BILL ANALYSIS
AB 808
Page 1
Date of Hearing: May 21, 2003
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Darrell Steinberg, Chair
AB 808 (Canciamilla) - As Amended: April 30, 2003
Policy Committee:
UtilitiesVote:11-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill establishes a state Energy Agency and requires the
governor to submit a reorganization plan for the agency.
Specifically, this bill:
1)Establishes the Energy Agency, with a cabinet-level Secretary
of Energy who is appointed by the governor and confirmed by
the Senate.
2)Requires the governor, by May 1, 2004, to submit to the Little
Hoover Commission a plan for reorganization of the state's
energy regulatory activities, and requires that a
reorganization plan be transmitted to the Legislature by July
1, 2004.
3)Requires the reorganization plan to:
a) Establish within the agency all major energy policy
making functions.
b) Merge the California Consumer Power and Conservation
Financing Authority (Power Authority) and the California
Energy Commission (CEC) into the new agency.
c) Eliminate the Electricity Oversight Board and the Power
Exchange.
d) Transfer to the agency all energy policy-making
functions currently performed by the Public Utilities
Commission (PUC).
e) Transfer to the agency all energy conservation programs
and oversight currently performed by PUC.
f) Establish a single board responsible for siting
electrical generation and transmission facilities and
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natural gas transmission facilities to coordinate with
agencies with environmental protection responsibilities.
4)Declares that the Energy Agency is responsible for planning,
developing and implementing all major aspects of state energy
policy to ensure an adequate, reasonably priced supply of
electricity and natural gas.
FISCAL EFFECT
1)One-time costs in the range of $200,000 for the Governor's
Office to prepare the reorganization plan.
2)Ongoing costs of around $1.5 million (General Fund and special
funds) for the agency level operations.
3)The net fiscal impact of reorganizing several state entities
under a new agency is unknown, but, to the extent it provides
consolidation and better coordination of current functions, it
should result in cost savings.
COMMENTS
1)Purpose . The author believes that the state's recent
experiences during the energy crisis brought to light a lack
of accountability by regulators, and also revealed
considerable inter-agency competition and functional
duplication that has tended to degrade the operations of the
state's energy regulatory programs.
2)What Others Have Said . In a report issued earlier this year
on the causes and policy options presented by the California
energy crisis, the Public Policy Institute of California
(PPIC) noted that state energy policy has lost its coherence
because the interrelated facets of energy policy are addressed
in so many separate forums. PPIC suggested that a
cabinet-level post be created in order to coordinate policy
and functions now that the worst of the energy crisis has
passed.
In it's Analysis of the 2002-03 Budget, Perspectives and Issues,
the Legislative Analyst's Office suggests that, given the
state's multiplicity of energy-related entities, and evidence
of certain duplicative activities and other problems, it is
time for the state to assess how these entities are organized
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and how they interact with one another.
3)Reorganization Process . Under existing law, the governor may
propose an executive branch reorganization plan, which becomes
effective 60 days after it has been submitted to the
Legislature unless either the Senate or the Assembly adopts,
by a majority vote, a resolution rejecting the plan. The
Little Hoover Commission has 30 days after the plan has been
submitted to the Legislature to report to the governor and the
Legislature its evaluation of the reorganization and any
recommendations for changes.
Current law contemplates enactment, in the following year, of
statutory language giving effect to the reorganization, but
the reorganization is effective regardless of whether any
follow-up statutes are enacted.
4)Prior Efforts . In 1995, Governor Wilson proposed a energy
reorganization plan similar to that contained in this bill.
That plan was defeated in the Senate by adoption of SR 30
(Alquist.)
AB 2062 (Pescetti, 2002), which would have established an
Energy Agency that included the regulatory powers and
jurisdiction of the PUC, and AB 2383 (Diaz, 2002), which
directed the Little Hoover Commission to study the
consolidation of existing energy-related agencies into a
cabinet-level department died in the Senate Energy Utilities
and Commerce Committee.
5)Energy Action Plan . The PUC, CEC, and Power Authority, in an
attempt to better coordinate the state's energy policy, have
recently developed an Energy Action Plan, the goal of which is
to, "Ensure that adequate, reliable, and reasonably-priced
electrical power and natural gas supplies, including prudent
reserves, are achieved and provided through policies,
strategies, and actions that are cost-effective and
environmentally sound for California's consumers and
taxpayers."
In their draft plan, the three agencies commit to active and
continued cooperation in discussing critical energy issues
jointly, sharing information and analysis, and bringing joint
policy recommendations to the Legislature and the governor.
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6)Opposition . The California Municipal Utilities Association
believes that AB 808 puts the cart before the horse,
maintaining that the state should first "come to grips" with
its fundamental energy policy issues before addressing
organizational concerns.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081