3.12 Greenhouse Gas Emissions

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1 3.12 Greenhouse Gas Emissions Overview of Impacts The analytical approach taken by this Subsequent EIR is described in Section 3.0 (Introduction to Environmental Analysis). The following section provides a description of climate change and greenhouse gas (GHG) emissions as they pertain to the SSJID area and services. An analysis of cumulative impacts from other past, present and reasonably foreseeable projects is included in Section 5 (Cumulative Impacts) of this Subsequent EIR. The 2006 Final EIR for the plan to provide retail electric service did not include analysis of GHG emissions. In late December 2009, the California Natural Resources Agency adopted certain amendments to the State CEQA Guidelines for reviewing the environmental impacts of greenhouse gas emissions. These amendments became effective in mid March 2010, and became requirements for most agencies to follow roughly 120 days later. (See CEQA Guidelines, 15007, subd. (d).) This section analyzes the impacts of the proposed project in light of those changed guidelines, including the potential of the proposed project to lead to increased GHG emissions. This section finds that a less than significant impact would occur as a result of GHG emissions from the project and SSJID assuming the responsibility of making power purchases for retail electric customers. This table summarizes the GHG impacts for each of the four actions evaluated in this EIR. Greenhouse Gas Emissions Impact : Generate greenhouse gas emissions, either directly or indirectly, that may have a significant impact on the environment Impact : Conflict with applicable plans, policies, or regulations adopted for the purpose of reducing the emissions of greenhouse gases Municipal Services Review Expanded Sphere of Influence Proposed 80-acre Annexation Updated Plan to Provide Retail Electric Service No Impact No Impact No Impact Less than Significant No Impact No Impact No Impact Less than Significant Existing Setting Section 2 (Project Description) describes the activities outlined in the Sphere Plan and MSR that are considered preexisting or previously approved activities rather than part of the proposed project. These activities are either considered part of the baseline, to the extent that they have already been undertaken, or included in the cumulative impacts analysis as reasonably foreseeable projects, to the extent that they have yet to be implemented. Greenhouse gas emissions occur as a result of SSJID providing its existing services as described in the Sphere Plan and MSR, and these are baseline activities Scope of Analysis for Climate Change The study area for climate change and the analysis of greenhouse gas emissions is potentially broad because climate change is influenced by world wide emissions and their global effects. However, the study area is also limited by the CEQA Guidelines [Section 15064(d)], which directs lead agencies to consider an indirect physical change only if that change is a reasonably foreseeable impact which may be caused by the project. November Draft Subsequent EIR

2 In a larger sense, the baseline against which to compare potential impacts of the project includes the natural and anthropogenic drivers of global climate change, including world wide GHG emissions from human activities that have grown more than 70 percent between 1970 and 2004 (IPCC, 2007). The State of California is leading the nation in managing GHG emissions. Accordingly, the impact analysis for this project relies on guidelines, analyses, policy, and plans for reducing GHG emissions established by the California Air Resources Board (CARB), California Energy Commission (CEC), and California Public Utilities Commission (CPUC). This analysis also cites and relies on local air quality management district recommendations from the San Joaquin Valley Air Pollution Control District (SJVAPCD) for CEQA assessment of GHG emissions. The analysis is a cumulative impact assessment because GHG emissions contribute, by their nature on a cumulative basis, to the adverse environmental impacts of global climate change. Overall cumulative impacts are summarized in Section 4 of this EIR Types of GHG Emissions This section presents background information on global climate change and greenhouse gas emissions. Globally, temperatures, precipitation, sea levels, ocean currents, wind patterns, and storm activity are all affected by the presence of GHGs. The global climate depends on the presence of GHGs to naturally provide the greenhouse effect. The greenhouse effect is driven mainly by water vapor, aerosols, carbon dioxide (CO 2 ), methane (CH 4 ), nitrous oxide (N 2 O), and other GHGs that trap heat radiated from the Earth's surface. The global surface temperature would be about 34 C (61 F) colder than it is now if it were not for the natural heat trapping effect of natural climate change pollutants (CAT, 2006) Effects of GHG Emissions Human activity contributes to emissions of six primary GHGs: CO 2, CH 4, N 2 O, hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF 6 ). In response to Executive Order S 3 05 (June 2005), which declared California s particular vulnerability to climate change, the California Global Warming Solutions Act of 2006, Assembly Bill 32 (AB 32), was signed into effect on September 27, In passing the bill, the California Legislature found that: Global warming poses a serious threat to the economic well being, public health, natural resources, and the environment of California. The potential adverse impacts of global warming include the exacerbation of air quality problems, a reduction in the quality and supply of water to the state from the Sierra snowpack, a rise in sea levels resulting in the displacement of thousands of coastal businesses and residences, damage to marine ecosystems and the natural environment, and an increase in the incidences of infectious diseases, asthma, and other human health related problems [California Health & Safety Code, Sec , Division 25.5, Part 1]. How global climate change may impact California s public health, infrastructure and natural resources is described in the 2009 Biennial Report of the California Climate Action Team (CAT, 2009). The Climate Action Team findings include: extreme events from heat waves, floods, droughts, wildfires and bad air quality are likely to become more frequent in the future and pose serious challenges to Californians. These impacts pose growing demands on individuals, businesses and governments at the local, State, and federal levels to minimize vulnerabilities, prepare ahead of time, respond effectively, and recover and rebuild with a changing climate and environment in mind (CAT, 2009). Draft Subsequent EIR November 2011

