South Coast Air Quality Management District
South Coast Air Quality Management District
BOARD MEETING DATE: February 16, 2001 AGENDA NO. 31
Legislative Committee
SYNOPSIS:
The Legislative Committee considered agenda items including the following legislative proposals for which the Board will consider adopting positions:
ABX1 XX (Frommer) - Emission Offset Fees
SBX1 28 (Sher) - Powerplant Siting
RECOMMENDED ACTION:
Approve the legislative positions recommended below.
Beatrice J.S. LaPisto-Kirtley, Chair
Legislative Committee
Attendance
The Legislative Committee met on February 9, 2001. Present were Committee Chair Beatrice LaPisto-Kirtley, Vice Chair Jane Carney, and Committee members Michael Antonovich, Cynthia Verdugo-Peralta and Roy Wilson (by videoconference). Pursuant to the Procedures for Standing Committees of the Governing Board, adopted March 8, 1996, Norma Glover, AQMD Vice-Chair, was appointed as an ad hoc member of the Legislative Committee for the February 9, 2001, meeting only. (Attachment 1)
Washington Update
Peter Robertson and Ed Newberry, AQMD Washington Legislative Representatives, reported that Congress is now organized, with the exception of a few committees. Changes to the House Appropriations Committee leave only two of four representatives from the South Coast Air Basin on the Committee: Congressional members Jerry Lewis and Lucille Roybal-Allard remain. The other two seats were lost through the retirement of Congressman Ron Packard and the death of Congressman Julian Dixon. Although there are now fewer members from the Basin on the committee, Mr. Lewis and Ms. Roybal-Allard are high-ranking members on the Committee and the AQMD could still be successful in promoting some additional funding for the Basin. Senator Feinstein remains on the Senate Appropriations Committee.
Work continues with AQMD staff to formulate funding proposals for Congressional support. The proposals will be presented to potential supportive members and will then be forwarded to the Appropriations Committees for consideration.
Senator Bob Smith [R-New Hampshire], Chair of the Senate Environment and Public Works Committee, has indicated an interest in pursuing legislation to create a "cap and trade" program for utilities, similar to US EPA's successful Acid Rain Program. AQMD may want to get actively involved in this issue, consistent with one of the AQMD legislative priorities for 2001 to remain a leader on clean air policy issues before Congress. Getting involved on this issue may be one of the most direct ways to do that. Senator Smith has also expressed an interest in legislation to further reduce emissions from automobiles, and plans to send a legislative delegation to Detroit to meet with automobile manufacturers to look at all technology, automobiles and fuels.
There are currently a number of trade organizations, including the road builders, interested in streamlining the environmental review of highway projects. Most federal highway projects receive review under the National Environmental Policy Act and road builders and others suggest that this review inordinately delays construction of projects and burdens them unnecessarily. Environmentalists suggest it is an important way to try and ensure that wetlands are not destroyed and air pollution is not created by building unnecessary roads. The debate has been on going and there were efforts in the last Congress to streamline environmental reviews. The road builders are hoping to have a better chance this year.
Chair LaPisto-Kirtley asked if Senator Smith could be approached on the issue of trying to move the date forward, or ensure it is not deleted, for low sulfur fuel. Mr. Robertson responded that Senator Smith’s committee will have primary jurisdiction over any efforts to deal with US EPA regulations on sulfur fuel content, so Senator Smith will be central to the debate and could be approached.
Ms. Carney mentioned there is a bill being introduced by Congressman Jim Oberstar (D-Minnesota), in the aftermath of the court ruling regarding NAFTA trucking, to require trucks to comply with US safety standards, and asked if there was anything to require trucks to comply with US emission standards. Mr. Newberry responded that this is a very important issue, which has not yet received attention. Bringing the environmental issues together with the safety and trade issues may start to create momentum for this bill. Mr. Newberry stated he would look further into this issue, not just in the context of the proposed bill, but as a stand-alone issue as well. Chair LaPisto-Kirtley commented that the environmental justice aspect of this issue is that trucks are coming in and polluting the Basin and asked if Brian Faughnan in Congressman David Dreier’s office could be contacted to get the Congressman’s view on this issue, since it would directly impact his area. Mr. Robertson responded that he will be meeting with Mr. Faughnan and will address this issue.
Ms. Carney asked which members from the South Coast Air Basin would be key players on clean air issues. Mr. Newberry responded that the closest direct players are Congressmen Henry Waxman and Chris Cox, both members of the House Commerce Committee. Congressman Waxman is looked at as one of the experts in the House on clean air issues. Congressman Cox would be the other member because it is especially important in this Congress to have bipartisan support. There is also Congressman David Dreier who has helped on these issues in the past and wants to continue to be helpful.
