BOARD MEETING DATE: March 6, 2009
AGENDA NO. 24
REPORT:
Legislative Committee
SYNOPSIS:
The Legislative Committee held its regular meeting on Friday, February 13, 2009. The next Legislative Committee meeting is scheduled for Friday, March 13, 2009 at 8:00 a.m. in Conference Room CC8. The Committee deliberated agenda items for Board consideration, including:
Amended Principle Recommended Position Proposed Amendments to the 2008 Board Adopted Principles regarding Alternative Power Generation Approve Proposed Guiding Principles regarding “Smart Grids” Approve
RECOMMENDED ACTIONS:
Receive, file report, and adopt committee recommendations specified in this letter.
Jane W. Carney, Chair
Legislative Committee
Attendance [Attachment 1] The Legislative Committee met on February 13, 2009. Committee Members Jane Carney (Chair) and Dr. Joseph Lyou were present. Committee Members Michael Antonovich, Jan Perry, Tonia Reyes Uranga, and Dr. S. Roy Wilson were present via videoconference.
Update on Federal Legislative Issues
Mr. Chris Kierig, AQMD federal legislative consultant, provided a brief update on the Economic Stimulus Package. Mr. Kierig discussed several programs under the U.S. Department of Energy that would be suitable for AQMD projects, and referred to $300 million available under U.S. EPA’s Diesel Emissions Reduction Act (DERA) program. Mr. Kierig reported that the bill is approximately 1,000 pages long and more details will be distributed to staff after further assessment of the bill. Mr. Kierig also reported that spending plans are going to be required from each federal agency based on different timelines which range from 15 to 90 days.
Dr. Joseph Lyou inquired if there is an opportunity to place priority on certain geographic areas, for implementation. Mr. Kierig replied that while this is possible, there are no programs in the bill which are targeted by geographic area.
Mr. Mark Kadesh, AQMD federal legislative consultant, gave a quick update on some additional board priorities. Mr. Kadesh reported that even though the International Maritime Organization took a much stronger position on ship emission reductions than originally anticipated, the agreement was still not quite stringent enough to help us reach attainment by key dates. Mr. Kadesh informed the committee he has been working with AQMD staff, in addition to meeting with senior staff in the Senate EPW committee, who are very sympathetic of AQMD’s concerns and are willing to raise them with EPA Administrator Jackson.
Mr. Kadesh recommended that AQMD should start prioritizing air quality issues in the federal highway and transit reauthorization bill and focus less on the spending bills. Mr. Kadesh reported that climate change is going to be an important legislation and should be kept on the board’s radar. He informed the Committee that Congressman Waxman’s goal is to pass a comprehensive climate and energy legislation before the Memorial Day recess. Mr. Kadesh added that the Senate is going to move an energy bill probably in March or April; however it is unlikely that a climate change bill will move in the Senate that quickly. He concluded by stating that surface transportation, marine vessel and climate change legislation will be the top subjects when board members visit Washington, D.C. for various meetings in the spring.
Update on State Legislative Issues
Mr. Will Gonzalez, AQMD state legislative consultant, reported that no information is being released regarding the budget. Mr. Gonzalez reported that the subvention funding for air districts remains likely untouched. He reported that the list of CEQA exempt transportation projects has not likely grown and is still believed to be at about eight projects (all in northern California). Mr. Gonzalez added that another issue of major concern is requests by business interests to rollback CARB’s off-road diesel rule.
Mr. Gonzalez also reported that Port of Oakland officials are lobbying the Governor’s office for the rollback of several port related emission reduction rules. He said that there are a few newly introduced bills that the committee should be aware of. These bills include: SB 124 (Oropeza) which codifies current CARB rules on school bus idling and allows for enhanced penalties, SB 42 (Corbett) which is in response to growing concerns from environmentalists on the impacts of coastal power plant cooling systems warming marine habitats and, AB 177 (Price), which intends to address environmental justice concerns in the implementation of AB 32 (Nunez) Global Warming Solutions Act of 2006.
Mr. Jason Gonsalves, state legislative consultant, reported that there is about a $14 billion package of tax increases, about $14 billion package of cuts and there is approximately $10 billion that is being counted on from the federal stimulus package. Mr. Gonsalves provided a quick rundown of proposed revenue enhancements being reported in the media which include a 1% sales tax increase across the board, an increase to the vehicle license fee to 1.15% of vehicle value, a 5% surcharge to taxpayers who owe personal income tax, and a reduction on the amount taxpayers can claim on a dependent care credit to the federal level of $100 instead of $300.
Status Report on Staff Efforts to Develop Enhancements to New Source Review (NSR) Emission Reduction Credits (ERC)
Dr. Elaine Chang gave a report on staff efforts to develop enhancements to New Source Review Emission Reduction Credits (ERC). Dr. Chang reported that the first kick off meeting was held on January 21, 2009. All stakeholders were invited and over 300 were in attendance. Dr. Chang stated that a status report on litigation and how new permits are being handled was shared with the stakeholders. They were also informed of the intent to formalize a working group that would look at the NSR program to identify potential near and long term solutions such as the availability offsets and the NSR implementation issues. Dr. Lyou asked if there is any precedent for options under consideration. Dr. Chang responded yes and also reported that when considering longer term solutions, strategies considered would possibly include leasing district credits to cover some short term needs or offset replacements.
