BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 1524|
|Office of Senate Floor Analyses | |
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THIRD READING
Bill No: SB 1524
Author: Sher (D), et al
Amended: 4/30/02
Vote: 21
SENATE ENERGY, U.&C. COMMITTEE : 8-0, 4/23/02
AYES: Bowen, Morrow, Alarcon, Battin, Murray, Sher,
Speier, Vincent
SENATE APPROPRIATIONS COMMITTEE : 13-0, 5/23/02
AYES: Alpert, Battin, Bowen, Burton, Escutia, Johannessen,
Johnson, Karnette, McPherson, Murray, Perata, Poochigian,
Speier
SUBJECT : Renewable energy
SOURCE : California Energy Commission
DIGEST : This bil l authorizes the continuation of the
ratepayer-funded and California Energy Commission (CEC)
administered Renewable Energy Program and Public Interest
Energy Research (PIER) Program for five years pursuant to
the CEC's investment plans for these programs.
ANALYSIS : AB 1890 (Brulte), Chapter 854, Statutes of
1996, required ratepayers to fund a variety of system
reliability, in-state benefit and low-income customer
programs at specified levels from 1998 through 2001. This
funding was intended to ensure that these "public goods"
programs continued (at least in the short term) in the
restructured electric industry.
CONTINUED
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Among the public goods programs are (1) public interest
research, development and demonstration and (2) in-state
operation and development of existing, new, and emerging
renewable energy sources. Prior to expending any of the
funds collected from ratepayers, the CEC was required to
submit a report to the Legislature describing the programs
it would support and the levels of support they would
receive. This original CEC investment plan was codified by
SB 90 (Sher), Chapter 905, Statutes of 1997.
SB 1194 (Sher), Chapter 1050, Statutes of 2000, extended
the collection of a public goods charge from ratepayers
until 2012 and again required the CEC to develop investment
plans for renewable energy and public interest research,
development, and demonstration.
For renewable energy, the CEC was required to submit an
initial investment plan by March 31, 2002, addressing the
application of funds collected between January 1, 2002, and
January 1, 2007. A subsequent investment plan is due March
31, 2006, relating to the application of funds collected
between January 1, 2007, and January 1, 2012. The CEC
adopted its 2002-2006 investment plan for renewable energy
in June 2001. IOU ratepayers contribute $135 million
annually to this program.
For public interest research, development and
demonstration, the CEC was required to submit an initial
investment plan by March 1, 2001, addressing the
application of funds collected between January 1, 2002, and
January 1, 2007. A subsequent investment plan is due March
31, 2006, relating to the application of funds collected
between January 1, 2007, and January 1, 2012. The CEC
adopted its 2002-2006 investment plan for PIER in March
2001. IOU ratepayers contribute $62.5 million annually to
this program.
No funds may be expended in the years covered by these
plans without further legislative action. While the public
goods charge is still being collected, the CEC's authority
to fund the programs that it supports has expired.
According to the CEC, payments to renewable generators for
generation occurring in 2002 have been suspended and
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solicitations for new PIER projects have been suspended.
Neither can resume until legislation is enacted. This bill
provides the necessary authorization to continue these
programs.
This bill:
1.Provides the legislative approval necessary for the CEC
to expand the PIER and REP program funds.
2.Requires that an independent evaluation of the PIER
program be conducted.
3.Extends the sunset, from January 1, 2000 to January 1,
2007, on certain program criteria provisions of the PIER
program.
4.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 emerging renewable resources technologies, and
modifies the allocation of funds, as follows:
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| Purpose/Allocation | Current Law | This Bill |
| | | |
|--------------------------+--------------------+------------|
|Improved renewables | 45%, up to $243 | |
|competitiveness |million |20% |
| | | |
|--------------------------+--------------------+------------|
|Develop renewables | 30%, up to $162 | |
|facilities |million |50% |
| | | |
|--------------------------+--------------------+------------|
|Develop emerging | 10%, up to $54 | 17.5% |
|technologies |million | |
| | | |
|--------------------------+--------------------+------------|
|Renewables market | 15%, up to $18 | 12.5% |
|promotion` |million | |
|--------------------------+--------------------+------------|
| |100% | |
| | |100% |
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| | | |
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5.Authorizes the CEC to expend up to one percent 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.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
Fiscal Impact (in thousands)
Major Provisions 2002-03 2003-04
2004-05 Fund
Evaluation Unknown, probably under
$500. Special*
Costs are covered
by surcharge
revenues.
*Public Interest, Research, Development, and Demonstration
Programs Fund
SUPPORT : (Verified 5/23/02)
California Energy Commission (source)
NC:cm 5/24/02 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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