BILL ANALYSIS
Appropriations Committee Fiscal Summary
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| |1524(Sher) |
|-------------------------------+----------------------------|
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|Hearing Date: 5/13/02 |Amended: 4/30/02 |
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|Consultant: Lisa Matocq |Policy Vote: E, U & C |
| |8-0 |
| | |
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BILL SUMMARY: SB 1524 makes numerous changes to the
Renewable Energy Program (REP) and the Public Interest
Energy Research (PIER) Program, both of which are
administered by the California Energy Commission (CEC).
Fiscal Impact (in thousands)
Major Provisions 2002-03 2003-04
2004-05 Fund
REP program, including $135,000 annually, covered by surcharge
Special*
administration revenues
PIER program, including $62,500 annually, covered by surcharge
Special**
administration revenues
Evaluation Unknown, probably under $500. Costs
Special**
are covered by surcharge revenues.
*Renewable Resource Trust Fund
**Public Interest, Research, Development, and Demonstration Programs
Fund
STAFF COMMENTS: This bill may meet the criteria for
referral to the Suspense File as it provides the
legislative approval necessary for the CEC to expend
program funds.
Existing law requires the Public Utilities Commission to
require major electrical corporations to collect a public
goods charge on all electricity bills. The revenues are
used by the utilities to fund various programs including
the REP ($135 million) and PIER ($62.5 million) programs.
The REP program provides funding for the development of
renewable resources technologies. The PIER program
provides funding for energy research, development, and
demonstration projects in the public interest.
SB 1194 (Sher, Ch. 1050, St. of 2000) and AB 995 (Wright,
Ch. 1051, St. of 2000) extended the sunset on the
collection of the public goods charge until 2012 but
prohibited the expenditure of funds for the PIER and REP
programs without further legislative action. The CEC was
required to develop investment plans for these programs;
both plans have since been adopted by the PUC. This bill:
provides the legislative approval necessary for the CEC
to expend the PIER and REP program funds;
requires that an independent evaluation of the PIER
program be conducted;
SB 1524 (Sher)
Page Two
extends the sunset, from January 1, 2000 to January 1,
2007, on certain program criteria provisions of the PIER
program;
requires the major electrical corporations to spend,
during 2002-2011, specified levels of public goods
surcharge revenues on in-state operation of existing and
new and emerging renewable resources technologies, and
modifies the allocation of funds as follows:
Purpose/Allocation
Current law This bill
Improved renewables competitiveness 45%, up to
$243 million 20%
Develop renewables facilities 30%,
up to $162 million 50%
Develop emerging technologies 10%, up
to $54 million 17.5%
Renewables market promotion 15%, up to
$81 million 12.5%
100% 100%
authorizes the CEC to expend up to 1% of the REP funds,
potentially $1.35 million, for the costs associated with
implementing and administering a renewable portfolio
standard (RPS) if SB 532 (Sher), pending in Assembly
Utilities and Commerce Committee, is enacted. STAFF
RECOMMENDS that the bill be amended to either reduce one
of the above allocations by 1% to account for the RPS
authorized spending, or clarify which of the above
categories the 1% should come from.
Staff notes that (1) there is no requirement that the REP
program be evaluated, and (2) there is no cap on the CEC's
administrative costs, which are about 3.76%, or $5 million,
on the REP program, and 14.4%, or $9 million, on the PIER
program (apparently, a significant portion of the
administrative costs on the PIER program are for technical
support for research).
This bill is nearly identical to SB 530 (Sher), pending in
the Assembly Appropriations Committee. When SB 530 was
heard in this committee, it contained unrelated provisions.