What is the Global Warming Solutions Act?
California Assembly Bill 32 (AB32), the Global Warming Solutions Act of 2006, is a California State Law enacted in 2006. The purpose of the law is to slow down climate change by establishing a comprehensive, state-wide program to reduce greenhouse emissions from all sources within the state. In particular, AB32 requires the California Air Resources Board (CARB) to develop regulations to limit California greenhouse emissions to 1990 levels by 2020. The goal would equate to roughly 25% reduction in greenhouse gases by 2020. Accordingly, CARB has developed AB32 compliance regulations for California business and commercial sectors, including instate electricity generators as well as importers of electricity into California. A key part of AB32 regulations is a market based mechanism whereby GHG compliance instruments (allowances and offsets) can be traded among the regulated entities to help them minimize the costs of compliance.

Effect on Azusa's resource portfolio
Azusa is committed to meeting the GHG reduction goals of AB32. At the same time it should be noted and understood that AB32 compliance measures required of Azusa will have costs associated with them.

Like other Southern California municipal utilities Azusa owns substantial coal fired generation assets making the carbon footprint of Azusa’s resource portfolio relatively high. Some note that Northern California municipalities have less carbon intense resource portfolios. Indeed, in general, Northern California utilities, whether publicly or privately owned, get more hydro power from Northern Sierras and Central Valley Project. However, these North-South differences in resource portfolio composition are a function of history and geography and not indicative of historical environmental stewardship.

In this regard, we are making headway by investing in renewable resources and transitioning our long term generation portfolio to lower carbon intensive resources.