3 The effects anticipated in the Central Valley provide an illustration of the potential changes: the number of days conducive to ozone formation in the San Joaquin Valley may rise by 75 to 85 percent by the end of the century; and sea level rise may place additional pressure on the levee systems and increase the intensity of saltwater intrusion into coastal groundwater resources, leading to increased flooding and decreased freshwater availability (CAT, 2006; CAT, 2009) Baseline GHG Emissions Emissions of the primary GHG, carbon dioxide, occur largely from combustion of fossil fuels. The major categories of fossil fuel combustion CO 2 sources can be broken into sectors for residential, commercial, industrial, agricultural, transportation, and electricity generation. GHG emissions not tied to fossil fuel use occur in much smaller quantities. However, the global warming potential of CH 4 is about 21 times that of CO 2. The use of sulfur hexafluoride or SF 6 in electric utility system transformers and circuit breakers and along transmission and distribution lines also poses a concern, because this pollutant can slowly escape from the equipment, and it has an extremely high global warming potential (one pound of SF 6 is the equivalent warming potential of approximately 23,900 pounds of CO 2 ). When quantifying GHG emissions, the different global warming potentials of GHG pollutants are usually taken into account by normalizing their rates to an equivalent CO 2 emission rate (CO2e). California emitted 475 million metric tonnes of CO 2 equivalent (475 MMTCO2e) in 2008, (CARB, 2010c) or between one and two percent of about 49,000 MMTCO2e emitted globally (IPCC, 2007). Statewide GHG emissions in 1990 were 427 MMTCO2e (CARB, 2007), as shown in Table Table Statewide GHG Emissions Levels, Established by CARB (MMTCO2e) Sector Statewide 1990 Emissions Level Average Emissions 2020 Emissions Forecast, AB 32 Baseline Transportation Electricity Commercial and Residential Industry Recycling and Waste not estimated High global warming potential gases not estimated Agriculture Forest Net Emissions Statewide Emissions Total Source: CARB 2007, CARB 2008, CARB 2010c. Table shows the 1990 GHG emissions level established by CARB (CARB, 2007) and the forecast of 2020 emissions if none of the foreseeable measures in the 2008 AB 32 Climate Change Scoping Plan were implemented (CARB, 2010c), see Section Electricity generation for use in California is responsible for 20 to 25 percent of the total statewide GHG emissions (depending on yearly variations). The data reveals the importance of addressing on road transportation sources, as well as the significant contribution from the heating, cooling, and lighting of buildings (CARB, 2008). November Draft Subsequent EIR

4 Transportation Sector The transportation sector includes all motor gasoline and diesel fuel combustion, and the GHG emissions of this sector are not split into activities or uses (i.e., there is no separate estimate for the level of GHG emissions caused by gasoline or diesel fuel combustion related to statewide construction activities). On road vehicles (transportation sector) and extraction/refining of oil and gas (industry sector) account for about 36 percent and 14 percent of California GHG emissions, respectively, or approximately half the statewide total. For the unincorporated portion of San Joaquin County, the transportation sector caused emissions of 2.0 MMTCO2e/yr in 1990, and emissions of 3.0 MMTCO2e/yr in 2007 (San Joaquin County, 2009). Agriculture Sector The agriculture sector includes GHG emissions from farming equipment exhaust, agricultural irrigation pumps exhaust, fertilizer application, rice cultivation, residue burning, and livestock. Agricultural GHG emissions compose a significant part (about 20 percent) of San Joaquin County s total 2007 GHG emissions (San Joaquin County, 2009). Agriculture related GHG emissions increased approximately 43 percent from 1990 to 2007 contributing to the faster increase in GHG emissions relative to population growth, but consistent with Statewide GHG trends (CARB, 2010c). In San Joaquin County, the agriculture sector remained approximately 20 percent of the County s total GHG emissions in both 1990 and Fertilizer application involves the addition of nitrogen to the soil, which can volatize as N 2 O. In San Joaquin County, this trend has been marked by a relative increase in livestock GHG emissions and fertilizer application, with a decrease in emissions from farming equipment. For the unincorporated parts of San Joaquin County, around 413 agricultural irrigation pump engines (2007) contribute 0.03 MMTCO2e/yr (San Joaquin County, 2009), and this inventory has probably declined with programs for irrigation pump electrification. Electric Power Generation, Transmission, and Distribution The baseline electricity demand (2011) in the SSJID territory is approximately 571,900 MWh (MSR Table 4 5, 2011). 1 Generating electricity from fossil fuel use is a primary source of greenhouse gases, primarily CO 2, with much smaller amounts of N 2 O and CH 4 (often from unburned natural gas). Power plants in California and the western U.S. serving electricity to California through the interconnected transmission system delivered about 288,000,000 megawatt hours (MWh) in 2008 (CEC, 2010a), of which about 0.2% was delivered to end users in the SSJID territory. The average GHG emissions attributable to the electricity delivered to end use customers in California vary depending on annually variable conditions, including peak demands, the availability of hydroelectric and nuclear resources, and power market conditions. From 2006 to 2008, average statewide emissions ranged from 0.39 to 0.41 metric tonnes CO2e for each MWh used in California (MTCO2e/MWh) (CARB, 2010c; CEC, 2010a). The transmission system physically integrates the power output from thousands of generating units. In California, the California Independent System Operator (CAISO) controls how power plants are dispatched for PG&E and other entities in an integrated manner, using economic dispatch. This ensures that the CAISO dispatches units in a least cost manner until system demand is met. Power plants with zero or low fuel and operational costs, including nuclear, hydroelectric, and renewable power plants, are dis 1 The baseline electricity demand in the SSJID territory cannot be determined with certainty because the data is maintained by PG&E. Draft Subsequent EIR November 2011

