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California League of Food Processors 17

15 days to file a response. Thereafter, Appellants reply

briefs were due by March 20, 2015. Due to the state’s

delay in filing its Reply, the deadline for filing Amicus

Briefs was extended to May 18, 2015.

To date, at least three briefs are expected to be filed in

support of the appeal from industry organizations.

SJVAPCD Adopts Action Plan to Obtain Cap-and-Trade

Auction Funds

The state budget for 2014-2015 allocated approximately

$850 million of Cap-and-Trade funding to a variety of

programs that are administered by a variety of state

agencies. For 2015-2016, the governor’s initial budget

proposal for Cap-and-Trade expenditure is $1 billion;

however, it appears that total funding will be higher

since transportation fuels are now included in the Cap-

and-Trade program for the first time. It is expected that

the governor will release an updated proposal in the May

budget revision.

To ensure that the Valley receives its fair share of the

funding, the San Joaquin Valley Air Pollution Control

District (Air District) Governing Board, at the May 2015

session, adopted an action plan it hopes will position

the Air District to effectively compete for a share of the

state’s cap-and-trade auction funds.

It is state policy that a quarter of Cap-and-Trade funds

must go to disadvantaged communities. CalEPA

developed a model called the CalEnviroScreen to identify

communities facing both economic and environmental

challenges. Based on the latest CalEnviroScreen model,

23 out of the top 30 most disadvantaged communities

in California are within the Air District’s jurisdiction

located in the San Joaquin Valley. But the Air District

faces challenges from more affluent regions in the state

competing for these funds.

Recommendations approved by the Air District have

authorized the district to lead the development of a new

San Joaquin Valley Cap-and-Trade Coalition comprised

of community leaders from Valley businesses, farmers,

community groups, cities, counties and other local

agencies. The coalition is expected to actively advocate

for Cap-and-Trade funds for the Valley. If successful, the

coalition is expected to bring Cap-and-Trade funds to the

Air District for expenditure under the district’s existing

incentive programs.

Energy Issues:

PG&E Natural Gas Rate Case

On December 19, 2013, PG&E filed an application seeking

Public Utility Commission (Commission) approval for its

2015 Gas Transmission & Storage (GTS Rate Case) rate

design, which contemplates revenue requirements of

$1.286 billion. Overall, this represents a 57.9% increase

in natural gas transportation rates for noncore industrial

gas customers.

CLFP has been very engaged in this rate making case.

A final decision is expected by the Commission in late

summer or early fall.

UtilityAllowanceAllocationProceeding for EITE Facilities

CLFP is a party to a California Public Utilities Commission

(Commission) proceeding which will determine how the

utilities will distribute the money received from the sale

of the allowances given to the utilities to hide the cost of

AB32 from residential electric ratepayers and to reduce

the risk of emissions leakage in industry that may result

from California’s cap-and-trade program.

In a previous decision, the Commission decided that

the investor-owned utilities should return all the GHG

allowance revenue resulting from the sale of the free

allowances to residential, small business, and emissions-

intensive and trade-exposed (EITE) customers. In that

decision, specific methodologies were developed for

allocating the GHG allowance revenue to EITE customers

calling the revenue returned the “California Industry

Assistance” and the Commission set the eligibility

requirements for CA Industry Assistance for EITE

customers.

In general, a facility will qualify for assistance if it operates

in an industry characterized by the North American

Industry Classification System (NAICS) codes as eligible

for industry assistance under Table 8-1 of the Cap-and-

Trade Regulation. The Commission’s Energy Division is

tasked with calculating the amount of assistance each

EITE customer will receive mirroring the methodologies

developed by the California Air Resources Board (CARB):

those being product-based and energy-based, though

the particulars of the methodologies will differ slightly

to account for differences between direct emissions

(combustion) and indirect emissions (electricity).

For food processors:

• Obligated facilities already subject to the cap-and-

tradewill receive theCA IndustryAssistanceaccording

to the Commission’s product-based methodology.

• For facilities subject to mandatory reporting only,

(emissions under 25,000mmtCO2e annually) CA

Industry Assistance will be calculated on an energy-

based benchmark.

• Facilities under 10,000 mmtCO2e will be allowed

to attest and verify eligibility for the CA Industry

Assistancecalculatedonanenergy-basedbenchmark.

The Commission expects the utilities to begin

distribution by October of 2015. CLFP is working with

the Commission’s Energy Division to provide eligible EITE

facilities with a choice as to whether to receive their

allotted assistance as a credit on their bill or in the form

of a check from their utility provider.