CalChamber-Opposed Bill Will Increase Energy Costs

Legislation that will lead to increased energy costs has passed the Senate, is under consideration in the Assembly and is opposed by the California Chamber of Commerce and a coalition of industry groups and local chambers of commerce.

SB 64 (Wieckowski; D-Fremont) arbitrarily imposes severe limitations on the operation of energy-generating facilities and unnecessarily increases costs for ratepayers by creating a short list of facilities subject to immediate shutdown with only 24 hours’ notice on days when forecasts predict air quality will exceed state or federal ambient air quality standards—otherwise known as non-attainment days.

The bill jeopardizes the state’s ability to maintain a reliable electric grid when demand is high while ignoring other air pollution sources.

SB 64 purports to address air quality during non-attainment days, but there is no data to show that such shutdowns will have a measurable impact on local air quality. Instead, the bill allows arbitrary shutdown by local balancing authorities.

Ignores Shutdown Requirements

Unfortunately, the bill fails to recognize the complexities of shutting down and starting up a facility. Although SB 64 allows for an exception from shutdown if energy demand peaks, what the bill does not do is recognize that facilities cannot always be shut down or started back up immediately.

Depending on the complexity of a facility, it may take several days to safely shut down equipment and then days to safely start back up. What happens when a facility cannot start back up quickly enough to meet peak energy demands, which can fluctuate quickly?

Businesses depend upon a reliable energy grid, and will end up shouldering the burden of increased rates resulting from this arbitrary bill.

Unanswered Questions

SB 64 creates more questions than it answers. For example, the bill does not address how, which, in what amount, or in what order the “short list” facilities will be brought back on-line when (and if) a non-attainment determination is lifted. Instead, SB 64 gives the balancing authority broad discretion to choose from the short list.

Other unanswered questions include: Will all the short-list facilities face shutdown every time? Only some? A portion of capacity of each facility? Once the short list is created, what factors will the balancing authority use to decide which to shut down and which to maintain if all are on the short list and all are operating within their permit limits? What happens to the workers who are scheduled to work during these forced shutdowns? How does this comply with due process requirements under the law?

Hurts Energy Reliability

The health of the public, employees of a company, and the environment are a priority of the state. However, arbitrary and immediate shutdowns will hinder the ability of the state to maintain a reliable energy supply and create yet another layer of logistical and financial hurdles for energy producers and increased costs for California ratepayers.

Existing Authority

More effective solutions already exist. If the intent of the bill is to protect the public, current law already gives an air pollution officer authority to order a facility to shut down if the officer finds there is an “imminent and substantial endangerment to the public health or welfare, or the environment.”

Significant penalties for violations are already imposed by the law, which was enacted just last year (AB 1132; C, Garcia; D-Bell Gardens; Chapter 171; Statutes of 2017).

Current law is sufficient to address the air pollution concerns that SB 64 purports to address. A needlessly complicated law that does nothing to address air quality is not the solution.

Action Needed

SB 64 is scheduled to be considered by the Assembly Natural Resources Committee on June 18. The CalChamber is urging members to contact their Assembly representatives and committee members to ask them to oppose SB 64.

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Staff Contact: Leah Silverthorn

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Leah B. Silverthorn served as a CalChamber policy advocate from May 2018 to February 2022. She specialized in climate change, air quality, energy, environmental justice, marijuana/cannabis, and transportation and infrastructure issues. She brought to the CalChamber more than a decade of legal experience in environmental, energy, and land use matters. Immediately before coming to CalChamber, she was the principal owner of Silverthorn Legal, based in Seattle, Washington. She focused on environmental litigation, contaminated property redevelopment, and environmental cost recovery and defense. She is an honors graduate of Indiana University-Bloomington, with a B.S. in public affairs and environmental management. She earned her J.D., with honors, at the Indiana University McKinney School of Law, where she was articles editor for the Indiana International and Comparative Law Review and a member of the Moot Court Board.