BILL ANALYSIS
AB 1724
Page 1
Date of Hearing: April 23, 2001
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Howard Wayne, Chair
AB 1724 (Pavley) - As Introduced: March 19, 2001
SUBJECT : Public utilities: Reliable Electric Service
Investments Act.
SUMMARY : This bill deletes an existing sunset on local
government eligibility to receive customer credits for
purchasing renewable energy that is not under contract with a
utility.
EXISTING LAW :
1)Generally requires State Energy Resources Conservation and
Development Commission (CEC) to perform duties relating to the
conservation and development of energy resources under the
Warren-Alquist State Energy Resources Conservation and
Development Act (Public Resources Code section 25000 et seq.)
2)Provides customer credits to anyone who purchases renewable
energy not under contract with a utility.
3)Sunsets the customer credit to public entities on January 1,
2002.
THIS BILL : Deletes the sunset on customer credits to public
entities for the purchase of renewable energy that is not under
contract with a utility.
FISCAL EFFECT : Unknown.
COMMENTS :
According to the author's office, AB 1890 (Brulte), Chapter 854,
Statutes of 1996 provided $540 million from ratepayers
(including local governments) to encourage investment and
competition in a renewable energy market during the transition
years from 1998 to 2001. The funds were placed in the Renewable
Resource Trust to be administered by the CEC. Last year, AB 995
(Wright), Chapter 1050, Statutes of 2000 and SB 1194 (Sher),
Chapter 1050, Statutes of 2000, among other things, extended the
collection of funds by the three investor owned utilities for
AB 1724
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the Renewable Resource Trust for an additional 10 years in five
year blocks.
Among the various allocations of the funds are customer credits
for the purchase of renewable energy that is not under contract
with a utility. The customer's total credit is based on how
much electricity was consumed in a one-year period (up to 10
cents per kilowatt hour with a $1000 cap per electric meter) and
could be incorporated either into the electricity price paid to
the provider or itemized separately. Under existing law, that
credit is available through the CEC for both private and public
entities that wish to purchase renewable energy. However, AB
995 and SB 1194 sunset the eligibility of public entities for
the customer credit on January 1, 2002.
According to supporters of the bill, because public agencies
regularly pay for the customer credit, they deserve access to
its benefits. In addition, they believe that the sunset on the
eligibility prejudices local governments' ability to receive the
incentive.
An example of a community using renewable energy is the City of
Santa Monica. The City of Santa Monica has committed to
purchasing 100% of its power for municipal purposes from
suppliers of renewable energy. Under the existing program at
the CEC, the city had received approximately $200,000 in
reduced-price rates per year to partially offset the higher
costs of renewable electricity.
REGISTERED SUPPORT / OPPOSITION :
Support
City of Berkeley
City of Santa Monica
Opposition
None on file
Analysis Prepared by : Kyra Emanuels Ross / NAT. RES. / (916)
319-2092