BILL NUMBER: SBX1 5	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 4, 2001
	AMENDED IN ASSEMBLY  APRIL 2, 2001
	AMENDED IN SENATE  MARCH 5, 2001
	AMENDED IN SENATE  FEBRUARY 20, 2001
	AMENDED IN SENATE  FEBRUARY 5, 2001

INTRODUCED BY   Senators Sher, Alarcon,  Bowen,  and
Burton
   (Principal coauthors:  Senators Chesbro, Machado, and Perata)
   (Principal coauthor:  Assembly Member Shelley)
   (Coauthors:  Senators Figueroa, Karnette, Murray, Polanco, Scott,
Soto, and Torlakson)
   (Coauthors:  Assembly Members Aroner, Keeley,  NegreteMcLeod,
 Pavley,  Strom-Martin, and Thomson)

                        JANUARY 17, 2001

   An act to amend Section 15814.20 of, and to add and repeal Chapter
3.5 (commencing with Section 4240) of Division 5 of Title 1 of, the
Government Code,  and  to amend Section 25402.5 of
the Public Resources Code,  relating to public utilities
  and to add Sections 740.7, 740.9, 740.10, and 740.11
to the Public Utilities Code, relating to energy  , making an
appropriation therefor, and declaring the urgency thereof, to take
effect immediately.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 5, as amended, Sher.  State energy projects.
   (1) Existing law authorizes state and local agencies to develop
energy conservation, cogeneration, and alternate energy supply
sources at the facilities of public agencies through contracts and
leases in accordance with specified criteria.
   This bill, until January 1,  2004   2003
 , would authorize state agencies to implement energy related
projects, subject to certain criteria, and to enter into contracts
for these purposes subject to certain criteria.  The bill would
authorize the Director of General Services to exempt state energy
projects from the advertising and competitive bidding requirements
set forth in state law, if the director deems it necessary to
implement these provisions.  The bill would exempt state energy
projects from a specified capital outlay process at the discretion of
the Department of Finance.
   (2) Existing law prohibits the State Public Works Board from
entering into leases and energy service contracts sooner than 45 days
after notification to the Joint Legislative Budget Committee.
Existing law authorizes the joint committee to hold a hearing within
45 days of receipt of the notification.
   This bill would prohibit the board from entering into a lease and
energy services contract sooner than 15 days after notification and
would authorize the joint committee to hold a hearing within 15 days
of receipt of the notification.
   (3) Existing law requires the State Energy Resources Conservation
and Development Commission to adopt interior and exterior lighting
energy conservation standards, as specified.
   This bill would require the commission to adopt lighting standards
for outdoor lighting, as defined, that is not subject to the above
standards.
   (4) Existing law provides for the establishment and implementation
of various energy efficiency programs administered by the State
Energy Resources Conservation and Development Commission and the
Public Utilities Commission.
   This bill would  , until January 1, 2005, 
appropriate  $926,960,000   $708,900,000 
from the General Fund to implement energy efficiency programs and
supplement existing energy efficiency programs.  Of that amount, from
the General Fund,  $326,000,000   $246,300,000
 would be allocated to the Public Utilities Commission, 
$405,500,000   $282,600,000  would be allocated to
the State Energy Resources Conservation and Development Commission,
$10,000,000 would be allocated to the Department of Consumer Affairs,
$50,000,000 would be allocated to the Department of General
Services, $120,000,000 would be allocated to the Department of
Community Services and Development  , and $15,460,000 would
be allocated to the Department of Water Resources to fund various
energy efficiency programs  , as scheduled, and subject to
reallocation and conditions.  Under the bill, any funds that are
unencumbered by  January 1, 2005   March 31,
2002  , would revert to the General Fund on that date  ,
except as otherwise provided  .
   (5)  Under existing law, the Public Utilities Commission
requires every electrical and gas corporation to file a schedule of
rates and charges providing baseline rates.  In establishing these
rates, existing law requires the commission to avoid excessive rate
increases for residential customers, and to establish a gradual
differential between the rates for respective blocks of usage.
   This bill would require that the commission assure that a
specified condition is met with respect to any interruptible service
or curtailment programs it adopts.  The bill would require that any
binding mandatory curtailment programs adopted by the commission,
which exempt customers from Stage III rotating outages, in exchange
for partial load curtailments during every rotating outage period
include specified provisions for agricultural and water supplier
customers, as defined.  The bill would require each public utility
electrical corporation to develop and offer its agricultural
customers, including those customers involved in the production or
processing, or both, of agricultural products, and water suppliers,
on or before April 30, 2001, the opportunity to participate, in
addition to other programs developed by the commission, in a demand
reduction program, as specified.  
   This  
   (6) This  bill would declare that it is to take effect
immediately as an urgency statute.
