BILL ANALYSIS
Appropriations Committee Fiscal Summary
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| |5(Sher) |
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|Hearing Date: 2/21/01 |Amended: 2/20/01 |
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|Consultant: Lisa Matocq |Policy Vote: E, U & C |
| |7-0 |
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BILL SUMMARY: SB 5X, an urgency bill:
appropriates $1.02 billion to various state agencies (to
be allocated per the attached schedule) in order to
reduce peak electricity demand by at least 2,585
megawatts, to expand low-income energy assistance
programs, and encourage energy efficiency, as specified.
These provisions of the bill sunset January 1, 2005.
until June 30, 2003, authorizes state agencies, subject
to approval of the Directors of General Services and
Finance, to develop energy conservation and efficiency
projects, as specified.
Fiscal Impact (in thousands)
Major Provisions 2000-01 2001-02
2002-03 Fund
Appropriation $1,011,500* --
-- General
Dept. of Transportation
appropriation $ 15,000* --
-- Special**
Energy Commission
personnel Included $ 2,000
$ 2,000 General
Energy cost savings
---------------------Unknown--------------- Various
*Appropriated in the bill.
**State Highway Account.
STAFF COMMENTS: This bill:
defines "state energy projects" as (1) equipment, load
management techniques, and other measures/services which
reduce energy consumption and provide for more efficient
use of energy, or (2) clean renewable distributed
generation equipment for use in state buildings or
facilities,
provides that state energy projects may be exempted from
the capital outlay process, and advertising and
competitive bidding requirements, as specified,
requires the Energy Commission (EC) to adopt efficiency
standards for outdoor lighting, as specified,
requires the Public Utilities Commission (PUC) and the EC
to (1) develop cost-effectiveness criteria for the
programs funded, (2) establish limitations on
administrative costs to "ensure that the maximum feasible
amount of funds are used for direct and measurable energy
conservation, peak load reduction, and energy efficiency
by the earliest date", (3) establish matching criteria,
(4) within six months, contract for an audit of
expenditures and their effectiveness in achieving a
reduction in peak energy demand,
authorizes the PUC and Energy Commission to shift funds
among program categories in order to achieve the purposes
of the bill,
provides that any funds unencumbered by January 1, 2005
shall revert to the General Fund, and
makes related changes.
According to the author's staff, the appropriations are
intended to be one-time.
AB 970 (Ducheny, Ch. 329, St. of 2000), among other things,
appropriated $50 million to the Energy Commission to
implement energy conservation programs. Apparently those
funds have been depleted. This bill significantly expands
some of the programs established by AB 970 and creates new
ones. STAFF NOTES that (1) it is unclear what criteria was
used to select the programs to be funded by this bill, (2)
the language of the bill regarding the how funds are to be
expended and for what purpose is broad, (3) it is unclear
why some allocations are tied to specific peak demand
reductions (# of megawatts) and some are not, and (4)
although the PUC and the EC would be required to report to
the Legislature, there is no single agency or entity
responsible for collectively reporting the effectiveness of
the programs in reducing peak demand by 2,585 megawatts.
To the extent that the programs are successful in reducing
peak electricity demand of state agencies, there are
unknown energy cost savings.
STAFF RECOMMENDS AMENDMENTS TO:
(1)reduce the amount of the appropriation/allocations to
first-year funding only and provide that subsequent years
be funded in the annual Budget Act,
(2)specify the recipient of the $50 million appropriation
on page 17, lines 34-38, and define "energy efficient
programs",
(3)require that at least 85% of the moneys, where
appropriate, be used for measures that directly reduce
megawatt usage,
(4)require the PUC and the EC to provide a copy of the
cost-effectiveness criteria established, pursuant to the
bill, to the Legislature and the Governor within ten days
of development,
(5)require the PUC and the EC to submit the audits to the
Legislature and the Governor not later than one year
after the effective date of this bill,
(6)cap administrative costs at not more than 2 1/2% of the
amounts appropriated,
(7)on page 6, line 26, strike "and may be funded through
any authorized" and strike line 27,
(8)include a due date for the Department of Corrections to
report to the Legislature and the Governor, and
(9)require each state agency receiving funds to report
annually to the Legislature and the Governor, on
expenditures, activities, and the effectiveness of such
expenditures in achieving the specified goals of the
bill.
SB5X (Sher) Appropriation Breakdown
(1)$353 million to the PUC in order to reduce peak electricity
demand and meet urgent needs of low-income households, to be
allocated to electric and gas electrical corporations as follows:
(a) Residential
high-efficiency HVAC and appliances $ 66,000,000
(b) CARE (low-income) program
expansion 100,000,000
(c) Weatherization for
low-income households
20,000,000
(d) Pump/motor retrofits for
oil/gas producers
20,000,000
(e) High-efficiency lighting 100,000,000
(f) Demand-responsive
and energy efficient technologies in
buildings owned or operated by cities or counties
15,000,000
(g) High-efficiency
nonresidential buildings construction
32,000,000
PUC TOTAL $353,000,000
(1)$404.5 million to the Energy Commission in order to reduce peak
electricity demand, to be allocated as follows:
(a) $27 million to locally owned public utilities for the
following:
(1) Residential high-efficiency air conditioning and
appliances $ 20,200,000
(2) High-efficiency lighting in commercial buildings
6,800,000
(a) Improve demand-responsiveness in HVAC, lighting, and
70,000,000
advanced metering of energy usage
(c) Lower air conditioning usage in schools, hospitals, etc.
50,000,000
(d) Third party peak demand reduction in public utilities'
service
areas
60,000,000
(e) Reduce peak load in agricultural sector
50,000,000
(f) Light-emitting diode (LED) traffic signals
14,500,000
(g) Reduce peak usage of water/wastewater treatment systems
64,000,000
(h) Demand-responsiveness and energy-efficient technologies
in buildings owned or operated by cities or counties
15,000,000
(i) Teach school children about energy efficiency
7,000,000
(j) Retrofit distributed generation of municipal water
districts,
as specified
20,000,000
(k) Fund 16 personnel years
1,400,000
(l) Fund four personnel years to provide accurate and timely
assessments of electricity and natural gas markets
600,000
(m) Loans to schools for energy conservation measures
25,000,000
EC TOTAL $404,500,000
(1) $10 million to the Department of Consumer Affairs for
a public awareness campaign to reduce demand $ 10,000,000
(2) $24 million to the Department of Corrections to retrofit
generation units to improve environmental performance $ 24,000,000
(3) $50 million to the Department of General Services to$
50,000,000
implement state energy projects, as specified
(4) $120 million to the Department of Community
Services$120,000,000
and Development to supplement or expand the Low Income
Home Energy Assistance Program
(5)$50 million to _____ to reduce demand by 120 megawatts,
for energy efficiency programs in state buildings and community
colleges $ 50,000,000
(6)$15 million to the Department of Transportation from the
State Highway Account to initiate energy audits and conservation
projects $ 15,000,000
OTHER TOTAL $269,000,000
TOTAL
$1,026,500,000