Status Report
Much of the first half of May was dedicated to organizing stakeholders and
lobbying for the passage of SB 28x (Sher), which was the Legislature first
attempt at siting reform and included several IEP-sponsored proposals.  SB
28x was the last bill to be signed by the Governor and chaptered into law
before the close of the first extraordinary session.  The final version
included:

? Conforming the timing of offsets for power plants to Clean Air Act
requirements.
? Substituting CEQA-style hearings for the trial-like proceedings of the
CEC.
? Streamlining the permit process for the modernization of existing power
plant sites.
? Giving consideration to the positive environmental impacts of a proposed
project.
? Improving the timeliness and coordination of state and local agency
review.
? Extending the current deadlines for the expedited review for "peaker"
plants and expanding the application to consider re-certification or
replacement.

There was also a small number of instances where Edson + Modisette assisted
on other issues at the request of IEP staff or IEP member companies.  As
always, Edson + Modisette is here if you need assistance on any other
issues.

Since SB 28x is only a first step in making changes to the siting process,
IEP member should now be thinking about what is next.  A list of IEP
proposals still on the table include:

? Permitting local agencies to make zoning changes or other decisions for
power plants contingent upon CEC CEQA Compliance
? Giving deference to other state and regional agencies
? Easing the threshold for override of local land use requirements.
? Making the ISO responsible for determining interconnection requirements

Assembly Member Calderon's office is currently reviewing these proposals in
conjunction with an effort to develop an environmental dispatch protocol.
IEP has weighed-in on this issue and has strongly advocated that 1)
reliability should always be the first priority; 2) protocol should be
limited to RMR units and out-of-market calls only; and, 3) any follow-up to
SB 28x should also consider IEP siting proposals left on the table.  I
circulated Asm. Calderon's proposed environmental dispatch language to IEP
members last Friday which targets those generating units running beyond
their air permits per the Governor's most recent executive order.  In the
short-term, I expect there will be additional stakeholders meetings on this
and other siting issues as Asm. Calderon decides how to proceed and in what
legislative vehicle.

All this action on the Assembly side does not rule out Senator Sher's part
on the siting issue.  Since SB 28x moved to the Governor's desk, Sen. Sher
has ensured us and others that that was only the first step and he would
like to continue pursuing additional siting reforms during this legislative
session.  SB 28xx in the second extraordinary session is currently a spot
bill ready to take up that cause.  There are pros and cons for either author
to move forward on siting reform, but I would recommend for the time being
that IEP let Asm. Calderon and Sen. Sher work out their turf wars while IEP
shares its proposals with both.

There are also other siting bills with the potential to move forward.  SB
86xx (Peace/Burton) was introduced last week which would require a developer
to begin construction on a project within 6 months of receiving
certification from CEC or lose its permit, and introduces the newly created
California Consumer Power and Financing Authority into the siting process.
Senator Morrow has called stakeholders together this week to provide input
on SB 76xx which is currently in spot bill format.  Asm. Wright still has
his siting vehicle, AB 48xx, poised to move if needed; and Sen. Battin has
several siting bills introduced also if needed.

I have mentioned this before, but it is worth repeating.  With the interest
in siting issues in the Capitol having waned only slightly, IEP members may
want to consider meeting again to develop a second list of proposed siting
reforms (in addition to the above issues left over from the first list).
Such a list should take into account the Governor's Executive Orders and
possibly what generators would be willing to give up to the enviros in
exchange for "big ticket" reforms.

Please call if you have any questions about the above invoice or any of the
siting issues pending before the Legislature.

Sincerely,



JULEE MALINOWSKI-BALL
Senior Associate

Julee Malinowski-Ball
Senior Associate
Edson + Modisette
916-552-7070
FAX-552-7075
jmball@ns.net