   Vote:  2/3.  Appropriation:  yes.  Fiscal committee:  yes.
State-mandated local program:  no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  The Legislature finds and declares as follows:
   (a)  California is currently experiencing an energy crisis which
threatens to adversely affect the economic and environmental
well-being of the state.
   (b) One of the most cost-effective, efficient, and environmentally
beneficial methods of meeting the state's energy needs is to
encourage the efficient use of energy.
   (c) The purpose of this act is to ensure the immediate
implementation of energy efficiency programs in order to reduce
consumption of energy and to assist in reducing the costs associated
with energy demand.
   (d) To the maximum extent feasible, the expenditure of funds
appropriated pursuant to this act shall be prioritized based upon
immediate benefits in peak energy demand reduction and more efficient
use of energy.
  SEC. 2.  Section 15814.20 of the Government Code is amended to
read:
   15814.20.  The board shall not enter into leases and energy
service contracts authorized under this chapter sooner than 15 days
after notification in writing of the necessity therefor has been
submitted to the Chairperson of the Joint Legislative Budget
Committee and the chairpersons of the fiscal committees of each
house, or sooner than whatever lesser time the chairperson of the
joint committee, or his or her designee, may in each instance
determine.  At the request of the chairperson of the joint committee,
the joint committee may hold a hearing within 15 days of receipt of
the notification.  If a hearing is held, the affected agencies shall
be provided all information available to the joint committee at least
10 days in advance of the hearing.  In the event that a hearing is
conducted, the joint committee may recommend to the board approval,
modification, or rejection of leases or energy service contracts.
  SEC. 3.  Chapter 3.5 (commencing with Section 4240) is added to
Division 5 of Title 1 of the Government Code, to read:

      CHAPTER 3.5.   STATE ENERGY PROJECTS

   4240.  It is the intent of the Legislature to permit state
agencies  to develop energy conservation, efficiency,
cogeneration, and alternate energy supply sources   to
implement energy conservation and efficiency measures  on
public property in accordance with this chapter in the most expedient
manner possible.
   4241.  As used in this chapter, and as used in Section 3 of the
act adding this chapter, "state energy project" means equipment, load
management techniques, and other measures or services that reduce
energy consumption and provide for more efficient use of energy in
state buildings or facilities, or buildings or facilities owned or
operated by community colleges.
   4242.  State energy projects may be implemented under this chapter
with the approval of the Director of General Services and the
Director of Finance.
   4243.  Prior to awarding or entering into a contract, agreement,
or lease, the state agency shall request proposals from qualified
persons. After evaluating the proposals, the state agency shall award
contracts based on qualifications, including the consideration of
such factors as the experience of the contractor, the type of
technology to be employed by the contractor on the energy project,
the cost to the agency, and any other relevant considerations.  State
agencies may also award contracts to persons selected from the pool
of qualified energy service companies established pursuant to Section
388 of the Public Utilities Code, when it is determined they are
qualified to perform the work on a particular project. For purposes
of this chapter, energy projects shall be exempt from Chapter 10
(commencing with Section 4525).
   4244.  Notwithstanding Section  4243, the Director of General
Services may exempt a state energy project from the advertising and
competitive bidding requirements of this code and the Public Contract
Code, if the director deems the exemption necessary to implement the
purpose of this chapter, to reduce peak electricity demand, and to
improve energy efficiency.
   4245.  At the discretion of the Department of Finance, state
energy projects may be exempted from the capital outlay process,
including, but not limited to, Section 13332.11.
   4246.  The Department of General Services may adopt regulations
for purposes of this chapter as emergency regulations in accordance
with Chapter 3.5 (commencing with Section 11340) of Part 1 of
Division 3 of Title 2.  For purposes of Chapter 3.5, including, but
not limited to, Section 11349.6, the adoption of the regulations
shall be considered by the Office of Administrative Law to be
necessary for the immediate preservation of public peace, health,
safety, and general welfare.  Notwithstanding the 120-day limit
specified in subdivision (e) of Section 11346.1, the regulations
shall be repealed 180 days after their effective date, unless the
department complies with Chapter 3.5 (commencing with Section 11340)
of Part 1 of Division 3 of Title 2 as provided in subdivision (e) of
Section 11346.1.  
   4246.5.  On or before October 1, 2001, and quarterly thereafter,
the Department of Finance shall provide to the Chairperson of the
Joint Legislative Budget Committee a report of all state energy
projects implemented pursuant to the exemptions provided either in
Section 4244 or 4245 of this chapter.  
   4247.  This chapter shall become inoperative on June 30, 2003,
and, as of January 1, 2004, is repealed, unless a later enacted
statute, that becomes operative on or before January 1, 2004, deletes
or extends the dates on which it becomes inoperative and is
repealed.  
