Gino DiCaro

Utility environmental performance standard bill making gains

By Gino DiCaro, VP, Communications

Capitol Update, July 8, 2006 Share this on FacebookTweet thisEmail this to a friend

SB 1368 (Don Perata, D-Oakland), which prevents utilities from entering into long term contracts for out-of-state coal plants, recently passed two Assembly policy committees and awaits a hearing in the Assembly Appropriations Committee.

The bill creates a Greenhouse Gas (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).

The approach proposed in SB 1368 would 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 bill will likely encounter some problems in the Appropriations Committee, given it’s significant impact on utility procurement costs.

The last fiscal analysis of the bill occurred in May, when the Senate Appropriations Committee analysis noted that the measure’s GHG standard could increase electricity prices.

According to the committee analysis, "to the extent the [SB 1368] regulations limit the number of suppliers who may provide power to the California market, the bill could increase wholesale electricity costs."

While this fiscal impact would likely push the bill into the "suspense" file, it is also likely that the author Senate President Pro Tempore Don Perata will have no problem moving the bill to the Assembly floor.

CMTA and other members of the "Sustainable Environment and Economy for California Coalition" (SEE California) strongly oppose SB 1368. SEE’s top priority is to ensure that efforts to reduce GHG emissions in California are accomplished in a manner that will not jeopardize our state's economy, jobs or energy supply.

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