Lastly, one of the significant focuses of both the new Administration and the new Congress is energy legislation. The President has established a special task force on energy, headed by the Vice President, to come up with an energy policy for the Administration to submit to Congress. Additionally, in the Senate the Chair of the Energy and Natural Resources Committee is also submitting the Republican leadership package on energy security legislation, which may include waiving some environmental laws.
Sacramento Update
Allan Lind, AQMD Sacramento Legislative Representative, reported that he is meeting with Legislators and staff to lay the groundwork on the importance in finding new funding for the implementation of the fleet rules and is also addressing other issues outlined in the AQMD’s 2001 legislative proposals. (Attachments 2 and 3) Language to give the Governing Board and Hearing Board authority to issue orders of abatement to prevent future violations has been submitted to Legislative Counsel, but an author has not yet been secured. The deadline to introduce legislation is February 23. Mr. Lind also mentioned that Assemblyman Marco Firebaugh has been appointed as the Chair of the Latino Caucus. He will succeed Richard Polanco.
Barry Wallerstein, Executive Officer, stated that he and AQMD Vice Chair Glover attended a meeting where ARB’s tentative rulemaking schedule for retrofitting of diesels was reviewed. The schedule does not seem to be moving as quickly as it could. The Governing Board directed staff, based on a motion by Board member Bernson, to seek authority to accelerate the retrofitting of diesels. Potentially, if ARB did not accelerate the process then the AQMD could seek authority to retrofit diesels in the South Coast Air Basin.
Funding this year is complicated by the energy crisis. Over 80 bills have been introduced during the current legislative special session for the purpose of addressing the electricity crisis. Many are overlapping and contain similar ideas. The general approach that the Legislature and the Governor are trying to take is to first stabilize the market, then restore the credit worthiness of the investor-owned utilities to avoid their possible bankruptcy, and then address ways to accelerate or streamline the permit process for siting powerplants. The Governor has already approved legislation to stabilize the market. The Legislature is currently working through legislation restoring the credit worthiness of the investor-owned utilities, and work on the permit streamlining process should heat up over the next few weeks. Regarding permit streamlining, the Energy Commission was created in 1973 specifically for the purpose of streamlining the permitting of powerplants. They reduced a process that took five or six years to one year and now proposals want to take the one-year process and reduce it to a matter of weeks. Part of the next wave of legislation will involve bills that will be appropriating funds to invest in conservation and energy efficiency. There may be interesting prospects here for air districts to become involved to contribute ideas for energy efficiency and conservation, since the two approaches could provide significant air quality benefits.
Mr. Lind reported that the permit streamlining arena is perhaps most problematic for the AQMD because there have been proposals to exempt certain types of powerplant projects from CEQA to compress the time frames for local jurisdictional review, including air district reviews. The Governor issued a series of executive orders on February 8 with a game plan for increasing the supply of power. Executive Order D-24-01 focused on the role of the ARB and air districts. (Attachment 4) Mr. Lind explained that the executive order, among other things, orders all local air districts to modify the emission limits on hours of operation of power generation facilities and to remove restrictions on those hours of operation. It also provides that air districts shall require mitigation fees for increased operation and it further authorizes the ARB to do this for the air districts if the air districts are not able to comply or choose not to comply.
Dr. Wallerstein stated that the bottom line is that if air districts do not expeditiously carry out the intent of the executive order, the ARB can. All contracting procedures that the state normally has to go through have been waived and ARB can go out and hire someone immediately to help do the work. There is, however, a lack of clarity in how the executive order is written in terms of how things are actually supposed to be done and what they will mean. A conference call is scheduled for CAPCOA to discuss the executive order further.
Dr. Wallerstein added that one concern with the executive order is that the AQMD may go through weeks or months of work and conduct public hearings with the possibility of the effort being immediately overturned by ARB because they decide to issue an order to do something differently. Another aspect of the Governor’s executive order is that it authorizes the ARB Executive Officer to take these actions, not the ARB Board, which has good representation from a number of air districts in the state.
Ms. Verdugo-Peralta asked if there is a time frame for when facilities are considering installing controls. Dr. Wallerstein responded that staff has an outline for the various powerplants in the basin and there are a significant number of permits that have already been issued and another set of permits expected to be issued in the next 90 days.
Chair LaPisto-Kirtley inquired as to whether the Governor’s executive order requires facilities to use their cleaner plants first and then use the dirtiest when absolutely necessary. Dr. Wallerstein responded that the AQMD’s executive order maintained one of the provisions of the settlement agreement with AES that had limited environmental dispatch. The executive order issued by the Governor does not provide for environmental dispatch. However, the contents of the AQMD’s executive order were discussed with Chairman Burke, US EPA and ARB, and even though there was ARB staff concurrence on what the AQMD was issuing, there are differences in the Governor’s executive order. Dr. Wallerstein added that there is no reason not to have a provision like that for the peaking units. The last AQMD executive order issued contained parameters that AES said they could operate in.