Dr. Lyou inquired if there was any information on mobile source credits. Dr. Chang said the problem with mobile source credits is that they are not permanent. Dr. Lyou inquired if the environmental justice impacts would be addressed by targeting mobile equipment that stays in certain areas and Dr. Chang concurred. Dr. Lyou asked about two other credit generating opportunities, “road paving” and “head end power”. Dr. Chang informed him that these are two categories that were mentioned to stakeholders and are currently being looked at. Dr. Lyou asked if the formal working group would be meeting right away and how often will they be meeting. Dr. Chang replied that the working group would be meeting monthly and potentially could meet bi-monthly. Dr. Lyou additionally asked how long the process would take and Dr. Chang replied that the timeline is no longer than one year.
Mr. Greg Adams asked if it is possible to get around the inflexible structure under SB 288 (Sher) the Protect California Air Act of 2003 (SB 288, Sher; Health and Safety Code sections 42500 through 42507), which is designed to protect the stringency of California’s New Source Review (NSR) rules and regulations. Dr. Chang replied that was part of the discussion to be had with the stakeholders, and that, in the meantime, SB 288 or even the Clean Air Act should not limit the range of solutions that the group should consider. Mr. Adams stated that something be agendized immediately for the legislative committee. Dr. Wallerstein added that there is a high likelihood that an amendment to SB 288 may be required, but that the amendments needs to be very specific. .
Mr. Bill LaMarr asked what criteria is being utilized to select the members of the working group. Dr. Chang stated that members would consist of representatives from ARB and EPA, public agencies such as utilities and trade associations, consultants, those experienced with permitting, equipment suppliers and committee members.
Dr. Lyou stated that a well thought out analysis with perspective from the staff and stakeholders at the conclusion of this process would be very useful. Chair Jane Carney asked if there will be reports on the substance of what is coming out of the working group meetings. Ms. Carney stated that another committee other than the Legislative Committee should hear this, such as the Stationary Source Committee. Dr. Wallerstein agreed and stated that there would be reports from the working group.
Proposed Amendments to the 2008 Board Adopted Principles Regarding Alternative Power Generation [Attachment 2]
Mr. Oscar Abarca, Deputy Executive officer for Public Affairs briefed the Committee on the proposed amendments to the 2008 board adopted principles regarding alternative power generation.
Mr. Abarca explained that under the proposed amended principles the District remained fully in support of legislation that facilitates power generation from renewable sources and remained in support of the proposition that electric utilities should fully compensate their customers for any net surplus electricity generated.
Chair Carney and Dr. Lyou both asked what was meant by "limited flexibility" in meeting the 33% Renewable Portfolio Standard (RPS). Dr. Ganguli explained that it was meant to allow some flexibility. For example, the standard could be met by averaging compliance over a larger region or over a longer period of time. Ms. Elaine Chang further explained that this was compromise language attempting to permit some flexibility in the attainment standard without undermining the ultimate 33% RPS goal. Dr. Barry Wallerstein commented that the displaced power generation would be beneficial relative to both criteria pollutant emissions as well as to the offsets issue. Nevertheless, we did not want to see a trading scheme where we would end up with more than our regions fair share.
Dr. Joseph Lyou also asked for clarification on net-metering. Mr. Abarca replied that traditionally, feed-in tariffs provide a cash “wholesale” rate to the customer-generator. By contrast, net-metering traditionally provided a “retail” rate to the customer-generator, but only as a credit against the customer’s own power consumption. Dr. Ganguli further explained that net-metering has no money associated with it, but the feed-in tariff does.
Supervisor Roy Wilson asked staff to agendize an update on the status of all feed-in tariff and net-metering bills for next month’s meeting.
The Legislative Committee recommended adopting the Proposed Amendments to the 2008 Board Adopted Principles Regarding Alternative Power Generation.
Proposed Guiding Principles Regarding “Smart Grids” [Attachment 3]
Dr. Anupom Ganguli briefed the Committee on the Proposed Guiding Principles Regarding “Smart Grids.” He explained that many states, including California, are beginning legislative and regulatory efforts to upgrade the electric power system with “Smart Grid” technology. Likewise, the federal stimulus package that is being passed in Washington D.C. contains almost $5 billion in seed money for these efforts.
He emphasized that Smart Grid technology is much more than mere net metering. It encompasses a whole range of transmission and communication infrastructure involving both hardware and software linking the entire electrical supply and demand system - including power plants, factories and even consumer products in the home.
Dr. Lyou asked about the term “technology neutral”. Dr. Ganguli explained that technology neutral efforts are necessary to ensure competition and to ensure that the approaches are as comprehensive as possible. Dr. Lyou asked, what are the competing types of technologies that might be used. Mr. Paul Wuebben replied that one would be internet based software and the other security enhanced with some limitation on the generic access. Dr. Lyou asked how many bills are relative to this and Mr. William Sanchez informed the Committee that currently there is one bill that has been introduced and two under discussion in various offices. Moreover, with the federal seed money and the heightened interest in various states, it was anticipated that there would be increased legislative activity on this issue.
The Legislative Committee approved the principles propose for Smart Grid Systems.
Public Comments
None.
Legislative Report from AQMD Home Rule Advisory Group Committee [Attachment 4]
Please refer to Attachment 4 for a written report.
Attachments (EXE, 89k)
- Attendance Roster
- Proposed Amendments to the 2008 Board Adopted Principles Regarding Alternative Power Generation
- Proposed Guiding Principles Regarding “Smart Grids”
- Legislative Report from AQMD Home Rule Advisory Group