Business groups across California are frustrated that a state Senate committee last week delayed economic stimulus legislation that would have allowed 125 major construction projects to proceed without new environmental challenges.

The bill by Sens. Lou Correa, D-Santa Ana, and Dave Cogdill, R-Modesto, would have allowed the state Business Transportation and Housing Agency to exempt 125 construction projects – including 10 in Los Angeles County – from further environmental challenges under the California Environmental Quality Act for five years. Projects that have already received approvals of their environmental impact statements would qualify for exemptions.

The bill, which was set aside for future consideration, was crafted with the goal of boosting the economy and creating jobs. It is one of a series of bills in the Legislature that target CEQA, which has been used by opponents of major projects to file lawsuits and other challenges.

A wide coalition of business groups, including major statewide business organizations and construction industry trade groups, rallied behind the bill, claiming it would create jobs. Environmental organizations oppose the legislation, saying it would set a precedent for gutting CEQA and that some of the projects would create more pollution.

The Senate Environmental Quality Committee set aside the bill Feb. 24 after some discussion. That move brought cries of frustration from business groups around the state.

“This flies in the face of common sense,” said Tom Flintoft, chairman of the Los Angeles County Business Federation, or BizFed. “This would have put thousands of Californians back to work in the construction industry on already CEQA-reviewed projects in a time of desperate need. It’s time to stop playing politics and think about the future of this state.”

Enforcement Delayed

The construction industry has scored a victory. The state Air Resources Board has postponed enforcement of a controversial rule regulating diesel emissions from off-road equipment – including cranes, bulldozers and forklifts.

A portion of the rule takes effect this week. It requires owners and operators of older off-road diesel equipment to retrofit or replace their diesel engines at a cost of tens of thousands of dollars per engine.

But air board Executive Officer James Goldstene announced an indefinite delay in enforcement. He cited the economy and a delay in getting permission from the U.S. Environmental Protection Agency to enforce the rule.

“Over the last several years, the construction industry has felt the sting of the faltering economy with reduced activity and idled off-road equipment,” Goldstene said in a statement. “This has made it difficult for contractors to pay for required clean-air upgrades to their fleets.”

Goldstene also set a March 11 hearing on the impact of the economic downturn, and whether other parts of the rule and enforcement should be delayed.

The agency will consider reducing future requirements for owners and operators of construction equipment who have spent money to meet the delayed regulations.

Electric Switch

Nearly nine years after large manufacturers in the state lost the ability to choose their electric power providers, they are on the verge of getting that ability back.

The right to choose power providers, called direct access, was one of the hallmarks of the state’s failed deregulation of the electricity market in the late 1990s. Large manufacturers had pushed hard for direct access, citing electricity costs that were double the levels in surrounding states.

But the power crisis in late 2000 and early 2001, which was a result of the deregulation, prompted then-Gov. Gray Davis and the Legislature to scrap the law and new direct-access contracts were banned.

Last year, the Legislature passed a bill authorizing the limited return of direct access. The California Public Utilities Commission in February released details of how direct access will work when it is set to start up again April 11.

Under this new direct-access plan, large industrial companies in Southern California will be able to sign up for contracts with third-party electricity providers on a first-come, first-served basis. The contracts will be limited by a cap on the number of megawatts that Southern California Edison and other utilities can offload.

“This is for the most part what we’ve wished for since direct access was suspended back in 2001,” said Gino DiCaro, spokesman for the California Manufacturers & Technology Association.

Staff reporter Howard Fine can be reached at hfine@labusinessjournal.com or at (323) 549-5225, ext. 227.

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