5 patched first. Gas fired plants and other fossil fuel fired plants, which have higher fuel and operational costs, are then dispatched in order of their marginal costs. Power plants with the highest marginal costs are dispatched last and used only in times of very high demand. The cost of power from thermal power plants is largely determined by the thermal efficiency, which also determines the GHG emission rate of the units. This means that following a least cost dispatch process results in a dispatch order from (roughly) lowest to highest GHG emissions intensity. Additional details on transmission system operation and the dispatch order are in Appendix C of this EIR (Greenhouse Gas Assessment Technical Report) and in Appendix B: Fundamental Market Assumptions of the Market Expert Report (PA, 2011). Electrical Equipment Electric power system operators use SF 6, which is a high global warming potential gas, as an insulating gas in high voltage electrical switchgear. Gas insulated switchgear includes switches, stand alone gasinsulated equipment, and any combination of electrical disconnects, fuses, electrical transmission lines, transformers and/or circuit breakers used to isolate gas insulated electrical equipment. Switchgear is used both to de energize equipment to allow work to be done safety and to clear electrical faults. Nearly 80 percent of California s SF 6 emissions result from leakage and handling losses from gasinsulated switchgear (CARB, 2010a). Baseline GHG emissions include SF 6 leaking from equipment currently operated by PG&E and MID in the SSJID territory. PG&E follows a system wide SF 6 emission reduction program to minimize leaking SF 6 over the operational life of its electrical equipment. PG&E claims that it has reduced its SF 6 leak rate by 86 percent since 1998 through its participation in the U.S. EPA s SF 6 Emission Reduction Partnership (PG&E, 2010). The routine measures that PG&E takes to avoid potential SF 6 emissions include: safe SF 6 handling procedures; using a single, full service SF 6 vendor to track SF 6 usage and recycling and to coordinate leak detection procedures; keeping logs and inventories of SF 6 use. PG&E maintained an SF 6 emission rate of between 1.3% to 1.9% of PG&E s entire SF 6 inventory from 2007 to 2009 (PG&E, 2010). PG&E Emissions as a Corporate Entity The California Climate Action Registry (CCAR) offers protocols to facilitate preparing inventories of GHG emissions. The registry is a non profit public corporation that records greenhouse gas emissions inventories that California entities voluntarily report. PG&E is a member in the CCAR, and provides voluntary reports of entity wide GHG emissions. For 2008, PG&E reported the following levels of GHG emissions from all of its corporate activities, which exclude direct energy consumption by its customers (CCAR, 2010): Mobile sources (transportation) fuel combustion: MMTCO2e; Stationary sources of PG&E owned electric power generation: MMTCO2e; Stationary sources of natural gas use and for natural gas system operations: MMTCO2e; Process and fugitive emissions (estimates include entire natural gas system): MMTCO2e; and Indirect emissions due to electricity used by PG&E and from transmission and distribution losses for electricity delivered over PG&E s system: MMTCO2e. November Draft Subsequent EIR

6 PG&E Delivery of Electricity Electricity is delivered by PG&E to its end use customers from many different generating resources with GHG emission rates that vary widely. PG&E s average GHG intensity is much lower than statewide average GHG emission rates because PG&E owns substantial zero emission generation resources in the form of large hydroelectric and nuclear power plants. System average GHG emissions rates associated with generating the electricity delivered by PG&E to its customers ranged from 0.26 to 0.29 MTCO 2 /MWh in 2007 through Public reports of the GHG inventory show this in terms of CO 2 rather than CO2e as 575 to 641 lb CO 2 /MWh (CCAR, 2010; CRIS, 2011). 2 Variability is somewhat driven by changing availability of hydropower, which has zero GHG emissions. The demand for electricity in the PG&E territory substantially exceeds the capacity of PG&E s owned generation. To make up the shortfall, PG&E purchases additional generation from fossil fueled and renewable resources plus wholesale power. The renewable generation serves the dual purpose of providing power for PG&E s customers and satisfying mandatory renewable energy targets. Table summarizes the average GHG intensity of electricity delivered in northern California by PG&E and, for comparison, two nearby publicly owned utilities and the California statewide average. Table Average GHG Intensity of Electricity Delivered in California (MTCO 2 /MWh) Territory PG&E MID SMUD Statewide Average (CARB/CEC) PG&E Average 2007, 2008, and 2009 Average GHG Intensity Delivered by PG&E (MTCO2 per MWh) Average GHG Intensity Delivered by PG&E (lb CO2 per MWh) MTCO2/MWh 617 lb CO2/MWh Notes: = no data. One metric tonne (MT) equals 2,204.6 pounds or 1,000 kilograms. GHG intensity is shown in terms of CO2, but emission rates are usually reported in CO2-equivalent (CCAR General Reporting Protocol v.3.1). MID: Modesto Irrigation District; SMUD: Sacramento Municipal Utility District Sources: Entity public reports of CO2 from Owned and Purchased Power, from California Climate Action Registry (CCAR) and Climate Registry Information System (CRIS) excluding biogenic and geothermal resources. CARB/CEC refers to the CARB GHG Inventory at and the CEC historic electricity consumption at elecbyplan.aspx. The average GHG intensity of electricity depends on the full mix of generating resources available to the utility. Table details the different types of generating resources in PG&E s ownership and the resources purchased by PG&E for meeting the customer demand that exceeds PG&E s own resources. Emissions from generating resources relied upon by PG&E for meeting its customer demand range from MTCO 2 /MWh for PG&E owned fossil generation to zero for PG&E owned hydroelectric and nuclear generation or PG&E owned and purchased renewable generation. Table shows that most GHG emissions occur from PG&E s purchases of non renewable resources, which are mostly fossil fueled. 2 This is shown by PG&E Corporation in Public Reports for 2007, 2008, and 2009 filed to the California Climate Action Registry accessible at: Draft Subsequent EIR November 2011

