BILL ANALYSIS
SB 5 X1
Page 1
( Without Reference to File )
SENATE THIRD READING
SB 5 X1 (Sher)
As Amended April 4, 2001
2/3 vote. Urgency
SENATE VOTE :28-10
ENERGY 16-1 APPROPRIATIONS 14-0
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|Ayes:|Wright, Canciamilla, |Ayes:|Migden, Daucher, Aroner, |
| |Diaz, Dutra, Goldberg, | |Cedillo, Keeley, Correa, |
| |Jackson, Keeley, Leonard, | |Goldberg, Maldonado, |
| |Migden, Oropeza, Reyes, | |Papan, Shelley, Simitian |
| |Richman, Steinberg, | |Wesson, Wiggins, Wright |
| |Vargas, Shelley, Zettel | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|John Campbell | | |
| | | | |
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SUMMARY : Provides a total of $710.3 million from the General
Fund (GF) to implement energy efficiency programs and supplement
existing energy efficiency programs. Specifically this bill :
1)Allocates funds to the California Public Utilities Commission
(CPUC), California Energy Commission (CEC), Department of
Consumer Affairs (DCA), Department of General Services (DGS),
Department of Community Services and Development (DCSD), and
Department of Water Resources (DWR). Among the programs and
funding specified are:
a) $100 million in new money to supplement the existing
California Alternate Rates for Energy (CARE) program, a
CPUC administered program that provides a discount on gas
and electric bills for low-income customers, allowing up to
20% of the funds to be used for outreach to increase
enrollment;
b) $20 million for CPUC to fund weatherization programs for
low-income customers;
c) $60 million to DCSD for low-income assistance and $60
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million to expand low-income energy weatherization
programs;
d) Incentives to encourage the purchase of high efficiency
appliances to investor-owned utility (IOU) customers
through CPUC and to municipal utility district (MUD)
customers through CEC;
e) Incentives to encourage the purchase of whole-house and
indoor fans and construction of high-efficiency residences
to IOU customers through CPUC and to MUD customers through
CEC;
f) Incentives to encourage the use of high-efficiency
lighting in commercial and residential buildings to IOU
customers through CPUC and to MUD customers through CEC;
g) $10 million to encourage the purchase of advanced
telemetry equipment for agricultural and water pumping
customers to improve load management and demand
responsiveness; and,
h) $75 million to implement programs to reduce peak load
electricity usage, encourage bio-gas digestion power
production technologies, enhance conservation and encourage
use of alternative fuels through rebates and grants
available through CEC to agricultural customers.
1)Provides that any funds not encumbered [except for CARE
program funds and Low Income Home Energy Assistance Program
(LIHEAP) funds] by March 31, 2002 shall revert to the GF.
EXISTING LAW :
1)Provides for energy efficiency programs administered by CPUC
and CEC.
2)Establishes the CARE program for reduced rate electric and gas
service to low-income customers.
FISCAL EFFECT : Allocates $710.3 million from the GF.
COMMENTS : This bill provides for expansion of the existing
low-income programs, including the weatherization programs, and
for implementation of significant energy efficiency programs to
SB 5 X1
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reduce peak demand.
Current law establishes a low-income energy assistance program
for electric and natural gas service customers of IOUs known as
CARE which is funded by a surcharge on energy bills. The CARE
program includes both discounts on the electric and natural gas
bill, as well as a residential weatherization program.
Current regulations limit CARE eligibility to those households
earning less than 175% of the federal poverty level. The CARE
discount, which is established by CPUC, is 15% of a family's
monthly electric or natural gas bill. The cost to ratepayers
for the CARE program is about $180 million annually, and that
cost will expand as the program enrollment expands. The
percentage of eligible customers who participate in the CARE
program varies widely throughout the state. In Pacific Gas &
Electric's service area, 36% of eligible customers participate,
while in Southern California Edison's service area, 59% of those
eligible are participating. This bill's provisions enhance the
program both with regard to funding generally and through
expansion of the existing weatherization component.
This bill appropriates $120 million to DCSD specifically to
increase energy conservation and reduce demand for energy within
this program, assist customers in coping with high energy costs
and provide for weatherization services and cash assistance
payments.
Eligibility for California LIHEAP is to include households with
incomes not exceeding the greater of 60% of the state median
income or 80% of the county median income. Under this bill's
specification DCSD is to provide both direct rate assistance and
expanded funding for low-income weatherization, The program
shall establish reasonable spending limits, including up to 15%
for outreach and training for consumers. Weatherization
programs shall account for not less than 50% of program funds
and shall maximize cash assistance programs by allowing funds to
be used as a supplement to federal LIHEAP payments.
Investments in energy efficiency programs have proven to be very
cost-effective. In May 2000, CPUC reported that in 1999, it
spent $242 million in energy efficiency programs to save 825
million kilowatt hours of electricity and 15 million therms of
gas, making the programs far cheaper than buying additional
energy. This bill has a specific set aside amount to augment
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the existing CARE program funding for energy efficiency as well
as proposals to provide for widespread enhanced energy
efficiency in the state.
This bill provides for significant program accountability.
Under its proposed state energy projects, these terms include
contracting through DGS for projects considering qualifications,
experience, type of technology employed, cost to the agency and
selection from a pool of qualified energy service providers.
All of the programs proposed through each of the agencies
specified seem to be tailored to specific demand reduction
levels and expectations and this bill provides the agencies with
flexibility to shift funds between programs to achieve "maximum
feasible energy conservation." This bill also employs tracking
and auditing procedures which should ensure that program funds
are expended prudently and which should provide for accounting
of actual energy savings accrued.
This bill contains other miscellaneous provisions for various
departments to achieve more energy efficiency. This bill also
contains provisions to enhance energy efficiency among
agricultural customers, who necessarily use electricity during
peak demand periods.
Analysis Prepared by : Kelly Boyd / E. C. & A. / (916)
319-2083
FN: 0000270