   4247.  This chapter shall remain in effect only until January 1,
2003, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2003, deletes or extends
that date. 
  SEC. 4.  Section 25402.5 of the Public Resources Code is amended to
read:
   25402.5.  (a) As used in this section, "lighting device" includes,
but is not limited to, a lamp, luminaire, light fixture, lighting
control, ballast, or any component of those devices.
   (b) (1) The commission shall consider both new and replacement,
and both interior and exterior, lighting devices as lighting which is
subject to subdivision (a) of Section 25402.
   (2) The commission shall include both indoor and outdoor lighting
devices as appliances to be considered in prescribing standards
pursuant to paragraph (1) of subdivision (c) of Section 25402.
   (3) The Legislature hereby finds and declares that paragraphs (1)
and (2) are declarative of existing law.
   (c) The commission shall adopt efficiency standards for outdoor
lighting.  The standards shall be technologically feasible and
cost-effective.  As used in this subdivision, "outdoor lighting"
refers to all electrical lighting that is  not  subject to
standards adopted pursuant to Section 25402, and includes, but is not
limited to, street lights, traffic lights, parking lot lighting, and
billboard lighting.  The commission shall consult with the
Department of Transportation (CALTRANS) to ensure that outdoor
lighting standards that affect CALTRANS are compatible with that
department's policies and standards for safety and illumination
levels on state highways.
  SEC. 5.  In order to achieve a total reduction in peak electricity
demand of not less than 2,585 megawatts, the sum of  nine
hundred twenty-six million nine hundred sixty thousand dollars
($926,960,000)   seven hundred eight million nine
hundred thousand dollars ($708,900,000)  is hereby appropriated
from the General Fund to the Controller for allocation according to
the following schedule:
   (a) In order to achieve a reduction in peak electricity demand and
meet urgent needs of low-income households,  three hundred
twenty-six million dollars ($326,000,000)   two hundred
forty six million three hundred thousand dollars ($246,300,000) 
for allocation by the Public Utilities Commission for the customers
of electric and gas corporations subject to commission jurisdiction,
to be expended in the following amounts:
   (1)  Sixty-six million dollars ($66,000,000) 
 Fifty million dollars ($50,000,000)  to encourage the
purchase  , refurbishment   of energy efficient
equipment  , and retirement of inefficient appliances and
improvements in the efficiency of high-efficiency heating,
ventilating, and air-conditioning (HVAC) equipment  insulation or
other efficiency measures.  Any funds expended pursuant to this
paragraph for the purchase of refrigerators, air-conditioning
equipment, and other similar residential appliances shall be expended
pursuant to the following criteria:
   (A) Priority for the expenditure of funds shall be given for the
purchase or retirement of those appliances in low- and
moderate-income households, and for the replacement of the oldest and
least efficient appliances.
   (B) Any retirement of residential equipment and appliances
undertaken pursuant to this paragraph shall be undertaken in a manner
that protects public health and the environment.  Nothing in this
paragraph affects the requirements of Article 10.1 (commencing with
Section 25211) of Chapter 6.5 of Division 20 of the Health and Safety
Code and Chapter 3.5 (commencing with Section 42160) of Part 3 of
Division 30 of the Public Resources Code.
   (2) One hundred million dollars ($100,000,000) to provide
immediate assistance to electric or gas utility customers enrolled
in, or eligible to be enrolled in, the California Alternative Rates
for Energy (CARE) Program established pursuant to Section 739.1 of
the Public Utilities Code.  Funds appropriated pursuant to this
paragraph shall be expended to increase and supplement CARE discounts
and to increase enrollment in the CARE program.  These funds
shall be available to assist those customers enrolled or eligible for
CARE who are on payment arrangements or have current or pending
overdue notices due to increases in energy rates.  Not more than 20
percent of the funds appropriated in this subdivision shall be
allocated to increase enrollment.  The funding provided in this
subdivision is intended to supplement, but not replace,
surcharge-generated revenues utilized to fund the CARE program. 

   (3) Twenty million dollars ($20,000,000) to augment funding for
low-income weatherization services provided pursuant to Section 2790
of the Public Utilities Code, and to fund other energy efficient
measures to assist low-income energy users.
   (4)  Twenty million dollars ($20,000,000)  
Sixteen million three hundred thousand dollars ($16,300,000) 
for high-efficiency and ultra-low-polluting  pump and motor retrofits
for oil or gas, or both, producers and pipelines. For the purposes
of this paragraph, "ultra low polluting" means retrofit equipment
which exceeds the requirements for best available control technology
within the air district in which the pump or motor is located.
   (5)  One hundred million dollars ($100,000,000) 
 Sixty million dollars ($60,000,000)  to provide incentives
to encourage replacement of low-efficiency lighting with
high-efficiency lighting systems.  