7 Table Average GHG Intensity of PG&E Owned and Purchased Resources Resource PG&E Owned Generation Total 2007 Electricity (MWh) 2008 Electricity (MWh) 2009 Electricity (MWh) 2007 GHG Intensity (MTCO2/MWh) 2008 GHG Intensity (MTCO2/MWh) 2009 GHG Intensity (MTCO2/MWh) Average (3-year) GHG Intensity (MTCO2/MWh) Fossil Generation 482, ,002 2,990, Biogenic Generation ,227 Geothermal Generation Other Renewable Generation 436, ,380 1,102, Zero Emission Generation 25,255,905 23,970,907 24,092, Cogeneration PG&E Purchased Generation Total Purchased Fossil Generation 32,348,353 24,016,912 26,576, Purchased Biogenic Generation 3,044,589 3,099,804 3,405,817 Purchased Geothermal Generation 2,702,442 3,341,301 3,410,898 Purchased Other Renewable 2,863,280 2,365,898 3,523, Purchased Zero Emission 2,199,457 1,986,502 2,560, Purchased Cogeneration 5,105,455 4,606, Purchased Wholesale Power 5,011,784 17,037,526 11,905, TOTAL FROM 79,450,904 81,935,164 79,620, ALL GENERATION SOURCES Total from 26,175,545 25,481,043 28,237, PG&E Owned Generation Total from 53,275,359 56,454,121 51,382, PG&E Purchased Generation Source: CCAR and CRIS entity (PG&E) public report of CO2 from Owned and Purchased Power for bundled customers. Notes: CO2 from biogenic sources and geothermal activities are not included in entity's total CO2, nor used to calculate efficiency metrics. Biogenic Generation consists of biomass, landfill gas, and waste-to-energy. Renewable Generation consists of small hydro, solar, and wind. Zero Emission Generation consists of large hydro and nuclear. Co-generation in the 2007 and 2008 reports consists of the electricity component only. Purchased Wholesale Power consists of Spot Market purchases. November Draft Subsequent EIR

8 Applicable Regulations and Policies State CEQA Guidelines. On December 31, 2009, the California Natural Resources Agency adopted certain amendments to the State CEQA Guidelines to change how public agencies review the environmental impacts of greenhouse gas emissions and energy use. These amendments, which were approved by the Office of Administrative Law on February 16, 2010, became effective on March 18, 2010, and became mandatory for most public agencies approximately 120 days later (see CEQA Guidelines, 15007, subd. (d)(2)). The topic of energy conservation is addressed in Section 3.13 of this EIR. California Global Warming Solutions Act of 2006 (AB 32). This law requires CARB to adopt a statewide greenhouse gas emissions limit equivalent to the statewide GHG emissions levels in 1990 (427 MMTCO2e) to be achieved by A longer range goal is also reflected in California Executive Order S 3 05 that requires an 80 percent reduction of greenhouse gases from 1990 levels by CARB adopted the 2020 statewide target and mandatory reporting requirements in December 2007, and a statewide scoping plan in December 2008 (the AB 32 Scoping Plan; CARB, 2008). CARB AB 32 Climate Change Scoping Plan. The AB 32 Scoping Plan (CARB, 2008) 3 identifies how emission reductions will be achieved from significant sources of GHG via regulations, market mechanisms, and other actions. Many sectors of the California economy may need to make wholesale changes in how services or goods are provided. Key elements of the Scoping Plan are a 33 percent Renewable Portfolio Standard (RPS), aggressive energy efficiency targets, and a cap and trade system that includes the electricity sector. Statewide plans and programs for GHG management that stem from AB 32 are within the sole jurisdiction of the CARB. Since CARB must fulfill its mandate to achieve the maximum technologically feasible and cost effective GHG emission reductions, SSJID would be subject to requirements for GHG control as they become effective. CARB SF 6 Regulations (17 CCR 95350). In early 2010, CARB adopted a regulation for reducing SF 6 emissions from electric power system gas insulated switchgear (CARB, 2010a). The regulation requires owners of such switchgear to: (1) annually report their SF 6 emissions; (2) determine the emission rate relative to the SF 6 capacity of the switchgear; (3) provide a complete inventory of all gas insulated switchgear and their SF 6 capacities; (4) produce a SF 6 gas container inventory; and (5) keep all information current for CARB enforcement staff inspection and verification. By acquiring the electric distribution system from PG&E, SSJID would become subject to this regulation if the proposed electric service plan is implemented. Mandatory Reporting of Greenhouse Gas Emissions (17 CCR 95100). Mandatory reporting of GHG emissions applies to electricity generating facilities with a nameplate capacity equal or greater than 1 MW capacity and GHG emissions exceeding 2,500 metric tonnes per year. This regulation is not applicable to the electricity generation facilities currently owned by SSJID because SSJID s ownership interests are only in generating facilities solely powered by hydroelectric and solar energy [17 CCR 95101(c)]. SSJID would become subject to mandatory GHG reporting as a retail provider of electricity as a result of the proposed project [17 CCR Section 95102(a)]. California Renewable Portfolio Standard (RPS). In 2002, the California Legislature enacted a statute establishing its RPS, with the goal of increasing the percentage of renewable energy in the State's electricity mix 3 A March 2011 ruling of the San Francisco Superior Court enjoined some aspects of the scoping plan because of what the court considered to be defects in the environmental document prepared to review the plan s significant impacts, particularly impacts with regard to the cap and trade program. This ruling and subsequent action by appellate court and the California Supreme Court is not expected to affect RPS requirements. Draft Subsequent EIR November 2011

