AEP Legislative Update September 2022

The 2022 Legislative Session came to a close at about 1:30am on September 1.  While normally the Session must end at midnight on August 31, urgency bills are legally allowed to be heard after the deadline and there was one high-profile urgency bill up for debate.  SB 846 made numerous changes to CA law in order to allow the Diablo Canyon Nuclear Facility to continue operating for grid reliability purposes past its planned end date of 2025.  Under the bill, which Newsom promptly signed after it was passed, the plant can continue operating until 2030.   The state's energy reliability situation was laid bare just days after the bill's passage, with the state declaring a Flex Alert for this entire week, calling for conservation as the state dealt with one of the worst heat waves in recorded history. 
The bill to extend the life of Diablo Canyon was just one of a package of bills that were pushed by Governor Newsom in the final weeks of the legislative session.  In perhaps his most aggressive involvement with the Legislature in his four sessions as Governor, he pushed strongly for a series of climate change measures to be passed, which he branded his 5 Pillars.  Those included (1) codifying the state's carbon neutrality goal, (2) accelerating the state's 2030 emissions target, (3) passing a carbon capture and storage framework, (4) establishing setback requirements for oil and gas wells, and (5) accelerating the state's clean energy procurement requirements. 
After several weeks of intense negotiation with the Legislature, a series of bills were passed to do the following:
  1. Declare the policy of the state both to achieve net zero GHGs and reduce anthropogenic GHGs to 85% below 1990 levels, by 2045.
  2. Set interim targets in 2035 and 2040 for the state's zero-emission electricity goal in 2045.
  3. Establish 3,200 ft setback for oil and gas wells.
  4. Require CARB to establish a Carbon Capture, Removal, Utilization, and Storage Program, to evaluate the efficacy, safety, and viability of carbon capture, utilization, or storage (CCUS) technologies.
  5. Promote nature-based climate solutions, including natural carbon capture.

One proposal failed to pass the Legislature, AB 2133, which would have increased the 2030 GHG target from 40% below 1990 levels to 55% below 1990 levels.  A similar proposal was just determined by CARB to be too aggressive to pursue because of the significant economic impact it would have on the state.
In addition to the climate package, the Governor and Legislature were also focused on further promoting housing production, specifically in urban environments.  After negotiations and intense lobbying and campaigning for months, the resulting bill package included AB 2011 (Wicks) and SB 6 (Caballero).  The bill do the following, among a few other things:
  1. AB 2011: create a ministerial, streamlined approval process for 100% affordable housing projects in commercial zones and for mixed-income housing projects along commercial corridors, with numerous criteria and labor standards.
  2. SB 6: authorizes a development project that is at least 50% residential to be allowable within an area zoned for office, retail, or parking, if it complies with a number of criteria, including labor and local government restrictions.

Finally, as is the case every year, there were numerous changes and additions to the state budget at the end of session, even though the main budget was passed in June.  As is often the case, in addition to tens of billions of dollars of funding for climate-related programs, the budget trailer bills also include a number of policy changes.  Among them are two CEQA items.  First, there is a provision that extends and expands the existing CEQA exemption related to prescribed fire, thinning, and fuel reduction projects.  The exemption will now include projects that are partly on federal land (rather than wholly) as well as some tribal projects.  Additionally, an even more narrowly focused item was included.  It says that the EIR for the Hollister Ranch Coastal Access Program, combined with several other documents, shall be presumed to satisfy CEQA for a project to create public access and associated facilities.
With the Legislature having wrapped up its 2022 session, focus now turns to Governor Newsom who has until September 30 to sign or veto all bills on his desk.  Additionally, the November election will be a significant one, with nearly 30 new legislators set to join the Assembly and Senate due to term limits and retirements.  This will be the most dramatic change of personnel in the Capitol since term limits were instituted over a decade ago.