Comment Log Display

AB32 Program Design

1.	Many of the attached comments relate to potential methods for
funding of processes so that AB32 can meet its goals.  Cities that
take a leadership role perhaps need little incentive to assist in
achieving these ambitious, but necessary, goals. Many cities will
see this as another “unfunded State mandate” unless a process is
developed that allows cash-strapped cities to assist in meeting
the AB32 goals. 

In the following comments, some effort was used to develop
potential funding methods in which cities would be paid a fee for
furthering the efforts to meet the goals of AB32.  To get the
greatest buy-in as possible from cities statewide, a sustainable
funding mechanism is imperative.  Local governments can provide
tremendous improvements in the near term and greater improvements
over the long term!

2.	Feebates as used in this document do NOT conform to the
original definition as it relates to automobiles, but DOES relate
to a general process that is:
•	Revenue neutral to the agency implementing the feebate
•	Guides developers, agencies and jurisdictions towards meeting a
certain goal; in this case meeting goals of AB32 by increasing
fees for projects that do not meet criteria and reducing fees (or
rebating fees) for projects that do meet criteria.

3.	Page 21: Combined Heat and Power (CHP) plants are wonderfully
efficient and could be applicable to the City of Sacramento’s 240
acre brown field project at the Rail Yards.  However, many parties
need to come to agreement regarding the operations, maintenance and
particularly capital cost of the systems.  Consider:
•	Providing tax credits for the use of CHP’s
•	Reviewing the legal and operational structures of other states
and countries that have better success in implementing CHP than in
California.

4.	Page 28, Public Goods Charge on Water:  The PGC should be a
flat rate that applies equally throughout the State. 
Alternatively, for residential customers, consider a tiered rate
that increases with increased usage.  Also, since PGC’s would be
new to water utilities, consider ramping up over time, starting
with the largest water purveyors that have end-use customers.  

5.	Page 28, Public Goods Charge on Water:  Please take into
consideration that water rates within the state are tremendously
diverse; some areas being 20 times greater than other areas and
that projects that are cost effective in one region of the State
are not necessarily cost effective in another region; yet on the
whole, California is an arid state.  To address this problem:
•	without affecting any local jurisdictions water rates to a great
extent
•	to foster creativity which should save water better than
mandatory reduction targets
would suggest that approximately [75%] of the PGC that is
collected by a jurisdiction is used by the same jurisdiction to
improve water efficiency within its service territory.  The
remaining [25%] should be deposited into an account that is used
to competitively fund water conservation projects anywhere in the
state; competitiveness should be based primarily on gallons of
water saved per dollar invested; other secondary considerations
might include
•	Energy intensity of water being saved
•	Quality of water being saved.
•	Ability to defer or eliminate major Statewide water
infrastructure projects
•	Other life cycle issues

6.	Page 28, Public Goods Charge on Water:  Recommend that the
proposed PGC would include Federal water because:
•	Federal climate legislation is in the works
•	Federally subsidized water provided by Bureau of Land Management
(and power provided by Western Area Power Administration) undercuts
the need to reduce CO2 by artificially making projects that are
cost effective everywhere else not cost effective where subsidized
water and power are provided.
•	PGC on Federal water (and power) should only be applied if the
Federal water customer is an end-user.  If Federal water is
provided to a water purveyor, that purveyor will have a PGC of
their own.

7.	Page 41: Consider implementing fees based on carbon intensity
of products and services being taxed, not based on energy units. 
See below and comment for page 71.

8.	Page 41, Carbon Fees: Our local electric utility, SMUD has an
average annual carbon intensity of +/- 600 pounds per MWh (0.272
metric ton/MWh).  Based on this AVERAGE annual emissions factor, a
$10 per metric ton fee would add a carbon surcharge of $2.72/MWh or
$0.00272/kWh 
•	This is slightly more complicated than charging based on energy
units, perhaps simplicity is desired by State?
•	Disadvantages: surcharge cost per unit of energy would be
different for various providers (e.g. LADWP would have a high
charge per kWh and PG&E and SMUD would have lower charges); as
carbon intensity for products DROP, fees will have to INCREASE to
maintain constant income.
•	Advantages: more directly addresses reduction in carbon
emissions; sends message that the goal of the fee is carbon
reduction, not fee collection.