9 to 20% by Although the state law encouraged publicly owned electric utilities to enforce renewable portfolio standards that meet the intent of this requirement, such public utilities were not originally bound by it. State energy agencies recommended accelerating that goal in their 2003 Energy Action Plan. Those recommendations resulted in changes in the law. In 2006, Senate Bill 107 (Simitian and Perata, 2006) modified the RPS to require the investor owned utilities like PG&E to procure 20% of retail sales from renewable energy by In November 2008, the Governor signed Executive Order S to require all retail sellers of electricity in California serve 33% of their load with renewable energy by Regulations to implement the 33% RPS requirement statewide were adopted by CARB in September 2010, Table Renewable Portfolio Standard (RPS) under SB X1 2 Compliance Periods January 1, 2011 to December 31, 2013 (average over period) After December 31, 2013 to 2016 (minimum required annually) By December 31, 2016 and annually thereafter (minimum required) By December 31, 2020 and annually thereafter (minimum required) Source: Pub. Util. Code, Eligible Renewable Resources (% of Retail Sales) the Renewable Electricity Standard (RES), as required by Executive Order S (17 CCR Sections to 97012). Those regulations were to apply to publicly owned utilities with annual sales of electricity to retail end use customers of more than 200,000 MWh. 5 However, the RES regulations were preempted by legislative action in April California Renewable Energy Resources Act of 2011 (SB X1 2). In April 2011, Senate Bill 2 of the 1st Extraordinary Session (SB X1 2) was signed into law. SB X1 2 expressly applies the new 33% RPS by December 31, 2020 to all retail sellers, including publicly owned utilities, such as SSJID intends to become. It also established standards for interim years of: an average of 20% from 2011 through 2013, a minimum of 20% thereafter through 2016, and a minimum of 25% by December 31, This codified the requirement to achieve 33% RPS statewide by the end of 2020, a key element of the 2008 AB 32 Scoping Plan (CARB, 2008). If the SSJID project is approved and implemented, SSJID would become subject to the new RPS and the interim year standards and reporting requirements enacted in 2011 by SB X1 2. (Pub. Util. Code, , ) Table shows the interim year requirements of SB X1 2 based on multiple year compliance intervals. (Pub. Util. Code, ) Progress Implementing the RPS. PG&E did not achieve the 20% RPS goal by The official reports filed to CPUC show PG&E s procurement of renewable power growing from below 12% in 2003 to about 14% in 2009 (CPUC, 2010) to nearly 18% in 2010 (PG&E, 2011b). CPUC GHG Emissions Performance Standard. The Electricity GHG Emission Standards Act (SB 1368) was enacted in Regulations adopted by the CEC and CPUC pursuant to the bill prohibit California utilities from entering into long term commitments with any base load power plant facilities that exceed the Greenhouse Gas Emission Performance Standard of metric tonnes CO 2 per megawatt hour (1,100 pounds CO 2 /MWh). Specifically, the SB 1368 GHG Emission Performance Standard (EPS) applies to baseload power from new power plants, new investments in existing power plants, and new or renewed con To qualify as eligible for California s RPS, a generation facility must use a designated renewable resource or fuel, as in the Overall Renewable Energy Program Guidebook (CEC Publication # CEC ED2 CMF, adopted December 19, 2007). CARB, Resolution 10 23, agenda item , September 23, November Draft Subsequent EIR

