BILL ANALYSIS                                                                                                                                                                                                    




                    Appropriations Committee Fiscal Summary
          
                                           1478 (Sher)
          
          Hearing Date:  5/20/2004        Amended: 5/4/04        
          Consultant:  Lisa Matocq            Policy Vote: E, U & C  
          5-1                      
          ____________________________________________________________ 
          ___
          BILL SUMMARY:  SB 1478 makes numerous changes to the  
          California Renewables Portfolio Standard (RPS) Program and  
          the Renewable Energy Program (REP), as specified.  
          ____________________________________________________________ 

                          Fiscal Impact (in thousands)
           Major Provisions             2004-05        2005-06              
           2006-07                   Fund
           PUC              $85               $44                      
          $ 44                   Special*
                                          Costs should be offset by  
          fee revenues.                                           
          CEC                                   ------ No increased  
          costs ------                  Special**
          Customer credits                           See comments  
          below                        General                     
          *Public Utilities' Reimbursement Account (PURA)
          **Energy Resources Program Account or Renewable Resources  
          Trust Fund  
          ____________________________________________________________ 
          _
          
          STAFF COMMENTS: SUSPENSE FILE.   

          Current law establishes the RPS Program, which requires  
          investor-owned utilities (IOUs) to, among other things,  
          achieve a 20% renewable electricity portfolio by 2017.   
          This bill changes the deadline to 2010.  Existing law also  
          requires the California Energy Commission (CEC) to certify  
          eligible energy resources, and design a system to verify  
          compliance with the RPS. This bill requires the CEC to  
          establish a system for tracking renewable energy credits.  
          According to CEC staff, there are no increased costs as  
          this codifies current practice. 
           
          Current law also establishes the public goods charge, which  
          is a surcharge imposed on electricity bills to fund various  










          programs, including the REP. $135 million is collected  
          annually, of which 10%, or $13.5 million, is required to be  
          used for credits to customers that entered into a direct  
          transaction, by a specified date, for the purchase of  
          renewable electricity. It appears that the University of  
          California (UC) and/or California State University (CSU)  
          have received such credits. Direct access was suspended,  
          first by AB 1X (Keeley, Ch. 4, St. of 2001) and later by  
          the PUC. As a result, the CEC suspended the customer  
          credits program in 2003 and reallocated the funds to other  
          accounts/programs. This bill repeals the direct access  
          customer credits program. It is unknown whether the CEC  
          would have otherwise reinstated the program at some point  
          in the future, or whether UC or CSU would have been  
          eligible to receive credits.  

          The bill also requires the PUC to adopt related rules.  
          Increased costs to the PUC are about $85,000 in 2004-05,  
          and $44,000 annually thereafter.  PURA  revenues are  
          derived from an annual fee imposed on public utilities.   
          Therefore, any increased costs should be offset by  
          increased fee revenues.