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A New Wind Blowing:
Assembly Bill 32 Impacts Special Districts

by Barbara Crane

Over 40 years have passed since Bob Dylan first sang, "The answer, my friend, is blowin' in the wind."  Today, the lyrics could be amended to include solar, geothermal and biogas, creating a meditation on alternative energy out of the singer's original human rights protest.

If that were to happen, Governor Arnold Schwarzenegger might be credited with inspiring the shift by issuing Executive Order S-03-05 in 2005, which set targets for reducing climate-changing greenhouse gases- to 2000 levels by 2010, to 1990 levels by the year 2020 and to 80 percent of 1990 levels by 2050.  

To achieve those goals, the governor established a Climate Action Team, composed of representatives from various state agencies coordinated by the California Environmental Protection Agency (CalEPA). Their 2006 report suggested strategies to reach the 1990 target and laid the groundwork for AB 32, the Global Warming Solutions Act. In late 2008, the California Air Resources Board-the primary agency responsible for attaining AB 32's goals-approved a Scoping Plan.

This plan sets the stage for one of the main topics to be covered at the 2009 Green California Summit, taking place at the Sacramento Convention Center March 16-18, 2009.  At the Summit, leadership from all levels of California government, and the private sector that provides products and services to government, will be discussing the implications of the AB 32 Scoping Plan.

"The plan lays out the path the state will be on for the next two years in terms of developing regulatory and other mechanisms for meeting the 2020 goal," says Andrew Altevogt, climate change program manager at CalEPA. "We have two years to develop the regulations. By the end of 2010, we need to have the full set of measures in place." The regulations will become enforceable on January 1, 2012.

The largest reductions will come from implementing new vehicle greenhouse gas standards, promoting increased energy efficiency measures and increasing the percentage of energy that is generated from renewable sources. Renewable portfolio standards require electric utilities and other retail electric providers to supply a specified minimum amount of customer load with electricity from eligible renewable energy sources, such as wind, solar or geothermal. "Currently, the state is mandated to get to 20 percent renewable energy sources by 2010. In the scoping plan and a recent Executive Order (S-14-08), the use of renewables has been increased to 33 percent by 2020," Altevogt says.

A cap-and-trade program is an important component of the plan. "The cap draws a line in the sand, so to speak. It sets the overall emissions for a number of sectors, such as fuels, energy and certain large industrial processes, like cement manufacture." Altevogt says. "The total emissions allowed in 2020 are 422 million metric tons, and the capped sectors are set at 365, so you're getting most of your reductions under this cap, largely from energy efficiency and renewable generation."

Facilities that achieve reductions beyond the established cap are allowed to trade (sell) their leftover allowances, creating a financial incentive for aggressive action and a means for companies that cannot yet comply to purchase "pollution credits." California's cap-and-trade program will be developed in conjunction with the Western Climate Initiative, composed of seven states and four Canadian provinces that have committed to cap their emissions and create a regional carbon market.

What Does AB 32 mean for Special Districts?
Even while specific measures aimed at reducing greenhouse gases are still being decided, AB 32 has influenced the actions of many of California's special districts.  "Seeing the legislation on the horizon, people began incorporating AB 32 into their planning around 2005, prior to the law's adoption," says David Kolk, PhD, manager of supply and trading for the Imperial Irrigation District (IID) in Imperial County, California.  "We began looking at how to reduce our carbon footprint in generating power in 2006. AB 32 will have a tremendous impact on the type of generation and type of resources that we purchase going forward."

The IID launched a marketing campaign in 2006 aimed at informing homeowners and business owners about solar power and offering financial incentives. The district has helped 153 residences and one large hospital install solar roofs. The solar projects generate about 2.5 MW of power combined, equal to the energy requirements of about 2,000 homes. "Prospectively, we have 28 separate power plants, both solar and geothermal, in our district that are asking to be connected to our transmission system," says Brian Brady, PhD, IID's General Manager. "These projects would support 2,400,000 homes, a tremendous increase in capacity from renewable energy sources."

In the longer term, the IID is looking closely at geothermal power, because the district lies on one of the richest geothermal sources in the world. "In the next two or three years, we'll have close to 100 MW for the district's use. AB32 will encourage us to purchase somewhere over 200 MW of geothermal over the next decade," Kolk says. The IID is also looking at wind and biogas as alternative energy sources. At the same time, the agency will retire older generating plants and stop using coal from out of state coal plants that can no longer be treated as emission-free within the state.