9.	Page 41, Carbon Fees:  By using MARGINAL emissions factors
instead of AVERAGE emissions factors to set fees (or a weighting
of each), a stronger message could be sent to energy providers to
retire, or divest dirtier sources of energy.
•	This is more complicated than using AVERAGE emissions factors,
would be applicable primarily to electric utilities and perhaps
oil refineries as they develop low carbon fuels
•	Disadvantages: would provide less stable annual funding due to
annual changes in marginal sources
•	Advantages: sends stronger message to retire older resources and
to develop new lower carbon fuels

Example: Utility x  sells 100,000 GWh per year into the California
grid and has an average annual emissions factor of 700 pounds of
CO2 per MWh and the marginal 10% of the annual energy provided has
an emissions factor of 1,600 pounds of CO2 per MWh.  If 60% average
and 40% marginal weighting is used, Utility x’s funding emission’s
factor is 10,600 pounds per MWh.

Utility x’s portion of the funding for the administration of AB32
becomes

(100,000GWh * 10,600 pd/Mwh)
------------------------------------------------------------------
sum of all Cal sales(energy * funding emissions factor)

10.	Page 41: High energy costs have a disproportionate effect on
low income families.  If carbon fees are implemented, consider
doubling the carbon fee on gasoline and rebate 50% of the fee as a
state income tax credit, say:
•	$3,000 for 10% and lower tax bracket families
•	$0 for 20% and higher tax bracket families
•	Interpolate between 10% and 20% tax bracket’s
Optionally, a portion of the 50% that is to be credited could
fund:
•	Weatherization and efficiency upgrades to low-income homes
•	Public transit infrastructure
•	Public transit fare-box subsidies
•	Green collar job creation

11.	Page 41: Consider including carbon fees on imports into
California to:
•	Sensitize importers to carbon footprint of their products
•	Reduce leakage of business from California
•	Provide level playing field for in-state produced goods that
meet carbon regulations
•	An import fee will address CMUA’s concern about the high cost of
business in California

Some examples might include:
•	Cement (and other products) that is (are) produced using coal
powered electricity.
•	Carpet: NSF/ANSI 140-2007 Platinum carpet would have no
surcharge; Gold might have $1 per square yard surcharge; silver
might have $2 per square yard surcharge, etc.
•	New Vehicles: This would be in addition to AB1493 and would be
based on expected annual fuel use and expected vehicle life.
•	Food imports: Based on transportation costs, farming and
fertilizing methods.

12.	Page 41: Consider recommending to local governments that they
include VOLUNTARY carbon surcharges on services that they provide
to:
•	Provide source of new revenue
•	Gage residents acceptance of addressing climate change in their
community
Some examples might include:
•	Water Services:  Water pumping is approximately 25% of the City
of Sacramento’s municipal operations carbon footprint.  Less than
a 2% surcharge on typical City water bill would allow the City to
purchase renewable power for all City potable, sanitary and storm
treatment and pumping.  
•	Solid Waste Services:  Solid Waste Operations (fuel,
electricity, etc.) and methane generation at landfill accounts for
approximately 10% of the City of Sacramento’s municipal operations
carbon footprint.  Less than a 10% surcharge on typical City solid
waste bill would allow the City to purchase renewable power for all
City solid waste operations and to plant additional urban forest to
offset fuel used by trucks and fugitive methane generation from
landfill.  
•	Room/ Site Rental Fees:  Libraries and Community Centers can
offer carbon neutral room rentals
•	Convention Center Rental Fees:  Convention Centers can offer
carbon neutral events

13.	Page 41 and 47:  For carbon fees that are collected from
imports into California, consider:
•	Providing sustainable community grants to local governments
•	Funding county-wide and city-wide greenhouse gas inventory
efforts and annual reporting
•	Granting funds to local jurisdictions based on their efforts to
move their community towards sustainable operations (see
additional comments on developing a sustainability matrix).

