BILL ANALYSIS
AB 1138
Page 1
Date of Hearing: April 23, 2001
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Roderick D. Wright, Chair
AB 1138 (La Suer) - As Amended: April 19, 2001
SUBJECT : Infrastructure development: low-interest loans.
SUMMARY : This bill contains provisions in a similar bill, AB X1
71 (La Suer). This bill expands the type of low interest loan
programs which can be effected through the bank board to loans
made to powerplant facilities generating electrical power during
peak demand periods. Specifically, this bill :
1)Allows for loans to a sponsor or participating party for costs
associated with the repowering of existing peak demand
electrical powerplants or for the planning.
2)Contains a sunset date of January 1, 2007.
EXISTING LAW establishes the California Infrastructure and
Economic Development Bank (bank) within state government having
prescribed duties.
Authorizes the bank board to make secured loans and undertake
related activities for the purpose of financing projects that
relate to economic development and infrastructure improvements,
including utilities and power facilities.
FISCAL EFFECT : Unknown.
COMMENTS :
The California Infrastructure and Economic Development Bank was
created in 1994 to promote economic revitalization, enable
future development and encourage a healthy climate for jobs for
California, according to the author. Current energy supply
constraints and the spot price charged for generated electricity
coming into the state of produced by out of state generators
within California, has resulted in escalating prices to
consumers.
Use of the bank to provide low cost loans to peaker plant
repowering or for new construction is an appropriate source of
funding and should encourage repowering of peak demand
AB 1138
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facilities. There is a need in California to meet additional
demand during times of supply constraint, and especially during
peak demand periods additional generation supply is necessary.
The author's recent amendment to sunset the loan program for
peak demand facilities in January of 2007 provides some
parameters for encouraging additional peak demand during a time
of constraint but not in continuing to repower or construct peak
demand facilities under this program beyond a timeframe wherein
sufficient supply is being generated.
Staff recommends:
The author may wish to clarify under what terms an existing
powerplant designed to meet peak demand qualifies for the low
interest loans provided by the bank. It also needs to be
determined that an additional peak demand facility needs to be
brought on line and would thus qualify for funding under this
measure.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file.
Opposition
None on file.
Analysis Prepared by : Kelly Boyd / U. & C. / (916) 319-2083