10 tracts with terms of five years or more, including contracts with power plants located outside of California. Power purchases made by PG&E are subject to this performance standard, enforceable by the CPUC. Investments made by SSJID under the proposed electric service plan would also be subject to this standard through compliance filings required by the CEC as part of the statewide Power Source Disclosure program (SB 1305 of 1997) and under SB X1 2, which became law in April 2011 (Pub. Util. Code, ) Environmental Impacts and Mitigation Measures Significance Criteria The following significance criteria for climate change/greenhouse gas emissions were derived from Appendix G of the State CEQA Guidelines. Impacts would be considered potentially significant and would require analysis and mitigation if they would: Generate greenhouse gas emissions, either directly or indirectly, that may have a significant impact on the environment; or Conflict with an applicable plan, policy or regulation adopted for the purpose of reducing the emissions of greenhouse gases. For the analysis of whether the quantity of direct and indirect GHG emissions generated by the project would be considered potentially significant, this Subsequent EIR uses a preliminary GHG screening level of 10,000 metric tonnes per year (10,000 MTCO2e/yr). This level has been identified by several local air districts in California as a level for which an industrial project would not be expected to substantially conflict with existing California legislation adopted to reduce statewide GHG emissions. Although the SJVAPCD has not adopted any threshold that would apply to the kinds of activities contemplated in this EIR (i.e., not a stationary source and not a land use development project), this EIR applies the level of 10,000 MTCO2e/yr a threshold in the absence of a quantified threshold from SJVAPCD. The justification for this level is documented by California s other major air quality management organizations and agencies, including the California Air Pollution Control Officers Association (CAPCOA), the Bay Area Air Quality Management District (BAAQMD), and the South Coast Air Quality Management District (SCAQMD), whose rationales are incorporated here by reference. 6,7, Impacts and Mitigation The following section analyzes the impacts to climate change and GHG emissions caused by the four separate actions: Sphere Plan and Municipal Services Review, Proposed Expanded Sphere of Influence, Proposed 80 acre annexation, and Updated Plan to Provide Retail Electric Service CAPCOA, CEQA & Climate Change, Evaluating and Addressing Greenhouse Gas Emissions from Projects Subject to the California Environmental Quality Act, January Available at: Accessed July 7, BAAQMD, CEQA Air Quality Guidelines (and supporting documents), June Available at: gov/divisions/planning and Research/CEQA GUIDELINES/Updated CEQA Guidelines.aspx. Accessed July 7, SCAQMD, Interim CEQA GHG Significance Threshold for Stationary Sources, December 5, Available at: Accessed July 7, Draft Subsequent EIR November 2011

11 Sphere Plan and Municipal Services Review The infrastructure improvements likely to be necessary to provide an adequate level of service within the SOI are described in Section 2.3.1, and the MSR provides determinations as to the ability of SSJID to provide adequate public services. However, infrastructure improvements that have been previously approved or planned are not part of the proposed project, and the existing services provided by SSJID as described in the Sphere Plan and MSR are part of the baseline and environmental setting. No construction activities are proposed for approval with the potential adoption of the Sphere Plan and MSR. Because no construction or change in how SSJID operates would occur with adoption of the Sphere Plan and MSR, there would be no short term increase or long term change in GHG emissions. Approving the SSJID proposal to provide retail electric service would be a separate action from adoption of the MSR, as such the potential effects are described separately below. If the MSR is adopted without implementing the plan for retail electric service, SSJID would continue to provide its existing public services, and retail electric service would continue to be provided by PG&E and MID without change. Existing trends on power purchases and the associated GHG would continue unchanged. There would be no change in how these various service providers are subject to or compliant with the applicable GHG plans, policies, or regulations. Adaptation to Global Climate Change. Global climate change may reduce the availability of surface water and groundwater to meet future water supply demands within SSJID. Studies by California water resources and energy oversight agencies generally conclude that peak yearly runoff levels may be lower and may arrive earlier due to climate change (CAT, 2006; CAT, 2009). However, SSJID would satisfy its future water demand through its current water rights and conservation measures. Along with varying climate, SSJID must respond to variations in water availability due to periodic or prolonged droughts, changes to water rights, or saltwater intrusion levels in the groundwater basin. No specific strategy would be needed for adaptation to global climate change. Proposed Expanded Sphere of Influence The proposed expanded sphere of influence (SOI) would expand the existing SOI boundaries to be consistent with the Manteca city limits. This proposed SOI requires no construction or operation activities, and no change in retail electric service. Because no construction or change in operation would occur, there would be no change in GHG emissions associated with the proposed SOI expansion. Similarly, there would be no change in how the existing service providers in the area of the expanded SOI are subject to or compliant with the applicable GHG plans, policies, or regulations. Proposed 80 Acre Annexation SSJID has proposed the 80 acre annexation in order to provide irrigation water services to the owner of the property who has requested such service. The annexation would involve minor construction activity to install a sprinkler sump from the existing SSJID irrigation facilities. This construction would generate small quantities of GHG emissions due to use of fossil fueled vehicles and equipment. However, the construction emissions would be very limited, and by delivering irrigation water from an existing pipeline, the sprinkler sump system would displace or offset some emissions from the energy currently used by the landowner for groundwater pumping. No substantial short term increase or long term change in GHG emissions would occur due to the annexation. Similarly, there would be no change in how the existing service providers are subject to or compliant with the applicable GHG plans, policies, or regulations. November Draft Subsequent EIR

