpg) and heavy-duty trucks to 7 mpg; and at least doubling the use of alternative fuels such as biofuels, electricity, hydrogen, and renewable natural gas.

SB 350 creates the new target and authorizes CARB to write regulations to meet the target, Lipper said during the press conference call.

Lipper said that SB 350 will “clearly” trigger a “robust debate” about whether the 50 percent reduction in petroleum use can be met and how. “We think CARB has a number of tools in the toolbox” to move toward meeting the goal, he said.

For example, CARB has the ability to adopt specifications for fuel, efficiency standards for cars and, along with other agencies, the authority and funding to promote less traffic and less pollution through more compact development under the 2008 state law, SB 375, Lipper said.

SB 350’s call for a 50 percent increase in energy efficiency in buildings will be done through the use of existing energy efficiency retrofit funding and regulatory tools already available to state energy agencies under existing law, the paper says. The bill also requires state energy agencies to plan for and implement those programs in a manner that achieves the energy efficiency target.

The paper notes that California under current law has energy efficiency standards for new buildings and appliances, but that “implementation challenges include the lack of enforcement mechanisms and accountability.”

SB 350 “gives energy agencies the authority to review and revise our state’s energy efficiency programs to marshal the funds and regulatory actions necessary to reach this target.”

Another measure in the Senate leaders’ clean energy and climate change package unveiled this week includes SB 185 by de Leon, which would require the state’s two largest public employee pension funds to divest from companies involved in coal mining and combustion. Specifically, the funds over the next 18 months would have to divest from companies with 50 percent or more of their facilities involved in the mining or the burning of coal, Lipper said.

The other bill included in the package is SB 189 by Sen. Ben Hueso (D), which would create a new Senate Committee on Maximizing Jobs and Economic Growth. The panel would “advise and inform state clean energy and climate actions that ensure maximum job creation and economic benefits to all Californians,” the paper says.