14.	Page 47: under “Incentives To Local Governments”:  For cities
to assist in achieving the goals of AB32, a sustainable funding
mechanism needs to be developed.  Below are some concepts that
might be considered.
•	New Construction: Recommend using PUC or POU collected Public
Goods Charge (PGC) to provide incentives to local governments to
ensure that energy efficient construction that exceeds Title 24
requirements is achieved; perhaps $0.10 per square foot for
minimum compliance of Title 24 + 15%, $0.15 per square foot for
20%, $0.25 per square foot for 30%.  Residential incentives might
be per unit instead of per square foot.
o	Oversight needed (perhaps) by State to ensure validity of Title
24 calculations and inspections.
•	Point Of Sale (POS) Ordinances: Energy efficiency targets for
existing building stock identified on page 21 indicate that
Sacramento’s share of the requested improvements, on the average,
will require EVERY BUILDING IN THE CITY OF SACRAMENTO (as an
example) to be 10% to 12% more efficient than current.  Recommend
using PUC or POU collected Public Goods Charge (PGC) to fund
enforcement of point of sale ordinances for residential and
commercial construction; perhaps on a cost per square foot level. 
Residential incentives might be per unit instead of per square
foot.
o	Implement a statewide public relations campaign to identify
advantages of POS ordinances to stakeholders, including realtors
and BIA.
o	BIA might be an ally if fees are NOT collected from new
development.
•	Solar Water Heating and Solar Photovoltaic:  Solar targets
identified on page 21 are daunting for City of Sacramento (i.e.
2,500 solar water heaters and 13,000 solar photovoltaic systems);
recommend using PUC or POU collected Public Goods Charge (PGC) to
provide incentives to local governments to assist in achieving
goals.  Incentive to local governments should be based on annual
solar fraction installed, say $100 per kW.
•	Carbon Neutral Land-Use Ordinance (CNLO):  Improving the
efficiency of new and existing building stock addresses a portion
of the workload of local governments; another portion of the
workload that affects energy usage is land use planning and
transportation options that are available to the community. 
o	See Attachment A

15.	Page 47, Incentives to Local Governments:  Property Taxes,
Feebates and Land Use:  It is somehow necessary to defiscalize
land use so that cities are not joyous when big boxes and auto
malls come to town. It may be possible to incent local governments
to enforce a CNLO by applying a feebate type concept to property
tax DISBURSEMENTS, not collections.  For example, a project that
is built that STRONGLY meets the intent of a CNLO might cause 120%
of the normal property tax disbursements to be made to the local
jurisdiction from the County; a project that is built that LIGHTLY
meets the intent of a CNLO might cause 80% of the normal property
tax disbursements.
•	This could have a cascade effect in that the local jurisdiction
could then provide incentives to project developers for projects
that heavily meet the CNLO AND/OR could charge higher fees for
projects that lightly meet the CNLO.
•	Feebate concept might also be applied to property tax
COLLECTIONS and thus motivate project developers to meet AB32, but
this would have to be coordinated with Proposition 13.
•	The problem with the use of feebates is that many projects need
to NOT comply (or lightly comply) to an action so that they can be
charged higher fees in order for other projects to receive a rebate
for heavily complying with the action.
•	Additional problem with feebates is that somebody has to
determine which projects heavily comply or lightly comply with
CNLO… perhaps IPLACE3S might be used for this determination? 

16.	Page 47, Incentives to Local Governments:  Sales Taxes,
Feebates, and Land Use:  This concept is similar to Property Taxes
and Feebates concept identified above, except that by applying to 2
sources of a local jurisdictions income (Property Taxes and Sales
Taxes), the overall unit rate for each would be lower.

17.	Page 47, Incentives to Local Governments:  Property Taxes,
Sales Taxes, Feebates and General Sustainability:  The concept of
sustainability goes far beyond land use decisions.  For property
tax disbursements and for sales tax disbursements that are not
subject to land-use feebates, consider developing a matrix of
general sustainability issues (landfill diversion, per capita
waste reduction improvements, meeting communitywide greenhouse gas
reduction goals, water use efficiency improvements, etc.) and use
the results of the matrix annually to adjust property tax
disbursements to local jurisdictions… higher than normal if they
do well and lower than normal if they don’t do well:
•	Potential program should be designed so that local jurisdictions
would tend to work with each other and not against each other
(perhaps use regional information instead of jurisdictional
information?).
•	Potential program should start out with a range of 99% to 101%
of normal property tax disbursements to be used as a shake-down
period and increase over time to say 95% to 105% (or whatever is
necessary).
i.	Ideally, the State could find additional funds (e.g. fees from
carbon imports) to supplement sales tax disbursements to Cities
such that all cities are made whole and that initial range of
disbursements starts at 100% to 102% instead of 99% to 101%

18.	Page 47, Incentives to Local Governments:  Local governments,
as tax exempt corporations, have to resort to convoluted
lease-to-own or Power Purchase Agreements in order to install
solar energy systems cost effectively.  Solar photovoltaic systems
are NOT rocket science and city building maintenance folks are
eager to install solar project, could do a wonderful job at
installing, would learn and become more aware of the issues, BUT
THEY CAN’T DO THE WORK AS IS BECAUSE FEDERAL TAX CREDITS DRIVE THE
COST
•	Consider working with Federal government to allow tax exempt
corporations (like Cities) to auction, sell, or otherwise benefit
from tax credits without having to engage third parties.
•	Develop state tax credits that tax exempt organizations can take
advantage of (similar to Oregon law).