12 This annexation has been proposed as a separate action wholly independent of and for distinctly different reasons than SSJID s proposed plan to provide retail electric services, and it is not dependent in any way upon SSJID s separate proposal to provide such electric services. In the event, however, that the 80 acre annexation is approved, thereby bringing the 80 acre property within SSJID s service territory, and SSJID s plan to provide retail electric service is also approved, SSJID would provide retail electric services to the 80 acre property on the same basis and in the same manner as it provides service to other customers within its existing service territory. The potential GHG effects of extending retail electric service to this parcel are encompassed within the analysis which follows. Updated Plan to Provide Retail Electric Service Approval of the plan to provide retail electric service within SSJID s existing service territory would trigger construction of the distribution system modifications and allow SSJID to make decisions on power purchases for electricity used in the SSJID territory. Building and maintaining the proposed improvements to the electric distribution system would directly cause GHG emissions from fossil fueled vehicles and equipment, and these would occur throughout the SSJID territory over the life of the project. Both PG&E and MID presently generate and/or purchase the electricity for distribution to end use customers in the SSJID territory. SSJID proposes no new power plants or electric generating facilities, but it would procure power from wholesalers, much the same way that PG&E does at present. The power supply provided by MID to the SSJID territory would continue without change. Indirect effects of power purchases, the proposed construction necessary to separate the electric distribution system, and the operational activities that SSJID would need to undertake to keep up the electric system would each affect how GHG emissions occur. The potential to generate GHG emissions in each of these areas is discussed separately and then summarized in totality. The following analysis discusses whether the retail electric plan could cause significant GHG emissions or conflict with the applicable GHG plans, policies, or regulations, as mandated by the State CEQA Guidelines. SSJID has no immediate plans to annex areas within Area D or Area E (Figure 2 2 in the Project Description) or to provide retail electric service in these areas. These areas are outside the current SSJID territory, but inside its current and proposed SOI. However, if the current proposal for retail electric service is approved and if the areas are annexed in the future, SSJID would likely expand this service to Area E within 10 years and to Area D within 30 years. Foreseeable future impacts from this possible expansion of SSJID s retail electric service would be similar to impacts described for the proposed project; however, there are no plans for this possible expansion currently under consideration. Specific proposals for annexations or service beyond SSJID s existing territory may need to undergo the projectlevel environmental review process and other required approvals should SSJID decide to pursue such an annexation or service expansion in the future. Impact : Generate greenhouse gas emissions, either directly or indirectly, that may have a significant impact on the environment Implementing the proposed plan to provide retail electric service would create the following types of GHG emissions: Direct emissions from SSJID s construction of the proposed distribution system modifications; Direct emissions from SSJID s operation and maintenance of the electric distribution system; and Indirect changes in emissions from power generating facilities delivering electricity to SSJID s customers. Draft Subsequent EIR November 2011

13 Each of these categories of GHG is discussed separately then summarized in totality. GHG Emissions from Construction of Proposed Distribution System Modifications Construction activities for implementing the plan to provide retail electric service would include installation of new distribution line poles, underground excavation of trenches for cables, stringing of the new conductor, modification of existing substations, and construction of the new Jack Tone Substation. Construction would involve mobilizing the equipment and personnel, which would cause short term, unavoidable increases in GHG emissions from the fossil fueled vehicles and equipment. The construction related GHG emissions would cease within 24 months, with the most intense period of work being over approximately nine months in the 12 month period before the system is energized. The GHG emissions from construction activities are considered in the following context. First, the period of construction would be short term within the first 24 months of the life of SSJID providing electric service. Construction emissions would be intermittent and sporadic during that period. Total construction phase GHG emissions for implementing the proposed distribution system modifications would be 2,124 tons CO 2 or about 2,030 metric tonnes (MTCO2e) for the 12 month period of activities for separation of the system and less than this level for the remainder of construction (see Air Quality Attachment in Appendix B of this EIR). GHG Emissions during Operation and Maintenance of SSJID Electric Distribution System Substantially less activity would occur after the first year and after the separation. Maintenance of the retail electric service would involve approximately 12 employees for line work in three crews. These crews would perform conventional underground and/or overhead maintenance work, in a manner similar to that currently employed by PG&E. The addition of retail electric service would require about 70 additional full time staff that would generate GHG during routine use of fossil fueled vehicles and equipment. Additional GHG emissions would occur as a result of SF 6 leaking from gas insulated switchgear, but this type of source will be specifically regulated by CARB and subject to inventorying. The CARB SF 6 regulations (CARB, 2010a) would ensure that SF 6 leak rates throughout the SSJID electric distribution system achieve the same baseline average leak rates as those maintained by the PG&E system. This means that SSJID ownership of the SF 6 containing equipment would not lead to an increase of GHG emissions. The level of GHG emissions attributable to the activity that SSJID must undertake to operate and maintain the system would vary from year to year. Emissions would be expected to grow with the expansion of the system in response to growing demand while reducing over time as more efficient means of system operation become available. At a minimum, SSJID would provide adequate retail electric service, expand the capacity of the system as needed to meet future service demands, respond to emergency troubleshooting and repairs, and provide all customer support, as well as implement the Public Purpose Programs (Project Description, Section 2.6.4). Foreseeable operation/maintenance activities for any given year would tend to involve fewer workers and less equipment use than the initial year of SSJID system construction. Changing the ownership of the electric distribution system means that GHG emissions caused by SSJID workers and equipment in operating the system would displace those caused by PG&E today. Without considering the potential reduction in GHG emissions by reducing PG&E activity, the expected SSJID workforce for providing electric service would cause a recurring GHG emission rate no more than the rate expected for the initial year of SSJID system construction or about 2,000 MTCO2e/yr (please refer to Appendix B, Air Quality Attachment). November Draft Subsequent EIR

