BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB183
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          Date of Hearing:  June 30, 2003

                    ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
                                 Sarah Reyes, Chair
                      SB 183 (Sher) - As Amended:  June 27, 2003

           SENATE VOTE  :  35-1
           
          SUBJECT  :  Energy:  renewable technologies.

           SUMMARY  :  Makes substantive and non-substantive changes to the  
          provisions governing renewable energy programs.  Specifically,  
           this bill  :   

          1)Repeals two code sections in the Public Utilities Code  
            relating to the funding and administration of renewable energy  
            programs at the California Energy Commission (CEC) and recast  
            the same language in multiple code sections in the Public  
            Resources Code.

          2)Requires CEC to annually publish the balance of consumer  
            incentive programs funds available to emerging renewable  
            energy resources.

          3)Eliminates CEC discretion to award grants for the development  
            of new renewable electrical generation facilities to  
            out-of-state renewable electricity generators. 

          4)Eliminates a requirement that CEC obtain Legislative approval  
            before spending money collected and deposited in the Renewable  
            Resources Trust Fund  for renewable energy programs.

          5)Allows out-of-state renewable energy facilities to qualify as  
            eligible renewable energy resources for procurement under the  
            Renewable Portfolio Standard (RPS) if:

             a)   It will be connected to the Western Electricity  
               Coordinating Council transmission system, and 

             b)   It participates in a renewable energy certificate based  
               tracking system. 

           EXISTING LAW  :

          1)Imposes a separate rate component on utility bills to fund  








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            programs to promote, develop and operate renewable energy  
            resources. 

          2)Requires CEC to grant specified percentages of these funds to  
            these programs.

          3)Requires IOUs to buy renewable resources from statutorily  
            defined eligible renewable energy resources to increase their  
            existing level of renewable power by one percent per year with  
            twenty percent of their total portfolio coming from renewable  
            resources by 2017.

           FISCAL EFFECT  :  Unknown.


           COMMENTS  :   

          AB 1890 (Brulte), Chapter 854, Statutes of 1996, required  
          ratepayers to fund a variety of system reliability, in-state  
          benefit and low-income customer programs at specified levels  
          from 1998 through 2001.  This funding was intended to ensure  
          that programs administered by the investor owned utilities would  
          continue in the restructured electric industry. 

          Among these programs are grants to promote operation and  
          development of existing, new, and emerging renewable energy  
          sources.  The programs were original codified by SB 90 (Sher),  
          Chapter 905, Statutes of 1997 and were extended by SB 1194  
          (Sher), Chapter 1050, Statutes of 2000, and SB 1038 (Sher),  
          Chapter 515, Statutes of 2002.  Under the programs CEC  
          distributes grant and rebate money to develop renewable energy.

          The code section that creates these programs is unwieldy and  
          difficult to follow.  This bill recast this section as a series  
          of short sections that are easier to apply.

          The requirement in this bill that CEC publish the balance of the  
          funds available to use for consumer incentive programs is  
          intended to ensure that companies that provide renewable  
          technologies can keep tabs on the availability of funding.

          Under SB 1038, CEC is allowed to grant awards to out of state  
          renewable energy providers if those providers are under contract  
          to sell electricity to California utility customers.  This bill  
          eliminates that discretion out of concerns that California  








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          ratepayer money should not be used to subsidizes out of state  
          generators.

          SB 1078 (Sher), Chapter 516, Statutes of 2002 created the RPS,  
          requiring IOUs to buy renewable resources with the goal of  
          increasing their existing level of renewable resources by one  
          percent per year to achieved a twenty percent renewable  
          resources portfolio by 2017.  Under SB 1078 IOUs are required to  
          buy all qualifying renewable power from generation located  
          within California.  The prohibition against purchasing renewable  
          generation from out-of-state providers has raised concerns that  
          RPS may violate the Commerce Clause of the U.S. Constitution by  
          interfering with interstate commerce.  The provision to allow  
          out-of-state- renewable generation to count toward RPS standard  
          is intended to assure that RPS does not violate the U.S.  
          Constitution.

           Other Legislation
           
          This bill deletes a requirement that CEC obtain Legislative  
          approval before spending money in the Renewable Resources Trust  
          Fund.  Allowing CEC to make ongoing appropriations from this  
          fund eliminates an important oversight tool and reduces the  
          ability of the Legislature review CEC actions.   The Committee  
          may want to consider deleting this section  .
           
          Technical Amendments  

          In recasting existing codes into new sections, this bill  
          contains language requiring CEC to file a report to the  
          Legislature by March 31, 2003.   This report has already been  
          completed.  The committee and the author may wish to consider  
          deleting this outdated section.  


           REGISTERED SUPPORT / OPPOSITION  :

           Support 
           
          None on File.
           
            Opposition 
           
          Sempra Energy









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           Analysis Prepared by  :    Edward Randolph / U. & C. / (916)  
          319-2083