BILL ANALYSIS                                                                                                                                                                                                    




                    Appropriations Committee Fiscal Summary
          
                                           107 (Bowen)
          
          Hearing Date:  5/19/03          Amended: 5/5/03        
          Consultant:  Lisa Matocq            Policy Vote: E, U & C  
          8-0                      
          ____________________________________________________________ 
          ___
          BILL SUMMARY:  SB 107, an urgency measure, extends and  
          modifies the Self-Generation Incentive Program (SGIP),  
          within the Public Utilities Commission (PUC). 

                              Fiscal Impact (in thousands)
           Major Provisions                 2003-04          2004-05              
           2005-06               Fund  
          
          PUC                              --              Probably under $120  
          and        Special*
                                                           offset by fee  
          revenues
          *Utilities' Reimbursement Account
          
          STAFF COMMENTS: The SGIP was established in 2001, and is  
          expected to allocate $125 million per year in financial  
          incentives and program administration through 2004.  The  
          revenues are derived from a distribution charge imposed on  
          utility bills.  The investor-owned utilities administer the  
          program throughout their respective territories, subject to  
          PUC oversight.  Incentives are available for the  
          installation of  photo-voltaics, wind turbines, fuel cells,  
          and other specified resources.  For the six months  
          July-December 2001, 129 applications had been received by  
          the utilities. 

          This bill modifies an existing requirement that the PUC  
          offer incentives for renewable or super clean distributed  
          generation, by instead requiring that they offer incentives  
          for ultra-clean and low-emission distributed generation.  
          Current law defines ultra-clean and low-emission as any  
          electric generation technology that (1) commences initial  
          operation by December 31, 2005, and (2) produces zero  
          emissions or emissions equal to or less than the 2007 Air  
          Resources Board emission limits for distributed generation.  
           Super clean is not defined. This change potentially  
          reduces the pool of applicants eligible to receive the  










          incentive.

          Recent amendments (1) include a January 1, 2007 sunset on  
          the program (there is no sunset under current law), (2)  
          require that the extended program be modified, as  
          specified, and (3) require the PUC to submit a report to  
          the Legislature, by January 1, 2006, on the incentive  
          program.   Increased costs to the PUC are probably under  
          $120,000 for the report and program administration 2004-05  
          through 2006-07.  URA revenues are derived from an annual  
          fee imposed on utilities.  Therefore, any increased costs  
          to the PUC should be recovered through fee revenues.