19.	Page 47: It would be reasonable to use carbon fees that are
collected from a new construction project to fund the incremental
cost of a renewable power plant.  This is similar to Indirect
Source Rules that some air quality districts are developing.

Example: SMUD’s Greenergy renewable energy product costs a premium
of 1c/kWh; a typical new building uses 15 kWh per SF per year and
will operate for approximately 50 years.  A carbon fee of $7.50
per square foot (1c/kWh * 15 kWh/SF * 50 years) would allow the
new construction project in question to be considered near-carbon
free. 

20.	Page 71, Program Funding: An additional source of funding for
the program could be a $/ton fee for organic waste that is
landfilled.

21.	Page 71: CIWMB Fees and Feebates:  CIWMB is currently funded
based on a fixed cost per ton of waste that is landfilled. 
Consider using a feebate type concept and modifying fees that are
collected from landfills such that organic wastes (and other
landfill inappropriate materials) have HIGHER charges and
inorganic wastes have LOWER charges.  Total collections would
remain unchanged, but would incent landfill owners to keep
greenhouse gas generating materials out of the landfill.

22.	Page 71: Consider basing fees on carbon intensity, not on
energy units.  For example, some utilities have average annual
emissions factors of approximately 500 pounds per MWH, other
utilities have emissions factors approaching 2,000 pounds per MWH.
 By charging fees based on carbon intensity, utilities and refiners
will have greater incentive to reduce carbon intensity of their
products.

Attachment A- CNLO 

Attachment A

Carbon Neutral Land Use Ordinance (or other reasonable name)

The Carbon Neutral Land Use Ordinance (CNLO) is intended to
encourage community planning as opposed to project-by-project
planning.

CEQA Significance Threshold:  Any new construction or major
remodeling project that generates new carbon dioxide emissions is
significant due to the cumulative, non-dissipating effects of
carbon dioxide.  Any project that :

[emits less than [50 ] metric tons per year of direct and indirect
carbon dioxide emissions]
[has less than 100 peak hour trips or 1,000 daily trips]

may use the Prescriptive method of compliance and avoid the need
to perform an EIR unless other aspects of project require EIR. 
Projects larger than the:

[50] metric tons per year emissions threshold]
[has greater than 100 peak hour or 1,000 daily trips]

must use the Performance based approach identified below.

Carbon Dioxide Mitigation Time Table:  All new construction
projects:

[emitting greater than [50] metric tons per year of CO2 emissions,
but less than [900] metric tons per year of CO2 emissions]
[greater than 100 peak hour trips/day or 1,000 trips per day but
smaller than a General Plan Amendment, a Specific Plan (or
similar), or a Project as defined by SB 221 or 610]

must mitigate 35% of their carbon emissions in 2008 and increase
at the rate of 5% per year until all new construction projects are
carbon neutral by 2026.  The applicable time date for this
requirement is date of permit issuance.  

All projects:
[greater than [900] metric tons of CO2 emissions per year]
[equivalent to a General Plan Amendment, a Specific Plan (or
similar), or a Project as defined by SB 221 or 610]

must mitigate 100% of their emissions through a combination of
on-site and off-site measures.

In 2007, the per capita emissions rate for Californians was 14
metric tons per person per year; in the absence of better data on
project carbon dioxide emissions, this default value will be used
to achieve 10.5 metric tons per person per year in 2008 and
ratcheting down to 0 metric tons per person per year by 2026.

Compatibility with Title 24 :  This ordinance is intended to
complement Title 24 and does not conflict.  If any incompatibility
is found between Title 24 and this ordinance, Title 24 rules.  This
ordinance addresses several issues not covered by Title 24:
•	This ordinance address vehicle miles travelled in order to
properly use the development. Vehicle use- both company owned and
staff owned.
•	Building energy use is covered by Title 24
•	Comparing project characteristics to those in the nearby
community
•	[indirect emissions associated with procurement and contracting
choices]

Leakage Clause  :  This ordinance will not take effect until [75%]
of the jurisdictions (by population) within the 6 county SACOG
planning region adopt a similar ordinance or unless the State (or
AQMD?) passes a law (or regulation) that supersedes the need for
this ordinance.

