Gov?s Frontier Line, Hydrogen Highway Funding Rejected

By Published On: May 23, 2005

The governor?s proposal to spend $2.5 million on studying the feasibility of a transmission project that would stretch from Wyoming to California, known as the Frontier Line, got the thumbs-down from a Senate budget subcommittee this week. The subcommittee recommended rejecting funding included in Governor Arnold Schwarzenegger?s revision of the state budget blueprint because of concerns that it would bring coal-fueled electricity into California. Also on May 17, lawmakers voted down the chief of state?s plan to spend $12.4 million to get his ?Hydrogen Highway? infrastructure off the ground. Subcommittee chair Sheila Kuehl (D-Santa Monica) acknowledged that transmission expansions are needed for reliability but opposed spending money on a high-voltage line that could bring in large quantities of coal-fired power because of global warming impacts. ?There are too many unanswered questions? about the project, she said, adding that it made little sense to draw lines between states when dealing with climate change induced by carbon dioxide emissions associated with coal-fired power. Kuehl also noted that the four-state project is not consistent with California?s Energy Action Plan and is mentioned only in the California Energy Commission?s Integrated Energy Policy Report (<i>Circuit</i>, April 8, 2005). ?It was not even a blip on the transmission radar screen? of the California Independent System Operator or the Western Electricity Reliability Council, added Lenny Goldberg, lobbyist for The Utility Reform Network. The 2005-06 budget revision, introduced last week, proposes spending $2.5 million to support the Frontier Line coordinating committee and hire consultants to bring the project ?to a point where developer(s) will take over and fund the remaining feasibility work.? Last month, Schwarzenegger asked for $12.3 million?with $5.5 million coming from a surcharge on ratepayers?to help implement his Hydrogen Highway Network Blueprint Plan. Kuehl said that there are more viable alternative fuels available. ?There are a great many variables related to the creation of hydrogen,? she noted, adding that she has concerns about the environmental impacts of the source of the hydrogen?natural gas or water?and methods used to separate out hydrogen from the source. The committee voted 3-0 to cut the proposed funding to $1.5 million, with half coming from the ratepayer-funded Energy Resources Programs Account. The Senate subcommittee also agreed on a 2-1 vote to require that $7.5 million of the CEC?s Public Interest Energy Research (PIER) program natural gas funds be allocated to research focused on reducing air pollution caused by energy production pursuant to a plan developed jointly by the CEC and the California Air Resources Board (ARB). Also approved was a trailer bill that would require half of all future gas funds to be spent in a similar fashion. Earlier, the subcommittee proposed transferring $31 million to the ARB until it learned that would harm multiyear PIER-funded projects. Scott Matthews, CEC acting executive director, warned that the allocation proposal would be ?disruptive? and that the commission?s environmental mandates are ?stronger and broader? than the air board?s. About $90 million has been spent on air-quality programs, $41 million on climate change, and several millions of dollars on the aquatic impacts of using seawater to cool power plants, he said. He noted that next year the CEC will submit a report to the Legislature that lays out how funding is allocated. Kuehl and Senator Alan Lowenthal (D-Long Beach) pointed to the soaring health-care costs related to air pollution. ?We are trying to wrestle a piece of this budget more toward air quality,? Kuehl said. California Public Utilities Commission executive director Steve Larson said the trailer bill was not the appropriate vehicle for a ?change in policy.? His suggestion that the proposal be introduced in formal legislation fell flat. The subcommittee recommended transferring $1 million of PIER money from the CEC to the California Environmental Protection Agency. The EPA is charged with implementing the state?s climate change activities and is the Climate Action Registry lead agency. The registry, which has received $200,000 in the last two years, aims to increase energy efficiency, reduce greenhouse gas emissions from businesses, and create a greenhouse gas emissions baseline in the event of future CO2 trading. Funding for staffing to address the impacts of liquefied natural gas development was given minimal attention because LNG developers will pick up the tab. However, Kuehl and Lowenthal insisted that the environmental and safety impacts of LNG development be addressed during a workshop to held jointly by the CEC, the California Public Utilities Commission, and the Air Resources Board next month.

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