   (6) Twenty million dollars ($20,000,000) to encourage installation
of demand-responsive and energy-efficient technologies in buildings
owned and operated by counties and cities. 
   (b) In order to achieve a reduction in peak electricity demand,
 four hundred five million five hundred thousand dollars
($405,500,000)   two hundred eighty-two million six
hundred thousand dollars ($282,600,000)  to the State Energy
Resources Conservation and Development Commission (hereafter the
Energy Commission), to be expended in the following amounts for the
following purposes:
   (1)  Eighty-seven million dollars ($87,000,000) 
 Sixty million dollars ($60,000,000)  for allocation by the
Energy Commission to locally owned public utilities  in the
following amounts for the following purposes:    for
energy efficiency, peak demand reduction, and low income assistance
measures in the service areas of the locally owned public utilities
analagous to those measures and programs funded in the service areas
of the electric and gas corporations subject to the jurisdiction of
the Public Utilities Commission pursuant to subdivision (a). 

   (A) Twenty million two hundred thousand dollars ($20,200,000) to
encourage the purchase, refurbishment, and  
   To the extent that any of the funds allocated to the locally owned
public utilities are used to encourage the purchase of energy
efficiency equipment and  retirement of inefficient appliances
and improvements in the efficiency of high-efficiency heating,
ventilating, and air-conditioning (HVAC) equipment insulation, and
other efficiency  measures.  Any funds expended 
 measures, funds expended  pursuant to this paragraph for
the purchase of refrigerators, air-conditioning equipment, and other
similar residential appliances shall be expended pursuant to the
following criteria:
   (i) Priority for expenditure of funds shall be given for the
purchase of those appliances in low- and moderate-income households,
and for the replacement of the oldest and least efficient appliances.

   (ii) Any retirement of residential equipment and appliances
undertaken pursuant to this paragraph shall be undertaken in a manner
that protects public health and the environment.  Nothing in this
paragraph affects the requirements of Article 10.1 (commencing with
Section 25211) of Chapter 6.5 of Division 20 of the Health and Safety
Code and Chapter 3.5 (commencing with Section 42160) of Part 3 of
Division 30 of the Public Resources Code.  
   (B) Six million eight hundred thousand dollars ($6,800,000) to
provide incentives to encourage replacement of low-efficiency
lighting with high-efficiency lighting.
   (C) Sixty million dollars ($60,000,000) for energy efficiency,
peak demand reduction, and low-income assistance measures in the
service areas of the locally owned public utilities analagous to
those measures and programs funded in the service areas of electric
and gas corporations subject to the jurisdiction of the Public
Utilities Commission pursuant to subdivision (a). 
   (2)  Seventy million dollars ($70,000,000)  
Thirty-five million dollars ($35,000,000)  to implement programs
to improve demand-responsiveness in heating, ventilation,
air-conditioning, lighting, advanced metering of energy usage, and
other systems in buildings. Of the amount appropriated pursuant to
this paragraph,  not more than thirty-five million dollars
($35,000,000) shall be expended to provide incentives for the
installation of real time, time-of-use meters.
   (3) Fifty million dollars ($50,000,000) to implement a 
 ten million dollars ($10,000,000) shall be used to encourage the
purchase and installation of advanced metering and telemetry
equipment for agricultural and water pumping customers in order to
improve load management and demand responsiveness techniques
particularly applicable to this sector.
   (3) Thirty-five million dollars ($35,000,000) to implement a 
low-energy usage building materials program, and other measures to
lower air-conditioning usage in schools, colleges, universities,
hospitals, and other nonresidential buildings.   These funds
shall not be available for community college facilities if Assembly
Bill No. 29 of the First Extraordinary Session is enacted, becomes
effective, and provides funding for energy efficiency measures to the
community college from the Proposition 98 Reversion Account. 
   (4)  Sixty million dollars ($60,000,000)  
Fifty million dollars ($50,000,000)  to implement a program to
encourage third parties to implement innovative peak demand reduction
measures.
   (A) Of the amount appropriated pursuant to this paragraph,
 not more than ten million dollars ($10,000,000) shall be
expended for innovative peak demand reduction measures in the
agricultural sector.   ten million dollars ($10,000,000)
shall be used for the California Agricultural Pump Energy Program to
facilitate the efficiency testing of existing agricultural water
pumps and to provide incentives for the retrofitting of pumps to
increase efficiency as necessary.  Up to one million dollars
($1,000,000) of those funds shall be used for grants to local public
agencies to enhance and expedite the testing of agricultural water
pumps. 
   (B) Of the amount appropriated pursuant to this paragraph, not
more than one million dollars ($1,000,000) shall be expended by the
commission to fund one-time startup costs for innovative voluntary
programs to reduce air emissions through energy conservation and
related actions pursuant to programs authorized by law in effect on
the effective date of this act.  