Direct Emissions (Scope 1 ):  Direct emissions are those that are
generated on-site through burning of fossil fuels in stationary
and mobile equipment.

Indirect Emissions (Scope 2):  Indirect emissions are those that
are generated by a utility company that provides energy services
to the project, most commonly electricity services

Indirect Emissions Associated With Procurement And Contracting
Choices (Scope 3): Building users can reduce their carbon
footprint based on products that they purchase and in choosing the
businesses that they contract with.  For example the use of 100%
recycled content paper produces fewer carbon dioxide emissions
than regular paper.; fuel used by contractors to deliver/haul
firms products... how to measure and regulate… BERC
certification??

Pre-Approved Land Use Designations: To assist in making sites
shovel ready for development, the City has the option of doing the
required study indicated under the Performance compliance method
and to identify acceptable projects that meet the requirement of
this ordinance, thus eliminating the need for the project to do
this study in the CEQA document.

Climate Action Trust Fund (CATF ):  The CATF is used to mitigate
the carbon dioxide emissions of projects by installing projects
off-site that reduce emissions locally.  Examples of these
projects include: (1) low income home weatherization; (2) funding
incremental cost of renewable power plants; (3) planting trees;
(4) water conservation.
•	An alternative compliance mechanism will be provided for those
that wish to perform off-site mitigation through a CARB/AQMD
certified process

Mandatory Measures Checklist:  All items on this checklist must be
complied with whether the Prescriptive or Performance Compliance
methods are used.
•	Projects exempt from Title 24 must be at least [15%] more
efficient than business as usual design.
•	Projects must be at least [15%] more efficient than Title 24
requires.
•	Firms with greater than [25] employees will have a
Transportation Systems Management Plan that reduces single
occupant vehicle usage by [35%] relative to business as usual.
•	Firms with greater than [25] employees that has a company fleet
will have it’s fleet evaluated at least once every four years by
the Sacramento Metropolitan AQMD.  The overall make-up of the
corporate fleet will comply with Rule xxx .
•	Firms must purchase at least [80%] of their printer and copier
paper as 100% recycled content, post consumer content waste, and
unbleached.

Prescriptive Compliance Approach: This section of the ordinance
will be updated tri-annually to ensure that this simpler
compliance method meets the intent of the Carbon Dioxide
Mitigation Time Table.  For projects installed after 2008, the
following is required in addition to the Mandatory Measures
checklist:
•	Project must conform with Pre-Approved Land Use Designation for
the site.
and
•	Project must be at least [15%] more efficient than the 2005
Title 24 energy code requires or Project must pay $[0.20] per
gross square foot of floor space into the CATF for each percentage
point (or part of) that the project falls below the [15%] minimum
efficiency threshold to a maximum of [$3.00] per gross square
foot.

Performance Compliance Approach:  This approach requires a project
that exceeds the threshold identified above to include a carbon
analysis in the CEQA documentation of actual and proposed
development within 2 mile radius of CEQA regulated project.  At a
minimum, the following shall be included in the study:
(a)	actual job count and living unit count 
(b)	estimated salary ranges of dwellers in the study area and
rental/mortgage costs
(c)	projected job count and living unit count when study area is
built out per requirements of General Plan
(d)	number of amenities within ˝ mile of each residential unit;
(e)	percentage of dwelling units that are within ˝ mile of a RT
designated transit stop that has a level of service (LOS) A = >
150 stops per week(??); and LOS B (120-150??), C (80-120?), D
(50-80?), E (20-50?) and F = < 20 stops per week ??
(f)	percentage of businesses that are within ˝ mile of a transit
stop that has a level of service (LOS) A = > 150 stops per week;
and LOS B, C, D, E and F = < 20 stops per week??
(g)	??

Based on accepted planning criteria(?), the study shall use the
above facts and estimates to determine :
(a)	Correlation between estimated salary ranges of workers and
rental/mortgage costs and how that correlation affects vehicle
miles travelled within the study area
(b)	Vehicle miles travelled per year to work within the study area
and per household
(c)	Bar graph of the number of amenities that are located within ˝
mile of each living unit in the study area (both actual and built
out).
(d)	Per capita emissions of project in most significant units,
usually in metric tons per person per year.

If analysis proves to be beneficial to the study area, development
fees will be reduced by xx%; if analysis proves to not be
beneficial to the study area, development fees are to be increased
by yy%.  In either case, compliance with the Carbon Dioxide
Mitigation Table is required for direct and indirect emissions
associated with the project.