14 GHG Emissions of Power Purchases Background. Implementing the plan for retail electric service would require SSJID to make power purchases to serve its customers, while PG&E would no longer need to acquire power for the customers in the SSJID territory. SSJID plans to procure power for its customers through contract agreements with generators in the deregulated marketplace. SSJID has not proposed to enter into contracts with specific generating facilities, and SSJID does not propose to develop any new generating resources or power plants as a result of the project. Because SSJID would obtain its wholesale power supply independently of PG&E, an indirect change in emissions from existing power generating facilities would occur. In a very general sense, SSJID s power purchases would simply replace the electricity from some of PG&E s resources, with little or no change in the amount of power used. SSJID becoming the retail provider would reduce PG&E s load and allow PG&E to reduce its procurement of generating resources. Not all resources would be affected proportionally. If SSJID uses different generation resources than PG&E does to meet SSJID s load, the proposed project would result in a net change in electric procurement related GHG emissions. The difference between the emissions no longer produced from generation units displaced when PG&E stops procuring power for SSJID s load and the emissions from generation units that SSJID uses to serve this load determines the GHG impact of power purchases under SSJID s proposal. PG&E s Avoided GHG Emissions. The types of power plants (including hydroelectric, nuclear, natural gas fired, and other resources) that generate electricity for PG&E customers and the associated GHG emissions are shown in Table Changing the retail electric service provider would reduce PG&E s total electricity load by the amount of load that SSJID serves. SSJID s proposed retail electric plan could change how some existing generating units operate because power procured for SSJID would displace resources presently operated for PG&E. The proposed retail electric plan would not change PG&E s ownership of any generating facility or PG&E s existing power supply contracts, although it would reduce the need for PG&E to procure power for SSJID s customers. PG&E would continue to own generation, including zero emission nuclear and large hydroelectric, and due to its regulatory obligations PG&E would continue to procure renewable generation for its own customers. PG&E s operation of its nuclear, hydroelectric, and renewable resources would continue without change because, given that these resources have very low operating costs, PG&E uses them whenever they are available. 9 Similarly, PG&E s procurement of new renewable resources would see little or no change because PG&E needs additional renewable power to meet RPS compliance goals. The proposed retail electric plan would not change the process of how existing power plants are dispatched to respond to load. 10 The transmission system serving the SSJID territory would continue to be owned and operated as it is today by PG&E and MID, and the CAISO would continue to control dispatch 9 10 Subject to seasonal resource planning for hydroelectric power. The term dispatch is used in this context to refer to the process of controlling the periods during which particular electric generating plants operate. The related term dispatch order is used to refer to the order or sequence in which different electric generating plants interconnected to the electric system grid are started and operated to meet changing electric system customer requirements which typically vary in a cyclical fashion from day to night. Draft Subsequent EIR November 2011

15 to the PG&E system. The CAISO is mandated to dispatch units in a least cost manner, 11 and various models of the California system 12,13 reveal that nuclear, hydroelectric, and renewable resources, which have very low operating costs, are dispatched first, followed by the most efficient fossil fuel fired units. The last to be dispatched, the marginal resources, 14 are the least efficient natural gas fired units. 15 Given this context, in response to the SSJID plan for retail electric service, PG&E would be expected to somewhat decrease its purchases or procurement of generation from fossil resources, which have higher operating costs than the nuclear, hydroelectric, and renewable resources. In particular, PG&E would decrease power purchases from its marginal resources, which are the fossil resources with the highest operating costs. Therefore, to determine the avoided emissions, this analysis relies on the GHG emission rate of the marginal resources that would be avoided by SSJID s proposal rather than the average GHG emission rate of all of PG&E s resources. Using a portfolio average GHG emission rate would not be suitable for this analysis because doing so would imply that all generating units would be affected by the load reduction in equal proportion. In actuality, most units would be unaffected and only the production of the marginal units would be displaced. In California, the marginal units that would be displaced by a reduction in load have very different emissions characteristics from the base load units that dominate the average emissions rate. The average rate reflects generating units that would be unaffected by the proposed retail electric plan, especially zero emission nuclear and large hydroelectric resources. As a result, the average GHG emission intensity does not represent the emission rate of the resources that would be displaced by a load reduction. In developing rules to implement California s greenhouse gas statutes, the CEC, CPUC, and CARB collaborated on development of an appropriate GHG emissions rate for marginal electricity generation that would be displaced by a reduction in load or new generating resources. The CEC and CPUC recommended use of an emissions factor of 1,100 pounds per MWh (0.499 MTCO2e/MWh) for marginal electricity generation available in the market. 16 CARB, however, adopted a different, more conservative (lowerbound), estimate for the GHG emissions of marginal resources for purposes of reporting avoided emissions. The CARB emission rate of MTCO2e/MWh (CARB, 2010d) reflects a default emission rate for all dispatchable market resources (excluding hydroelectric resources) with capacity factors less than 60 percent, as determined over 2006 to These resources include resources that are likely to be displaced as a result of PG&E s loss of load to SSJID, as well as more efficient market resources that are California Independent System Operator Corporation (CAISO). Fifth Replacement FERC Electric Tariff; Section April 1, Available at: Energy and Environmental Economics, Inc. (E3) Greenhouse Gas Modeling of California s Electricity Sector to 2020: Updated Results of the GHG Calculator Version 3b Update; pp Prepared for: California Public Utilities Commission (CPUC). October R. McCarthy and C. Yang, Institute of Transportation Studies, UC Davis. Determining marginal electricity for near term plug in and fuel cell vehicle demands in California: Impacts on vehicle greenhouse gas emissions, p. 3. Journal of Power Sources. October 12, The marginal resource is the resource that would be used to serve an additional increment of load added to the system. In other words, it is the resource that would be last to be dispatched and first to be displaced. Additional details defining the marginal resources and the dispatch order in California are found in Appendix C of this EIR (Greenhouse Gas Assessment Technical Report) and in Appendix B: Fundamental Market Assumptions of the Market Expert Report (PA, 2011). Described on p. 168 of CARB, 2010d. November Draft Subsequent EIR