   (5) Fifty million dollars ($50,000,000) to implement a program to
reduce peak load electricity usage for the agricultural sector.  The
commission shall adopt guidelines for expenditure of funds pursuant
to this paragraph that ensure the equitable distribution of funds
appropriated pursuant to this paragraph among small, medium, and
large sized farming and agricultural operations.
   (6) Fourteen million five hundred thousand dollars ($14,500,000)
to provide incentives for installation of light-emitting diode (LED)
traffic signals.
   (7) Twenty million dollars ($20,000,000) to encourage installation
of demand-responsive and energy-efficient technologies in buildings
owned and operated by counties and cities.  
   (5) Seventy-five million dollars ($75,000,000) to implement
programs to reduce peak load electricity usage, encourage bio-gas
digestion power production technologies, enhance conservation and
encourage the use of alternative fuels, including, but not limited to
instate natural gas resources for the agricultural and water pumping
sector.  These funds shall be allocated by the Energy Commission, in
the form of rebates or grants, in the following amounts for the
following purposes:
   (A) Forty-five million dollars ($45,000,000) to encourage the
purchase of high efficiency electrical agricultural equipment,
installed, on or after January 1, 2001, and incentives for overall
electricity conservation efforts. Eligible equipment shall include,
but not be limited to, lighting, refrigeration, or cold storage
equipment.  Any agricultural energy conservation incentive program
shall recognize the increased demand due to currently reduced water
supply conditions.
   (B) Fifteen million dollars ($15,000,000) to offset the costs of
retrofitting existing natural gas powered equipment to burn
alternative fuels, including, but not limited to, instate produced
"non-spec" or "off-spec" natural gas.
   (C) Fifteen million dollars ($15,000,000) in grants to be used for
pilot projects designed to encourage the development of bio-gas
digestion power production technologies.
   (i) Ten million dollars ($10,000,000) of these funds shall be used
to provide grants for the purpose of encouraging the development of
manure methane power production projects on California dairies.
   (ii) Five million dollars ($5,000,000) of these funds shall be
used to provide grants to reduce peak usage in southern California by
revision of system operations to produce replacement energy as a
byproduct of the anaerobic digestion of bio-solids and animal wastes.

   (6) Ten million dollars ($10,000,000) to provide incentives for
installation of light-emitting diode (LED) traffic signals. 

   (8)  
   (7)  Seven million dollars ($7,000,000) to implement a
program to teach school children about energy efficiency in the home
and at school.  
   (9) Twenty million dollars ($20,000,000)  
   (8) Ten million dollars ($10,000,000)  for incentives for the
retrofit of  existing distributed generation owned and operated by
municipal water districts to replace diesel and natural gas
generation with cleaner technology that reduces oxides of nitrogen
emissions.  Funds expended pursuant to this paragraph shall be
expended exclusively for retrofit equipment that meets or exceeds the
requirements for best available control technology within the air
district in which the distributed generation owned and operated by a
municipal water district is located, or with standards adopted by the
state Air Resources Board pursuant to Section 41514.9 of the Health
and Safety Code upon the effective date of those standards.
Technologies eligible pursuant to this paragraph include natural gas
reciprocating engines, microturbines, fuel cells, and wind and solar
energy renewable technologies.  
   (10) One million four hundred thousand dollars ($1,400,000) to
fund 16 personnel-years in the Energy Commission to implement this
subdivision.  Funds appropriated pursuant to this paragraph shall be
used to fund temporary staff resources, including, but not limited
to, limited term positions, not to exceed a term of four years, at
the commission for the exclusive purpose of implementing programs
funded pursuant to this subdivision.
   (11) Twenty-five million dollars ($25,000,000) to provide
low-interest or zero-interest loans to schools pursuant to the Energy
Conservation Assistance Act (Chapter 5.2 (commencing with Section
25410) of the Public Resources Code).
   (12)  
   (9)  Six hundred thousand dollars ($600,000) for four
personnel-years to improve the ability of the Energy Commission to
provide timely and accurate assessments of electricity and natural
gas markets.
   (c)  Except for funds expended to implement programs established
pursuant to Section 25555 of the Public Resources Code, for which the
Public Utilities Commission or the Energy Commission has adopted and
published guidelines pursuant to that section, funds appropriated
pursuant to subdivisions (a) and (b) shall be expended pursuant to
guidelines adopted by each commission.  The guidelines shall be
exempt from the requirements of Chapter 3.5 (commencing with Section
11340) of Part 1 of the Division 3 of Title 2 of the Government Code
and shall do all of the following:
   (1) Establish cost-effectiveness criteria for programs funded.