The Mojave Desert Air Quality Management District also used the impetus offered by AB 32 to reduce greenhouse gases. "Knowing that greenhouse gas regulations were just around the corner, and always looking for ways to reduce our overhead costs, we lowered our grid electrical consumption by 54 percent and saved $375,000 in operating expenses in 2008," says Eldon Heaston, executive director, Mojave Desert AQMD. The savings in energy and dollars have come largely from three programs to date: installation of a rooftop solar array at its Victorville headquarters; a lighting retrofit project; and a rerouting of service calls, which enabled the district to lower its vehicle emissions. The district's greenhouse gas reductions were certified by the California Climate Action Registry, a California nonprofit which helps organizations measure, verify and report their greenhouse gas emissions. The Mojave Desert AQMD was the first air quality district to join the Registry.

"We've set a case example that shows it makes good government and good business sense to use all the alternative energy sources that achieve the goals of AB 32," Heaston says.

More Special Districts Respond to the Challenge
The Sonoma County Water Agency (SCWA) is another special district that has taken up the challenge of reducing greenhouse gases in their operations. "The public we serve strongly supports climate protection," says Tim Anderson, the agency's government affairs coordinator. "We take this as a mandate from the people we serve. We also have a responsibility as leaders to keep the public informed about the threat we face from climate change and what can be done to reduce the future risk. We have to be leaders. "

Investigating ways to cut greenhouse gas emissions, the agency found it used over 1,300 kW-hours of electric power to deliver an acre-foot (approximately 326,000 gallons) of water, and more to treat and reuse water. The agency responded by developing conservation measures that will save more than 20 million kW-hours per year by 2020. SCWA also took advantage of state rebate programs to install solar photovoltaic power on the roofs and over parking areas at its administration building and wastewater plants. These measures-in addition to purchasing power provided from landfill biogas from a local solid waste facility and reducing water deliveries by 20 percent with a mandatory conservation program-enabled the agency to reduce annual emissions by 46 percent between 2006 and 2007.

Now the SCWA is working to be carbon free by 2050, "that is, having no CO2 emissions from water supply operations," Anderson says.

Sometimes the key to reducing an agency's carbon footprint lies in joining forces with another agency, such as the partnership between Central Contra Costa Solid Waste Authority (CCCSWA) and the East Bay Municipal Utility District (EBMUD). The two special districts have teamed in a cutting edge effort to turn food waste into electricity. Commercial food waste from restaurants, grocery stores, supermarkets, schools and hospitals represents about 20 percent of the total waste stream. Burying the waste in a landfill takes up space and produces methane, a greenhouse gas, says Paul Morsen, the waste authority's executive director.

Restaurants and other contributors to the food waste stream in CCCSWA's service area are currently involved in a pilot project. The restaurants "clean" their waste, that is, remove any flatware or packaging. This waste is picked up separately by the waste authority, ground into small pieces and trucked a short distance to EBMUD's treatment plant, which captures the methane and pipes it to their electrical co-generation facility. There it is burned to make electricity to run the plant. The excess power not needed to run the plant is sent back to the grid to power homes and businesses. "We're processing about three trucks a week," Morsen says. "We'd like to haul one load every business day," a number he believes can be reached once the project is fully implemented. One truckload a week could provide power to as many as 1,400 homes.

"The restaurants have all been pleased to cooperate," Morsen says. "They report that it takes little time to ‘clean' the wastes, and they feel good about contributing to a green effort."

Changes in the Wind
There's no doubt that AB 32 will change the ways that special districts operate. "At this time, no one is in compliance with AB 32; we're all above 1990 levels," Brady says.  Over the next 10 to 12 years, the law will encourage utility districts to convert from a relatively low cost traditional resource mix-some coal, some nuclear, natural gas and a little hydroelectric-to a future green energy that relies on low-carbon emission resources, Kolk says. "This conversion will have an impact on cost. If we do it right, we don't think it will have a significant cost impact on our ratepayers. But our costs will rise as we convert to an environmentally friendly resource mix, even as we emphasize energy efficiency. However, we must understand that the nation can't play in the fossil fuel arena anymore, and it makes sound business sense to go to sustainable resources."

Local government and special districts have a tremendous part to play in reducing greenhouse gases, Anderson says. "The state and federal agencies make the rules, set the standards and provide incentives, but when it comes to building projects, increasing efficiency, saving money and actually reducing emissions, it will be done mostly by people at the local level." The time is now, Anderson believes; the change in administrations provides an opportunity. "We encourage all our fellow agencies to talk to their legislators and get their projects lined up to be funded," Anderson says. "It looks like there may be a push to fund energy efficiency and renewable power projects as part of economic stimulus bills coming up this year. Let's make sure we're prepared for this opportunity."


For an interview with Maureen Gorsen, director of the California Air Resources Board, click here.

For a draft of the AB 32 Scoping Plan, go to www.arb.ca.gov/cc/scopingplan/scopingplan.htm

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