BILL ANALYSIS                                                                                                                                                                                                    




                    Appropriations Committee Fiscal Summary
          
                                           1269 (Peace)
          
          Hearing Date:  6/3/02           Amended: 5/24/02       
          Consultant:  Lisa Matocq            Policy Vote: E, U & C  
          5-1                      
          ____________________________________________________________ 
          ___
          BILL SUMMARY:  SB 1269 makes changes to statutes relating  
          to power plant construction and certification by the  
          California Energy Commission (CEC).
           
                              Fiscal Impact (in thousands)
           
          Major Provisions                 2002-03           2003-04              
           2004-05               Fund  
          
          CEC                                              Probably minor  
          costs                           General
          Power Authority                  Potential unknown cost pressures     
                       Special*

          *California Consumer Power and Conservation Financing Authority Fund
          
          STAFF COMMENTS:   Under current law, the CEC is authorized  
          to issue siting certifications to thermal power plants 50  
          megawatts or larger, and to revoke a certification under  
          certain circumstances. 

          SB 6x (Burton, Ch. 10, St. of 2001) authorized the creation  
          of the California Consumer Power and Conservation Financing  
          Authority (Power Authonbrity) to ensure an adequate and  
          reliable electricity supply.  The Power Authority is  
          authorized to, among other things, acquire, finance,  
          construct, and operate power plants.  This bill, among  
          other things:

           requires a power plant project owner to commence  
            construction within 12 months of CEC certification, and  
            requires the CEC to revoke a certification for failure to  
            do so, except in certain circumstances, 
           requires the CEC to impose penalties if certain other  
            conditions are not met,  
           requires the CEC to notify the Power Authority of a  
            revocation decision, and requires the Power Authority to  










            consider completing the project.  

          There are unknown, but potentially significant cost  
          pressures to the Power Authority.  The costs of evaluating  
          a project where the CEC has revoked the certification could  
          be $50,000+.  If the Power Authority elects to pursue the  
          project, costs could be in the range of $2 million to $250  
          million+, depending on the project and whether the takeover  
          involves construction only, construction and operation, or  
          operation only.  The cost of constructing a 500-megawatt  
          power plant is about $250 million+.  Presumably, these  
          costs would be recovered through rates, sale of the plant,  
          or bond proceeds.   

          SB 86xx (Peace) of 2001 was similar to this bill and died  
          in the Assembly when the special session ended.