Within 10 days from the date of the adoption of criteria pursuant to
this paragraph, each commission shall provide a copy of the criteria
to the chairperson of the Legislative Budget Committee, to the
chairpersons of the appropriate policy and fiscal committees of both
houses of the Legislature, and to the Governor.
   (2) Limit administrative costs to not more than 21/2 percent of
the amount of the funds expended.  For the purposes of this
paragraph, "administrative costs" means commission personnel and
overhead costs associated with the implementation of each measure or
program.  However, "administrative costs" does not include costs
associated with marketing or evaluation of a measure of a program
 , including any two-year limited positions, as approved by the
Department of Finance, necessary to implement the programs  .
   (3) Allow reasonable flexibility to shift funds among program
categories in order to achieve the maximum feasible amount of energy
conservation, peak load reduction, and energy efficiency by the
earliest feasible date.
   (4) Establish matching fund criteria that, except for funds
appropriated pursuant to paragraphs (2) and (3) of subdivision (a),
ensure that entities eligible to receive funds appropriated pursuant
to subdivisions (a) and (b) pay an appropriate share of the cost of
acquiring or installing measures to achieve the maximum feasible
amount of energy conservation, peak load reduction, and energy
efficiency by the earliest feasible date.
   (5) Establish mechanisms and criteria that ensure that funds
expended pursuant to this section through electric and gas
corporations are not seized by the creditors of those corporations in
the event of a bankruptcy.  In implementing this paragraph, the
commissions shall adopt mechanisms such as the segregation of funds
by the electric or gas corporation, the holding of those funds in
trust until they are expended, and the reversion of funds to the
General Fund in the event of bankruptcy.
   (6) Establish tracking and auditing procedures to ensure that
funds are expended in a manner consistent with this act.
   (d) Within six months of the effective date of this section, each
commission shall contract for an independent audit of the
expenditures made pursuant to subdivisions (a) and (b) for the
purpose of determining whether the funds achieved demonstrable energy
peak demand reduction while limiting administrative costs associated
with expenditures made pursuant to those subdivisions.  Within one
year of the effective date of this section, each commission shall
submit the audit prepared pursuant to this paragraph to the
Chairperson of the Joint Legislative Budget Committee, to the
chairpersons of the appropriate policy and fiscal committees of both
houses of the Legislature, and to the Governor.
   (e) Ten million dollars ($10,000,000) to the Department of
Consumer Affairs to implement a public awareness program to reduce
peak electricity usage.   Any public awareness program to reduce
peak electricity usage conducted by the Department of Consumer
Affairs after November 30, 2001, shall be conducted pursuant to a
contract in accordance with Article 4 (commencing with Section 10335)
of Chapter 2 of the Public Contract Code.   The department
shall ensure that the program includes the use of nontraditional mass
media, including, but not limited to, the use of community based
organizations, mass media in different languages, and media targeted
to low-income and ethnically diverse communities.

      (f) Fifty million dollars ($50,000,000) to the Department of
General Services to be expended for the purposes of implementing
Chapter 3.5 (commencing with Section 4240) of Division 5 of Title 1
of the Government Code.  The department shall limit its
administrative costs to not more than 21/2 percent of the funds
expended.  For the purposes of this paragraph, "administrative costs"
means personnel and overhead costs associated with implementation of
each measure or program.  However, "administrative costs" does not
include costs associated with marketing or evaluation of a measure or
program.
   (g) One hundred twenty million dollars ($120,000,000) to the
Department of Community Services and Development for the purpose of
supplementing the Low-Income Home Energy Assistance Program (LIHEAP).
  The department may also use these funds for the purposes of
increasing participation in the LIHEAP program.  The department shall
use funds appropriated pursuant to this paragraph in the following
manner:
   (1) The department shall implement a California Low Income Home
Energy Assistance Program (LIHEAP).  Services provided by California'
s LIHEAP shall be designed to do both of the following:
   (A) Increase energy conservation and reduce demand for energy
services in low-income households.
   (B) Assure that the most vulnerable households cope with high
energy costs.
   (2) The program shall include weatherization and conservation
services, energy crisis intervention services, and cash assistance
payments.
   (3) (A) Eligibility for California LIHEAP shall include households
with incomes that do not exceed the greater of either of the
following:
   (i) An amount equal to 60 percent of the state median income.
   (ii) An amount equal to 80 percent of the county median income.
   (B) In no area shall eligibility be provided to households whose
income is greater than 250 percent of the federal poverty level for
this state.
   (4) The department shall examine the penetration of other energy
programs, including, but not limited to, those provided through
federal LIHEAP, utility companies, and other parties, to identify the
adequacy of services to elderly persons, disabled persons,
limited-English-speaking persons, migrant and seasonal farmworkers
and households with very young children.  California LIHEAP funds
shall be distributed so as to ensure that vulnerable populations have
comparable access to energy programs.
