Governor signs more greenhouse gas bills

By CMTA Staff

Capitol Update, Oct. 6, 2006 Share this on FacebookTweet thisEmail this to a friend

A few days after the photo opportunity signing of the landmark greenhouse gas (GHG) cap bill on Treasure Island, Governor Schwarzenegger signed two other GHG-related bills and another relating to customer-owned generation, minus the pomp and ceremony.

SB 1368 (Don Perata, D-Oakland), creates a GHG performance standard for baseload generation and prohibits a load serving entity from entering into a long-term financial commitment unless the baseload generation supplied complies with a GHG emission performance standard (to be established by the California Energy Commission).  It effectively prevents utilities from entering into long term contracts for out-of-state coal plants.

The approach required by SB 1368 will limit the ability of utilities to make long-term purchases, discriminate against low-cost coal resources, increase costs to businesses and retail-end customers and threaten the reliability of the state’s electric grid, particularly during peak hours.

The Governor also signed into law SB 1505 (Alan Lowenthal, D-Long Beach), which will require the California Air Resources Board to adopt regulations ensuring that state funding for hydrogen fuel production contributes to the reduction of GHG emissions, air pollutant emissions and toxic air contaminants, with a requirement that no less than 33.3 percent of the hydrogen is made from eligible renewable energy resources.

SB 1505 will hinder efforts to develop hydrogen as a transportation fuel in this state.  It places in statute overly prescriptive standards when hydrogen technology is still in its early stage of research, development and demonstration.

SB 1505 will chill investment in the development of hydrogen technology and unnecessarily lock in statute a long-term policy on hydrogen fuel for transportation. Instead of encouraging innovation, this measure will stifle it and cause distortion in the hydrogen market at its very inception.

AB 2778 (Sally Lieber, D-Mountain View), which removes fossil fuel combustion technologies from the Self-Generation Incentive program (SGIP) was also signed into law.  Under the bill, starting Jan. 1, 2008, the SGIP is limited to fuel, wind and qualified waste gas applications.

AB 2778 eliminates the most efficient technologies within SGIP – technologies that provide significant grid reliability and environmental benefits to California.  One such technology is natural gas combined heat and power (CHP), also known as cogeneration, where heat that would otherwise be wasted is used to generate electricity. 

CHP provides an important environmental benefit by reducing GHG emissions, as noted in the state’s  CEC "Integrated Energy Policy Report".  Natural gas-fueled CHP reduces the state's GHG emissions from power generation by up to 65 percent compared to a typical California power plant.  The Climate Action Team report targets CHP for 2.4 percent of 2020 GHG emissions goals.  Furthermore, according to the 2005 CEC "Integrated Energy Policy Report", natural gas CHP is the most cost-effective form of distributed generation.

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