Recent Developments:
- Climate Policy Implementation
A. CPUC/CEC Filing (R.06-04-009)
The latest and final round of comments in the CPUC – CEC joint proceeding to implement AB 32 took place on June 2, and reply comments were submitted on June 16. These comments and reply comments will inform a joint CPUC – CEC decision on the entire suite of recommendations to the CARB to achieve electricity-sector GHG reductions to 1990 levels by 2020. The proposed decision will be issued in July, for final vote of the CPUC and CEC commissioners in August.
The comments are meant to build the record on a number of important design issues in recent workshops and rulings from the CPUC. These issues are:
- Method of distributing greenhouse-gas emissions allowances to load-serving entities
- The final economic model for the electricity sector, including final comments on cost assumptions (the “E3 Model”)
- Regulatory treatment of combined heat and power facilities.
- Flexible compliance options for the electricity sector
- Complementary policies for the electricity sector
CEERT participated in the following workshops in this proceeding:
- April 21-22 on allowance allocation and the E3 calculator (CPUC)
- May 2 on resource and supportive policy options for the electricity sector (CARB)
- May 6 on the final E3 calculator (CPUC)
- May 19 on policy scenarios for the AB 32 Scoping Plan (CARB)
CEERT’s advocacy in this proceeding has focused primarily on economic modeling and complementary policies. Our comments at this phase of the proceeding are summarized below.
- The three most important items that the Commissions must include in their recommendations to the CARB are:
- Levels of each preferred resource—energy efficiency, renewable energy, CHP and solar PV—that the electricity sector should be required to procure by 2020.
- Barriers that must be removed to achieve the determined level of each preferred resource.
- A plan of action, with deadlines, for removing those barriers and making any other policy changes necessary to achieve the determined levels of preferred resources.
- Any tradable units of greenhouse gas emissions, including offsets, must be verifiable, enforceable, and additional, and meet the requirements of Health and Safety Code §§38561(b) and 38570(b).
- Penalties should be levied on those entities that fail to meet their compliance obligation, in an amount greater than the market price per ton of CO2e.
- For CHP systems, any form of GHG regulation should consider the full efficiency and GHG-emissions benefits of both thermal and electrical functions of the unit, as well as criteria pollutant benefits, when comparing these systems to conventional, central-station power plants.
- Thirty-three percent renewable procurement by 2020 is an integral part of the electricity sector’s responsibility for GHG emissions reductions.
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- Specific to the E3 Calculator:
- Estimates of wind integration costs must be replaced with those of the Intermittency Analysis Project (IAP).
- Renewable technology cost assumptions used in the model should be those accepted by stakeholders involved in the Renewable Energy Transmission Initiative (RETI) process.
- The Commissions should consider the likelihood that natural gas prices may continue to increase between now and the year 2020 as they have in the past.
- In general, the price per ton CO2e should not be relied upon by policymakers and load-serving entities in resource procurement.
B. AB 32 Scoping Plan (CARB)
The CPUC – CEC proceeding schedule runs parallel to the CARB’s schedule to develop a scoping plan of the mix of mandatory programs, codes and standards, market mechanisms and other tools to reduce greenhouse gas emissions to 1990 levels by 2020. The remaining schedule is:
- Draft scoping plan released on June 26
- Workshop on GHG regulation of the electricity sector: July 1 – Sacramento
- Supplemental economic analysis released in July
- Series of workshops on the draft plan throughout the state: July 8 – Diamond Bar, July 14 – Fresno, July 17 – Sacramento
- Final draft scoping plan released on October 3
- First board vote on November 21-22
- Final board vote in December
CEERT will participate in all of these workshops, and will develop coalition and individual comments and advocacy efforts on elements of the draft scoping plan once it is released. The focus in this process is the same as in the CPUC/CEC proceeding.
C. Environmental Justice Outreach on Energy Issues
Environmental Justice, 33% RPS, and AB 32
California’s environmental justice (EJ) movement continues to play an important role in the state’s energy and climate-change debate. On the ground, opposition is solidifying to new natural gas combined-cycle/peaker power plants and ethanol bio-refinery clusters proposed in low-income communities of color. This opposition has prompted EJ advocates and community leaders to demand renewable-energy and sustainable-transportation solutions for California.
The state’s EJ organizations recently released California EJ Movement’s Declaration Against the Use of Carbon Trading Schemes to Address Climate Change. The EJ Declaration articulated the movement’s opposition to carbon trading and offset use, while advocating for policies that reduce fossil fuel consumption and obtain greenhouse gas emission (GHG) reductions through the development and deployment of renewable-energy technologies. The current political and policy discourse within the AB 32 implementation process reflects these dynamics, and RPS reform—with a strengthened target of 33%—has emerged as a priority issue for the EJ constituency.
CEERT’s Jose Carmona has been a member of the Environmental Justice Advisory Committee (EJAC) throughout the implementation of AB 32, and he continues to serve as the lead committee member on transportation energy and electricity issues. EJAC is statutorily required to advise CARB on the development and execution of the AB 32 Scoping Plan. Through Jose’s leadership, EJAC has been providing an additional advocacy venue for enhanced renewables policy, and a small delegation of EJAC members, including Jose, have already begun conversations with CARB Board Members about the importance of including a 33% RPS in the AB 32 Scoping Plan. The need for a 33% RPS has also been adopted as a staple of the EJ climate and energy legislative platform; via the Clean Power Campaign, Jose is facilitating the coordination and mobilization of the EJ community’s 2008 legislative campaign for a 33% RPS.
Air Quality, Localized Impacts, and AB 32
Many environmental and public health organizations have expressed deep concern that, to date, CARB has failed to undertake the type of analytical work required to adequately implement AB 32. Rigorous evaluation is still necessary to ensure that CARB meets its responsibilities for maximizing social, economic, environmental, and public-health benefits in the mix of policies and market-based mechanisms it chooses to include in the Scoping Plan. Numerous discussions with CARB staff have made it clear that the types of analysis required by AB 32 are not being undertaken, and indeed that the questions that should be asked in order to allow such an analysis have not even been formulated.
Throughout the AB 32 implementation process, questions have been raised to CARB staff with as yet no clear indication of how they will be answered. These questions include:
- What would the impact be to public health from the policy and regulatory choices made to address GHGs, and how would those impacts differ given differing mixes of choices?
- What would the impact be to existing criteria and toxic emissions levels, and how would those impacts differ given differing mixes of choices?
- How would various policies and regulatory paths impact the diversification of California’s energy sources, and how would those impacts differ given differing mixes of choices?
This issue is politically charged because the legislature and the advocacy community insist that the analysis be performed prior to the November adoption of the Scoping Plan. Air quality and energy diversification are core values for CEERT, and Jose Carmona is one of the lead advocates working to ensure that the environmental advocacy strategy is unified and compels CARB action.
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