   (5) The department shall ensure that services under California
LIHEAP are delivered using all of the following requirements:
   (A) The department shall establish reasonable limits for
expenditures, including up to 15 percent for outreach and training
for consumers.
   (B) Grantee agencies shall do special outreach to vulnerable
households, including outreach to senior centers, independent living
centers, welfare departments, regional centers, and migrant and
seasonable farmworkers.
   (C) Grantee agencies shall be required to coordinate with other
low-income energy programs, and to demonstrate plans for using all
energy resources efficiently for maximum outreach to low-income
households.
   (D) Grantee agencies shall spend the maximum feasible amount of
California LIHEAP funds for weatherization assistance, but in no
event less than 50 percent of the funds available by grantee.  The
balance shall be used for cash assistance and energy crisis
intervention.  The department shall provide grantees with maximum
flexibility to use energy crisis and cash assistance funds to resolve
energy crisis for households and to serve the maximum number of
households.  Cash assistance payments may be used as a supplement to
federal LIHEAP cash assistance payments.
   (6) The department shall do the following in addition to
administering the program:
   (A) Explore, with grantee agencies, standards for determining
effective, efficient intake, and procedures to combine outreach for
federal, state, and utility low-income energy programs into a single
intake process.
   (B) Report to the policy and budget committees of the Legislature
on the extent to which increased flexibility in weatherization
measures and flexibility in cash assistance and crisis intervention
payments have increased service and reduced energy demand.  If
barriers to flexibility exist, the report should identify those
barriers.
   (C) Report to the policy and budget committees ot the Legislature
on the number of recipients of service, the number of grantees
providing service, categories of expenditure, estimated impact of
funds on energy demand, estimated unmet need, and plans for automated
reporting of this information routinely.
   (7) For any funds distributed in 2001, the department shall
distribute funds as follows:
   (A) Funds shall be distributed to have maximum possible impact on
reducing energy demand immediately.
   (B) First priority shall be to distribute funds through
community-based programs with whom it has existing contracts.
   (C) If additional capacity is needed beyond the existing network,
or if vulnerable populations cannot be served within the existing
contracts, the department may develop and RFP process to solicit
additional grantees.
   (8) The department shall limit administrative costs to not more
than 21/2 percent of the funds expended.  For the purposes of this
paragraph, "administrative costs" means personnel and overhead costs
associated with the implementation of each measure or program.
However, "administrative costs" does not include costs associated
with the marketing or evaluation of a measure or  program.
Fifteen million four hundred sixty thousand dollars ($15,460,000) to
the Department of Water Resources to establish the Energy and Water
Efficiency Program to assist local water purveyors and water users in
developing and implementing measures that conserve energy and water.
  program. 
   (i) Each state agency receiving funds appropriated pursuant to
this section shall ensure, where appropriate, not less than 85
percent of the funds shall be expended for direct rebates, purchases,
direct installations, buy-downs, loans, or other incentives that
will achieve reductions in peak electricity demand and improvements
in energy efficiency.
   (j) On or before January 1, 2002, each state agency receiving
funds appropriated pursuant to this section shall provide quarterly
reports to the Chairperson of the Joint Legislative Budget Committee,
to the chairpersons of the appropriate policy and fiscal committees
of both houses of the Legislature, and to the Governor, which include
all of the following information:
   (1) The amount of funding expended.
   (2) The measures, programs, or activities that were funded.
   (3) A description of the effectiveness of the measures, programs,
or activities funded in reducing peak electricity demand and
improving energy efficiency, as measured in kilowatthours of
electricity reduced per dollar expended.
   (k) To the extent that local government entities may apply for,
and receive funds pursuant to this section, and to the extend they
otherwise qualify for the funds, federally recognized California
Indian tribes may apply for funds appropriated pursuant to this
section on behalf of their tribal members, and the applications shall
be considered on their merits.  Each commission shall ensure that
its efforts to provide public information on programs funded pursuant
to this section shall include outreach to California Indian tribes.

  SEC. 6.  Any contracts entered into pursuant to Section 5 of this
act by a state agency are exempt from the following requirements of
the Government Code and the Public Contracts Code:  
   (a) Except for any contract entered into by the Department of
Consumer Affairs pursuant to subdivision (e) of Section 5 of this
act, services  
   (a) Services  contracts are exempt from Article 4 (commencing
with Section 10335) of Chapter 2 of Part 2 of Division 2 of the
Public Contract Code.
   (b) Consulting services contracts are exempt from Article 5
(commencing with Section 10359) of Chapter 2 of Part 2 of Division 2
of the Public Contract Code.
   (c) Architectural and engineering contracts are exempt from
Chapter 10 (commencing with Section 4525) of Division 5 of Title 1 of
the Government Code, and from  Sections 6106 and 6106.5 of the
Public Contract Code.
