Legislature Extends Greenhouse Gas Cap-and-Trade Program: AB 398 and AB 617

(Jessica Kirshner, a 2L at the University of San Diego School of Law, wrote this post.  It was minimally edited for publication.)

AB 398 and AB 617 are the latest push by the legislature to meet SB 32’s greenhouse gas (“GHG”) reduction goals to reduce the statewide GHG emissions 40% below the 1990 level by 2030.  AB 398 – passed Monday by the Senate (28 to 12) and Assembly (55 to 22) – extends the GHG Cap-and-Trade Program (“Program”), through 2030 and provides for cap-and-trade revenue appropriations to fund specified priorities.  AB 617 – also passed Monday in the Senate (27 to 13) and Assembly (50 to 24) – imposes stricter emissions monitoring standards and increases air district penalty authority over emitters of toxic and criteria air-pollutants, particularly for stationary emissions sources near disadvantaged communities (“DAC’s”).  These bills are enrolled and await the signature of Governor Brown to become law.  If signed, AB 398 will take effect immediately as an urgency statute. Continue reading

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Exercising Discretion in CEQA EIR GHG Analysis: Cleveland National Forest v. SANDAG

Yesterday, the California Supreme Court issued a narrow opinion on the appeal by the San Diego Association of Government (SANDAG) of the appellate decision in Cleveland National Forest Foundation et al., v. San Diego Association of Government.  The California Supreme Court granted review on narrow grounds: “Must the environmental impact report for a regional transportation plan include an analysis of the plan’s consistency with the greenhouse gas emission reduction goals reflected in Executive Order NO. S-3-05 to comply with the California Environmental Quality Act (Public Resource Code, § 21000 et seq.)?” The California Supreme Court held in a 6-1 decision that SANDAG did not abuse its discretion in its environmental impact report (EIR) greenhouse gas (GHG) analysis either by declining to adopt the Executive Order (EO) No. S-3-05 2050 emission reduction target as a measure of significance or by not discussing the EO more than it did in its analysis and response to comments.  The limited review of this opinion keeps in place all other holdings of Court of Appeal affirming the trial court’s judgement that the 2011 EIR’s analysis of GHG emission mitigation was inadequate, included identified EIR deficiencies, and affirmed issuance of a writ of mandate setting aside the EIR’s certification on these grounds. You can read more about that appellate decision here.

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Are All RPS Compliance and RECs Created Equal?

(Many thanks to Meghan O’Brien for her research, analysis and writing for this post).

EPIC has written a series of blogs on the role of renewable energy credits (“RECs”) in various policy mechanisms to reduce greenhouse gas emissions (“GHG”), such as climate action plans. But not all RECs are created equal, and the manner in which different load serving entities use compliance mechanisms to meet their Renewable Portfolio Standard (“RPS”) obligations are different and may have significant impacts on GHG reductions and policy goals. This post will aim to bring those impacts to light through discussion of the following topics:

  • RPS Portfolio Balancing Requirements, Portfolio Content Categories, and RECs.
  • Portfolio Content Category 0 and its implications on GHG reduction and other California policy goals.
  • RPS compliance obligations for different entities (Investor owned utilities (IOUs), publicly owned utilities (POUs), Electric Service Providers (ESPs), Community Choice Aggregators (CCAs))

For those interested in substantiating claims of the level of “greenness” of electricity supply, in particular with respect to the unbundled RECs in a supplier’s portfolio, the supplier’s existing supply contracts from pre-2010, when the current RPS compliance requirements came into effect, must also be assessed.

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Supreme Court Denial of Petition Upholds Appellate Decision on Cap-and-Trade

The Supreme Court denied a petition to review the Third Appellate District court decision on the California Chamber of Commerce, et al. v. California Air Resources Board, et al consolidated cases.  In that decision, the Third Appellate District affirmed a Sacramento Superior Court judgment from 2013 that dismissed two consolidated lawsuits filed by the California Chamber of Commerce and Morning Star Packing Co against the California Air Resources Board (CARB).  These cases attacked the sales of allowances under CARB’s Cap-and-Trade program. The California Chamber of Commerce suit alleged that the AB 32 (California Global Warming Solutions Act of 2006) did not authorize CARB to impose fees in the form of a cap-and-trade auction beyond those required to recover the costs of administering such a program.  The Morning Star Packing suit alleged that even if CARB’s cap-and-trade auction was authorized, the sale of allowances constitute an illegal tax adopted in violation of Proposition 13’s 2/3 approval requirement for taxes. The parties appealed the superior court judgment.  You can read more about the appellate decision in my previous post.

This now removes the most recent legal challenge to cap-and-trade but still leaves the question of authorizing the program beyond 2020.  Whether the legislature and governor can muster the support to extend Cap-and-Trade program beyond 2020 is an open question.  Assemblywomen Cristina Garcia’s (D-Bell Gardens) introduced AB 378 this year but it failed to pass the Assembly this session.  This leaves 2018 as the next likely possible legislative opportunity unless parliamentary rules are used to revive this bill or its cap-and-trade authorization before September 15, 2017.

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Legislative Update June 2017

The deadline for bill to pass out of their house of origin occurred on June 1, 2017.  The following is a short list of important bills that met this deadline as well as two pieces of legislation that may move forward under legislative parliamentary rules. Continue reading

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Third Appellate District Upholds CARB’s Cap-and-Trade Auction Authority under AB 32

Today, the Third Appellate District affirmed the Sacramento Superior Court judgment from 2013 that dismissed two consolidated lawsuits filed by the California Chamber of Commerce and Morning Star Packing Co against the California Air Resources Board (CARB).  These cases attacked the sales of allowances under CARB’s Cap-and-Trade program. The California Chamber of Commerce suit alleged that the AB 32 (California Global Warming Solutions Act of 2006) did not authorize CARB to impose fees in the form of a cap-and-trade auction beyond those required to recover the costs of administering such a program.  The Morning Star Packing suit alleged that even if CARB’s cap-and-trade auction was authorized, the sale of allowances constitute an illegal tax adopted in violation of Proposition 13’s 2/3 approval requirement for taxes. The parties appealed the superior court judgment.

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2017 Legislative Session: Two Bills Seek to Amend the Solar Rights Act relating to HOAs

Two recently amended bills, AB 634 and SB 522, address issues faced by residential property owners who live in common interest developments that seek to install rooftop solar.  Both bills would amend the Solar Rights Act, but for different purposes.  I previously posted about the emerging issue between the Solar Rights Act and Davis-Stirling Common Interest Development Act (DSA) that AB 634 proposes to address. Through a different approach, SB 522 would change the voting requirement for a HOA that mandates association-wide voting for architectural modifications, such as rooftop solar installation.  The difference between these bills is discussed below.

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