BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 1685
                                                                  Page  1

          Date of Hearing:  May 8, 2003

                       ASSEMBLY COMMITTEE ON NATURAL RESOURCES
                             Hannah-Beth Jackson, Chair
                     AB 1685 (Leno) - As Amended:  April 24, 2003
           
          SUBJECT  :  Energy: self generation incentive program.

           SUMMARY  :  This bill extends the sunset on the existing Self  
          Generation Incentive Program within the California Public  
          Utilities Commission (CPUC) until January 1, 2006.

           EXISTING LAW  :

          1)Requires the CPUC to develop an incentive program to encourage  
            customers of investor-owned utilities to install distributed  
            generation that operates on renewable fuel or contributes to  
            system reliability.

          2)Establishes the Self Generation Incentive Program (Program) to  
            provides incentives for the customers of Pacific Gas &  
            Electric (PG&E), Southern California Edison (Edison), San  
            Diego Gas & Electric (SDG&E), and Southern California Gas  
            Company (SoCalGas) to install photovoltaics, wind turbines,  
            fuel cells, microturbines, small gas turbines, and internal  
            combustion engines to provide some or all of their electricity  
            for onsite use.  

          3)Through the California Energy Commission (CEC), provides the  
            Emerging Renewables Program that provides rebates to consumers  
            who install qualifying renewable energy systems.

           THIS BILL  extends the sunset on the Program until 2006.

           FISCAL EFFECT  :  Unknown

           COMMENTS  :

           1)Background  

          According to the author's office, this bill re-authorizes a very  
          successful program that would otherwise expire at the end of  
          2004.  California has everything to gain from the continued  
          growth of solar and other renewable energy technologies.  The  
          benefits are vast and include clean air, new jobs, and increased  








                                                                  AB 1685
                                                                  Page  2

          energy independence.

          Assembly Bill 970 (Ducheny), Chapter 329, Statutes of 2000,  
          required the CPUC to initiate certain load control and  
          distributed generation activities, including providing financial  
          incentives.  The Program provides incentives for customers of  
          PG&E, Edison, SDG&E, and SoCalGas, to install photovoltaics,  
          wind turbines, fuel cells, microturbines, small gas turbines,  
          and internal, combustion engines to provide some or all of their  
          electricity for onsite use.  Greater Incentives are provided for  
          generation using renewable fuel.  No incentives are provided for  
          diesel-powered or back-up generation.  

          The Program provides incentive funding to renewable and  
          non-renewable self-generation units up to 1 Megawatt (MW) in  
          size.  PG&E, Edison, SoCalGas, and the San Diego Regional Energy  
          Office (serving SDG&E customers) administer the program  
          throughout their respective service territories.

          According to the author's office, this Program has a record of  
          positive results.  This bill extends the sunset on the Program  
          until January 1, 2006.

           2)Assembly Utilities and Commerce Committee Amendment  

          The Assembly Utilities and Commerce Committee heard this bill on  
          April 21, 2003.  In committee, the author accepted an amendment  
          to change the sunset date on the bill to 2008.  That Committee  
          passed the bill as amended.  However, the set of committee  
          amendments that changed the final sunset date of the program was  
          incorrect.  To correct the date of the sunset in the bill, the  
          Committee may wish to consider the following amendment:

          On page 2, line 26, delete "2006" and insert " 2008"  .

           REGISTERED SUPPORT / OPPOSITION  :

           Support 
           
          California Solar Energy Industries Association
          RealEnergy
          Sacramento Municipal Utilities District

           Opposition 
           








                                                                  AB 1685
                                                                  Page  3

          None on file

           
          Analysis Prepared by  :  Kyra Emanuels Ross / NAT. RES. / (916)  
          319-2092