   (d) All contracts are exempt from Section 10295 of the Public
Contract Code, relating to approval from the Department of General
Services.
   (e) All contracts are exempt from Chapter 6 (commencing with
Section 14825) of Part 5.5 of Division 3 of Title 2 of the Government
Code, relating to advertising.
   (f) Grants may be awarded for projects or programs that include a
group of related projects, or to a party who aggregates projects that
directly benefit from the grant.  The grants do not constitute the
rendering of goods or services or a direct benefit to the agency
making the grant.
   (g) Contracts may be awarded pursuant to subdivision (c) of
Section 25555 of the Public Resources Code by choosing from among one
or more parties, or soliciting multiple applications from parties
capable of providing goods or services.  For purposes of this
section, Section 25555 of the Public Resources Code shall,
notwithstanding, any provision of law to the contrary, apply during
the period this section is effective, as set forth in Section 7 of
the act adding this section.  Contracts may be awarded to develop or
administer or both, portions of the program, including agency
delegation of the authority to implement the program.
   (h) The Public Utilities Commission and the Energy Commission may
each delegate approval of contracts and grants to the agency
executive director or an agency committee up to a maximum amount that
shall be established by the respective commission.
  SEC. 7.   Section 740.7 is added to the Public Utilities Code,
to read:
   740.7.  (a) Interruptible service or curtailment programs adopted
by the commission shall assure that the programs allow for
agricultural and water supplier customers to aggregate multiple
accounts to meet any minimum kilowatt requirements for participation
in the program.
   (b) As used in this section, "agricultural customers" means any
customer involved in the production of or processing of agricultural
products.  "Water suppliers" means those water agencies or suppliers
as defined in Section 20200 of the Water Code and Section 241 of the
Public Utilities Code.
  SEC. 8.  Section 740.9 is added to the Public Utilities Code, to
read:
   740.9.  (a) Any binding mandatory curtailment programs adopted by
the commission, which exempt customers from Stage III rotating
outages in exchange for partial load curtailments during every
rotating outage period, shall include the following for agricultural
and water supplier customers:
   (1) Provisions allowing for the use of backup generation to offset
the curtailed load under the program, to the extent such use of
backup generation is allowed under existing law.
   (2) Provisions limiting maximum daily curtailments to no more than
four hours and monthly curtailments to no more than 20 hours per
month.
   (b) As used in this section, "agricultural customers" means any
customer involved in the production of or processing of agricultural
products.  "Water suppliers" means those water agencies or suppliers
as defined in Section 20200 of the Water Code and Section 241 of the
Public Utilities Code.
  SEC. 9.  Section 740.10 is added to the Public Utilities Code, to
read:
   740.10.  (a) Each public utility electrical corporation shall
develop and offer its agricultural customers, including those
customers involved in the production or processing, or both, of
agricultural products, and water suppliers, on or before April 30,
2001, the opportunity to participate, in addition to other programs
developed by the commission, in a demand reduction program as
described in this section.
   (b) The program required by this subdivision shall be known as the
Scheduled Load Reduction Program, or SLRP.  Agricultural customers
and water suppliers may identify specific two-to-six hour periods
coincident with Independent System Operator-determined morning or
evening system peak conditions within which they agree to drop a
preset amount of load.  The commission shall develop appropriate
incentives to be paid for participation in the SLRP program.
   (c) As used in this section, "agricultural customers" means any
customer involved in the production of or processing of agricultural
products. "Water suppliers" means those water agencies or suppliers
as defined in Section 20200 of the Water Code and Section 241 of the
Public Resources Code.
  SEC. 10.  Section 740.11 is added to the Public Utilities Code to
read:
   740.11.  In recognition of the fact that these customers
necessarily have high electricity usage during peak summer demand
periods, the Legislature strongly urges that the commission consider
including all agricultural commodity processing customers in the
definition of customers eligible to be served under agricultural
tariffs, if the customer chooses.
  SEC. 11.   Sections 5 and 6 of this act shall remain in effect
only until January 1, 2005, and as of that date is repealed unless a
later enacted statute, that is enacted before January 1, 2005,
deletes or extends that date. Any funds appropriated under Section 5
of this act that are unencumbered by  January 1, 2005
  March 31, 2002  , shall revert to the General
Fund on that date  , except that funds appropriated pursuant to
paragraph (2) of subdivision (a) and subdivision (g) of Section 5 are
not subject to this reversion requirement  .  
  SEC. 8.   
  SEC. 12.   This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect.  The facts constituting the necessity are:
   Due to the shortage of electric generation capacity to meet the
needs of the people of this state and in order to limit further
impacts of this shortage on the public health, safety, and welfare,
it is necessary that this act take effect immediately.