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Strickland unveils 2009 energy bill package

Legislation will help California move to a more energy-efficient economy

Posted: April 8, 2009 6:59 p.m.
Updated: April 8, 2009 4:00 p.m.

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CARPINTERIA -- California State Senator Tony Strickland (R-Thousand Oaks) unveiled his 2009 energy bill package at a press conference in front of Clipper Windpower in Carpinteria today.

With a model wind turbine as his backdrop and flanked by renewable energy business leaders Doug Pertz, CEO of Clipper Windpower, and Jim Trotter, former president of Solar Energy Industries Association, Senator Strickland spoke about his legislation and transitioning California to a renewable, more energy efficient economy.

"Today, California is squeezed between an economic crisis and an energy crisis that requires us to fundamentally rethink how we do business," Senator Strickland said.

Senator Strickland's bill package focuses on expanding renewable, clean energy. His legislation would move California away from dirty fossil fuels that are not just bad for the environment, but are a threat to energy security. And for those fossil fuels like diesel that we can't rid the earth of, Strickland's bill package encourages people to make those emissions cleaner.

"I'm working with Democrats and Republicans to change California to a renewable energy economy to create jobs, reduce our dependence on foreign oil, improve the environment, and lower energy price," Strickland continued. "By focusing on legislation that promotes renewable, clean energy, we promote local businesses. When businesses grow, jobs multiply."

Once Senator Strickland had concluded, Pertz commented on the benefits of wind energy and how his company is making strides to promote renewable energy use in Santa Barbara County. Trotter made reference that Senator Strickland's renewable energy legislation will grow the economy and create jobs in California.

In addition, Seth Hammond, president of Specialty Crane and Rigging, commented on how SB 464: Diesel Particulate Matter Reduction would help local businesses like his as they transition machinery to cleaner energy use.

Key elements of Senator Strickland's energy legislation include:

* SB 463: Renewable Energy Projects: This bill would entitle a person to a one-time tax credit not to exceed $3,000, or equal to 30 percent of all costs for the purchase and installation of a renewable energy resource project.

* SB 534/SCA 13: Small Wind Turbines & Geothermal Heat Pump Systems: This bill would promote the use of renewable energy by allowing for the construction of a small wind turbine or geothermal heat pump system on private property without costing the property owner additional property taxes for the improvement to the property.

* SB 551: Transmission Lines: This bill provides the Energy Commission with the exclusive authority to certify electric transmission lines with the goal of reducing the application time for specific projects.

* SB 462: Manufacturers of Diesel Exhaust Filters: This bill would entitle a person to a $10,000 tax-credit per year for manufacturing technology that is designed and verified by the Air Resource Board to reduce diesel emissions.

* SB 464: Diesel Particulate Matter Reduction: This bill would entitle a person to a tax credit equal to 5 percent, not exceeding $10,000 of the cost for the purchase of equipment verified in the reduction of particulate emissions from diesel-fueled engines.

* SB 542: Solar Energy & Energy Efficiency Programs: Senator Strickland has joint-authored SB 542 with Democratic Senator Pat Wiggins. This bill would add apartments, duplexes, and commercial rental properties into the California Solar Initiative and other energy efficiency programs to encourage the use of renewable energy.


Here are further details on the proposed bills:

SB 463
Tax Credit: Renewable Energy Projects

Background:
The State has placed a greater emphasis on the use of renewable energy in order to reduce our reliance on fossil fuels and their harmful impact to the environment and the public's health. Federal tax credits have been implemented for renewable energy projects and state rebates are offered through the California Solar Initiative.

This bill would create a California tax credit to encourage individuals and businesses to install renewable energy projects. By increasing the installation of these projects we can help California meet its goals in reducing greenhouse gas emissions and its overall mission to increase the use of renewable energy resources.

These tax credits are especially important to encourage small businesses to invest in renewable technology during these difficult economic times. This will help promote business growth and cleaner energy.

Intent:
Authorizes a tax credit of 30% of the costs paid or incurred by the taxpayer for the purchase and installation of a renewable energy resource project or a renewable energy resource conversion technology project. The project must be installed on property owned or leased by the taxpayer and reduces the taxpayers energy usage from the energy grid. The tax credit may not be more than $3,000 and the tax credit is repealed on December 1, 2017.

SCA 13 & SB 534
Property Tax Exemptions:
Small Wind Turbines and Geothermal Heat Pump Systems

In Brief:
SCA 13 amends the California Constitution to include as a property tax exemption the new construction of a small wind turbine or geothermal heat pump system on or after January 1, 2010. SB 534 will exempt the small wind turbines and the geothermal heat pump systems under the classification of "newly constructed" to the assessor's added tax valuation on real property

Background:
SCA 13 and SB 534 seeks to amend the California Constitution, and the Revenue and Taxation Code in order to seek similar property tax exclusions as currently offered for the new construction of an active solar energy system (CA Rev and Tax Code § 73).

According to the U.S. Department of Energy, geothermal heat pumps (GHPs) use the constant temperature of the earth as the exchange medium instead of the outside air temperature. This allows the system to reach fairly high efficiencies (300% - 600%) on the coldest of winter nights, compared to 175% - 250% for airsource heat pumps on cool days.

SCA 13 and SB 534 seeks to maximize California's potential in using geothermal energy to meet the state's renewable energy goals. The California Energy Commission stated that geothermal energy currently accounts for nearly 40% of California's renewable energy with a total of 1,800 megawatts (MW) installed in California. It is estimated by the commission that the state has a potential for at least another 4,000 MW of added power from geothermal energy.

