Greenhouse gas measures advance in California Legislature

San Francisco (Platts)--27Jun2006

Two bills that would limit greenhouse gas emissions in California
advanced in the state Legislature late Monday.

One, S.B. 1368, written by Senate President pro Tem Don Perata, would
prohibit new long-term contracts for baseload generation unless those power
supplies guarantee that their GHG emissions would not exceed those of a
combined-cycle natural gas-fired power plant.

Perata's bill was amended last week to specify that it would apply to
contracts with terms of at least five years. Perata's bill cleared the Senate
Utilities and Commerce Committee on a 7-3 vote and now heads to the Natural
Resources Committee.

Southern California Edison and Sempra officials expressed opposition to
the measure, with SoCal Ed saying that by imposing the standard on contracts
of five years or longer, the bill will encourage more short-term contracts.

Sempra has argued that the standard should not be approved before the
California Public Utilities Commission has a chance to evaluate its costs.
Jan Smutny-Jones, executive director for the Independent Energy Producers said
his group supports Perata's bill. Many IEP members have expressed willingness
to modernize their facilities to comply with a GHG standard, he said.

Another bill tackling GHG emissions, A.B. 32 would implement California
Governor Arnold Schwarzenegger's GHG reduction targets. Regulations would be
put in place to reduce emissions to 1990 levels by 2020, starting in 2012.

The bill requires mandatory reporting of GHG emissions by the power, oil
and gas, cement manufacturing and other sectors.

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