BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 2593
                                                                  Page  1

          Date of Hearing:   April 28, 2004

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                   Judy Chu, Chair

                  AB 2593 (Calderon) - As Amended:  April 19, 2004 

          Policy Committee:                               
          UtilitiesVote:12-0

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:               

           SUMMARY  

          This bill allows the Public Utilities Commission (PUC), if it  
          determines that funds available for the Self-Generation  
          Incentive Program (SGIP) are sufficient to meet the year's  
          program demands, to suspend for a year the utility surcharge  
          collection for the program.  This would apply to PG&E and  
          Southern California Edison (SCE), but not to San Diego Gas &  
          Electric, at that company's request.

           FISCAL EFFECT  

          Potential minor absorbable costs to the PUC.

           COMMENTS  

           1)Background  . 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  
            SGIP, 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 three investor-owned utilities (IOUs) provide  
            incentive funding (a total of $125 million annually) 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 results. AB 1685 (Leno)-Chapter  
            894/Statutes of 2003, statutorily extended the program sunset  
            until January 2008.








                                                                  AB 2593
                                                                  Page  2


           2)Purpose  .  This bill is sponsored by SCE, which indicates that  
            the total amount of incentives it has paid to eligible  
            participants since the program's inception is approximately  
            $15 million, even though a total of $104 million has been  
            collected for incentives. SCE indicates that it expects to  
            approve over 60 additional projects with incentives totaling  
            about $30 million, leaving a year-end balance of $60 million  
            for 2004. To reduce the program's impact on ratepayers, Edison  
            argues that the SGIP should be funded, and the surcharge  
            collected, based on a forecasted need. AB 2593 will provide  
            that option pursuant to a determination by the PUC.

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