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CA Lawmakers Look at LNG, Energy Agency Reorganization Bills

California's lower state legislative house Assembly Utilities and Commerce Committee postponed action last week on four energy proposals, while passing out a liquefied natural gas (LNG) assessment bill and failing to approve a proposed energy agency consolidation/reorganization proposal. The LNG measure (AB 993) now moves to the Appropriations Committee.

Assemblyman Joe Canciamilla, who has been involved in several bipartisan efforts to get a post-energy crisis state energy policy in place, authored both the LNG proposal and the reorganization plan (AB 1190) that was rejected for lack of a minimum number of aye votes by committee members, including the chairman who chose not to vote on the measure.

Noting that LNG is "possibly going to become an ever-important component in the state," Canciamilla stressed that the legislation is needed to formalize and require a comprehensive assessment of LNG's potential pluses and minuses, including -- "but not limited to" -- a thorough cost-benefit analysis. Under AB 993, the assessment would be done by the California Energy Commission (CEC), which last year established an LNG tracking section on its website.

"Natural gas fuels enough power plants right now to account for 33% of the state's energy needs," the lawmaker said, emphasizing that only 15% of the state's gas supplies come from its declining in-state production. "Alternatives to increase supply include expanding the domestically produced supplies, looking at the interstate supplies and looking at LNG; so this bill would help assure a close examination was done of the potential benefits and drawbacks of LNG as we move forward trying to make decisions about how we balance the state's energy portfolio."

While the CEC has formed an LNG working group and is essentially doing what the bill calls for, the state lawmaker said the legislation is needed to formalize and mandate the process. The committee passed out the bill unanimously on a 9-0 vote.

The outcome for the proposed energy agency consolidation under one central state Secretary of Energy ran into questions and opposition, and eventually it failed to marshal enough support, although no committee member actually voted against the proposal.

"This is a bill that is very similar to one introduced in the last session (AB 808). In the latest version, AB 1190 directs the governor to submit a plan for reorganizing and consolidating the energy parts of the California Public Utilities Commission, CEC and other entities," Canciamilla said. The proposal would attempt to create a "different kind of energy decision-making process," he said, in that it abandons several five-member boards, including the energy commission and Electricity Oversight Board, and creates a cabinet-level secretary, along with a new board responsible for the siting of electric generation, transmission and natural gas pipeline infrastructure.

In short, the new agency is supposed to set and articulate energy policy in California, Canciamilla said, but in the end his legislative colleagues thought it was better to see what the governor's current overall state government reorganization process develops.

Canciamilla said the siting of adequate generation and transmission "is one of the biggest problems facing the state," and the 2000-2001 crisis showed that the state's array of agencies was ill-equipped to adequately address the problems. Nevertheless, the majority of the committee chose to allow Gov. Arnold Schwarzenegger to take the lead on this issue.

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