BILL ANALYSIS
AB 1724
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 1724 (Pavley)
As Amended July 3, 2001
Majority vote
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|ASSEMBLY: |50-25|(June 5, 2001) |SENATE: |21-14|(August 27, |
| | | | | |2001) |
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Original Committee Reference: NAT. RES.
SUMMARY : Deletes the sunset on customer credits to public
entities for the purchase of renewable energy that is not under
contract with a utility and mandates that the State Energy
Resources Conservation and Development Commission (CEC)
establish a cap on the aggregate amount of funds which may be
awarded to public entities under the program.
The Senate amendments delete the provision in this bill that
provided that only public entities with contracts in force on
January 1, 2001, are eligible for the customer credit, and
instead mandates that CEC establish a cap on the aggregate
amount of funds which may be awarded to public entities under
the program.
EXISTING LAW :
1)Requires generally CEC to perform duties relating to the
conservation and development of energy resources under the
Warren-Alquist State Energy Resources Conservation and
Development Act.
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.
AS PASSED BY THE ASSEMBLY , this bill deleted the sunset on
customer credits to public entities for the purchase of
renewable energy that were not under contract with a utility and
provided that only public entities with contracts in force on
January 1, 2001, are eligible for the customer credit.
AB 1724
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FISCAL EFFECT : According to the Assembly Appropriations
committee, the total amount to be collected for the next 10
years through a utility surcharge, for the customer credit
program and for other energy programs, has been established in
prior legislation. By continuing to allow public entities
eligible for the credits, this bill could change the allocation
of those credits. This amount is unknown, but the current
credit to the City of Santa Monica exceeds $200,000 annually.
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 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 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 $0.10
per kilowatt hour with a $1,000 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 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 this 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
CEC, the city had received approximately $200,000 in
reduced-price rates per year to partially offset the higher
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costs of renewable electricity.
Analysis Prepared by : Kyra Emanuels Ross / NAT. RES. / (916)
319-2092
FN: 0002060