Mr. Lind observed that the Governor’s executive order states that ARB will create an emissions credit trading bank, making use of appropriated funds, but does not state the source of the funds. Since an executive order cannot appropriate funds, the funds are presumed to come from ARB’s existing budget which are funds the AQMD would be interested in, such as funding for the school bus replacement program, the Carl Moyer Program, and subvention funding. Dr. Wallerstein stated that this is a concern and requests have been submitted for funds appropriated last year for these programs. The hope is that if money appropriated for other programs is needed, that it will be replenished.
Ms. Carney asked if the scenario could happen under the ARB’s proposed emissions reduction credits bank, where ARB could presumably buy emission reduction credits from any place in the state and then site a powerplant in one area with emissions, but the credits are from another area. Dr. Wallerstein responded that he did not believe that was the intent, but under a worst case scenario that could happen. The hope is that this will be handled like the Carl Moyer program and the AQMD will be able to direct the money at fleets that will generate NOx reductions. Although it is not Carl Moyer program money, there will still be the same end result to air quality, except that instead of crediting the Air Quality Management Plan, the ARB will give or sell the credits to power producers. The issue of whether the AQMD will do its share of the emissions reduction credit bank or if ARB will operate the whole thing for the state is still up for discussion. Ms. Baird pointed out that the Governor’s executive order does say that proceeds from the sale of these credits shall be made available to fund emissions reduction programs in the air district where the new or expanded facility is located.
Recommended Positions on Bills
Mr. Lind reported that there are approximately 80 bills addressing the electricity crisis, and 13 of those bills have a bearing on air quality. Summaries of the 13 bills were distributed to the Committee. (Attachment 5) Most of the bills are a "work in progress", but on two bills Mr. Lind recommended the Committee consider adopting a position. The Legislative Committee considered positions on the following bills:
Bill/Title |
Recommended Position |
|
ABXI XX (Frommer) – Emission Offset Fees |
SUPPORT |
|
SBXI 28 (Sher) – Powerplant Siting |
SUPPORT |
ABXI XX, Frommer, would, at the option of a project applicant, increase the threshold to 100 megawatts for siting of thermal powerplants that have submitted a permit application to the appropriate air district between January 1 to September 30, 2001. Additionally, to the extent provided under the federal Clean Air Act, an applicant may pay an air emissions mitigation fee to the appropriate air district for expenditure by the air district pursuant to the Carl Moyer Program. Mr. Lind stated that although the bill does not yet have a bill number, the author and the proponents contacted the District when crafting this bill in order to conform to issues and concerns raised by the District.
Dr. Wallerstein commented that Assemblyman Frommer has worked cooperatively with staff and it would be appropriate for the AQMD to take a support position on this bill. Dr. Wallerstein also recommended that the Committee consider requesting the Board Chair to consider agendizing for the February Board meeting a resolution outlining general principles regarding key issues related to the various electricity bills, so the AQMD could have a general policy statement from the Board.
Ms. Glover asked if someone at the state level is reviewing the various energy bills for a focus. Mr. Lind responded that there is somewhat of a void in trying to orchestrate all of the legislation. The Governor is talking to the Legislature and they have agreed on a set of principles, but the details do need to be tamed and consolidated. Mr. Lind commented that while it is a chaotic process, there has been a systematic movement from the initial effort to stabilize the market, then the effort to return solvency and credit worthiness to the utilities, and then the current effort to deal with powerplant siting, energy efficiency and conservation.
Mr. Lind stated that Assemblyman Frommer’s bill is a well thought out bill and, if it moves quickly, it will preempt the field addressing the issue of mitigation fees. The bill contains some very important provisions that allow local air district discretion in the management of the mitigation fees. The Legislative Committee concurred with Mr. Lind’s recommendation to Support Assemblyman Frommer’s proposed bill ABXI XX.
SBXI 28, Sher, will require the ARB, in consultation with air districts and the CEC, to implement a program for the expedited retrofit of electrical generating facilities to ensure that the facilities are permitted to operate in a manner that complies with applicable statutes and regulations. The bill will also require ARB to implement a program for the identification of emission reduction credits for electrical generating facilities and make that information available to the public and interested parties. Mr. Lind stated that this bill provides guidance to ARB and air districts to develop a coordinated, expedited siting process. Senator Sher has been in the arena for a very long time and has a good feel for the subject matter. Mr. Lind added that the bill is well written and the principles contained in the bill are consistent with issues the AQMD is concerned with. Dr. Wallerstein added that Senator Sher’s office contacted staff to discuss the proposed language and receive AQMD feedback. The Legislative Committee concurred with Mr. Lind’s recommendation to Support SBXI 28.
Ms. Carney stated that she learned one bill being proposed regarding interruptible power supply customers would allow unregulated use of backup diesel generators and prohibit the air districts from placing limits on the use of backup generators for those customers. She asked that staff watch for this bill and other similar bills.
Other Business/Public Comment
No other business/public comment.
/ / /