BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 1685
                                                                  Page  1

          Date of Hearing:   May 21, 2003

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                              Darrell Steinberg, Chair

                     AB 1685 (Leno) - As Amended:  May 13, 2003 

          Policy Committee:                               
          UtilitiesVote:11-0
                        Natural Resouces                        9-1

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:               

           SUMMARY  

          This bill establishes a statutory sunset date of January 1, 2008  
          on the Public Utilities Commission's (PUC's) Self Generation  
          Incentive Program, which currently has an administrative sunset  
          date of January 1, 2004. 

           FISCAL EFFECT  

          1)Continues for three more years the annual $125 million in  
            financial incentives provided by the utilities for the  
            program.

          2)Minor absorbable costs for the PUC to continue oversight of  
            the program for three years. 

           COMMENTS  

           Background and Purpose  .  AB 970 (Ducheny)-Chapter 329, Statutes  
          of 2000, required the PUC to initiate certain load control and  
          distributed generation activities, including providing financial  
          incentives.  A March 2001 PUC decision authorized the  
          Self-Generation Incentive Program, which provides a financial  
          incentive to customers installing new, qualifying  
          self-generation equipment to meet all or a portion of their  
          electric energy needs.  Through this program, the investor-owned  
          utilities (IOUs) provide incentive funding to renewable and  
          non-renewable self-generation units up to one megawatt.  The  
          IOUs administer the program throughout their respective service  
          territories.  In approving the program, the PUC administratively  
          placed a 2004 sunset date in order to evaluate the program  








                                                                  AB 1685
                                                                  Page  2

          results.  This bill statutorily ensures that the program will  
          continue through 2007.

           Analysis Prepared by  :    Chuck Nicol / APPR. / (916) 319-2081