Small wind turbines are as defined by the Energy Commission to be the following: a small wind electric system is 50 kilowatts (kW) or less in size and uses the wind's energy to produce electricity. A turbine spins on top of a tower to turn the wind into usable electricity for a home or business. Currently, the commission is offering a rebate for anyone installing a wind turbine system of less than 30 kW and lives in the electric service territory of Pacific Gas and Electric Company, Southern California Edison Company, San Diego Gas and Electric Company, or Bear Valley Electric. California tax credits for wind energy were available after Janaury 1, 2001, but expired on December 31, 2005.

SCA 13 and SB 534 will help Californians contribute to meeting the state's 33% renewable energy goal by 2020. The property tax exemptions will expand the renewable energy options for tax payers with the addition of small wind turbines and geothermal heat pump systems.

SB 551
Transmission Line Certification Consolidation

In Brief:
SB 551 shall consolidate all authority of licensing for bulk transmission certification by the Public Utilities Commission (PUC) to the State Energy Resources Conservation and Development Commission (Energy Commission). This bill will also allow the Energy Commission to help facilitate transmission corridor designation, and transmission and generation siting and permitting. Consolidating the application process through the Energy Commission will streamline the siting certification to a "one-stop" permitting process with the goal of reducing the application time for specific projects in half.

Background:
The current process for certification of transmission sites is extraordinarily time-consuming, inefficient, and costly for both the applicant and the State. Due to the jurisdictional overlap in the siting process with the PUC and the Energy Commission, there is a lack of consistency and clarity in both agencies' attempts to facilitate California meeting the 33% renewable energy goal by 2020. Examples where the inefficiency has prolonged the progress in certifying transmission sites include the Sunrise and Tehachapi Renewable Transmission Projects. Upon the initial filing for both projects, it has taken several years for approval of certification. This bill attempts to resolve the delays related to multiple-agency involvement in the transmission certification.

What SB 551 Does: Provides the Energy Commission with the exclusive authority to certify electric transmission line. The definition of "electric transmission line" is expanded to include:

1.) An electric power-line that transports electricity from any power plant in California to a location with an interconnected transmission system

2.) An electric power-line that is rated at 200 kilovolts or above

3.) An electric power-line that is rated between 50 kilovolts - 200 kilovolts, which is used to support the stability and reliability of the interconnected transmission line, and 4.) The Energy Commission shall serve as California's representative in all federal proceedings regarding the state's energy policy, and work in consultation with the PUC and other relevant state agencies.

SB 462
Tax Credit: Manufacturers of Diesel Exhaust Filters

Background:
In 2000, the California Air Resources Board (CARB) adopted a comprehensive Diesel Risk Reduction Plan to reduce diesel emissions from new and existing diesel-fueled engines and vehicles. Regulations were adopted by the CARB on July 26, 2007 to reduce diesel particulate matter (PM) and nitrogen oxide (NOx) emissions from engines used in off-road equipment. These regulations became effective on June 15, 2008.

The CARB plan seeks to reduce PM emissions by approximately 90 percent for new vehicles. Existing diesel engines and vehicles would be required to implement retrofit technology and there would be accelerated turnover of fleets to newer, cleaner engines.

Compliance dates for the fleets range from 2010 to 2015 depending on the size of the fleet. The largest fleets (over 5,000 horsepower of affected vehicles) must comply first.

Compliance will be extremely difficult for the fleet owners because there are only a few manufacturers currently making equipment certified by the CARB. The equipment is extremely limited and does not address the various makes and models that require the retrofit. If the fleet owners are not able to make the necessary changes to the engines, then the equipment will have to be retired. This means, equipment purchased at tens of thousands of dollars is sold at a loss to out of state buyers or the equipment is scrapped.

Achieving cleaner engines is a laudable goal, but we must give the operators the resources to meet the goal. The state cannot expect compliance nor punish noncompliance when the technology to meet the goals is not yet available.

Intent:
Authorizes a tax credit of $10,000 against the "net taxes" for taxable years beginning on January 1, 2009 and before December 1, 2019 for manufacturers of verified diesel emission control strategies.

SB 464
Tax Credit: Diesel Particulate Matter Reduction

Background:
In 2000, the California Air Resources Board (CARB) adopted a comprehensive Diesel Risk Reduction Plan to reduce diesel emissions from new and existing diesel-fueled engines and vehicles. Regulations were adopted by the CARB on July 26, 2007 to reduce diesel particulate matter (PM) and nitrogen oxide (NOx) emissions from engines used in off-road equipment. These regulations became effective on June 15, 2008.

The CARB plan seeks to reduce PM emissions by approximately 90 percent for new vehicles. Existing diesel engines and vehicles would be required to implement retrofit technology and there would be accelerated turnover of fleets to newer, cleaner engines.

Compliance dates for the fleets range from 2010 to 2015 depending on the size of the fleet. The largest fleets (over 5,000 horsepower of affected vehicles) must comply first.

Compliance will be extremely difficult for the fleet owners because there are only a few manufacturers currently making equipment certified by the CARB. The equipment is extremely limited and does not address the various makes and models that require the retrofit. If the fleet owners are not able to make the necessary changes to the engines, then the equipment will have to be retired. This means, equipment purchased at tens of thousands of dollars is sold at a loss to out of state buyers or equipment is scrapped.

Achieving cleaner engines is a laudable goal, but we must give the operators the resources to meet the goal. The state cannot expect compliance nor punish noncompliance when the technology to meet the goals is not yet available.

Intent:
Authorizes a tax credit, for qualified taxpayers, in an amount equal to 5% of the amount paid or incurred in connection with the purchase of qualified property to meet diesel particulate matter reduction requirements. The tax credit may not exceed $10,000.



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