BILL ANALYSIS                                                                                                                                                                                                              1
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                SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
                               DEBRA BOWEN, CHAIRWOMAN
          

          SB 1565 -  Bowen                                  Hearing Date:   
          March 23, 2004        S
          As Introduced:             February 19, 2004      FISCAL       B

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                                      DESCRIPTION
           
           This bill  requires the California Energy Commission (CEC) to  
          adopt a strategic plan for investments in the state's electric  
          transmission grid.

                                      BACKGROUND
           
          Like the state's highway and water systems, improvements to the  
          electric transmission system are critical to ease existing  
          congestion, meet growth in demand, ensure reliable delivery of  
          existing resources, and accommodate delivery of new resources.

          According to the CEC's 2003 Integrated Energy Policy Report  
          (IEPR), "(t)he state's bulk transmission system needs major  
          upgrades and improvements.  The broken transmission permitting  
          process in the state must be fixed so that needed transmission  
          investments can move forward."

          In spite of the recognition of the CEC and other observers that  
          the public would benefit from new investments in the  
          transmission grid, little progress has been made in implementing  
          major transmission improvements in many years.  Electric  
          restructuring has complicated the question of who's responsible  
          for transmission planning, who should pay for transmission  
          improvements, and who will benefit.

          The Independent System Operator (ISO) plans for and recommends  
          transmission projects within its control area, but the  
          responsibility for building lies with the transmission-owning  
          utilities, who must initiate projects and obtain approval from  
          the California Public Utilities Commission (CPUC).  A  
          significant share of the state's transmission grid is publicly  
          owned and outside the jurisdiction of the ISO or the CPUC.  No  








          state agency is charged specifically with planning for the  
          future of the transmission system as a whole.

          According to the author, the state is suffering from a lack of  
          direction on electric transmission infrastructure.   
          Notwithstanding the fact that most of the state's transmission  
          grid is now supposed to operate as an integrated system,  
          responsibility from planning and permitting transmission  
          projects is divided between a multitude of federal, state and  
          local agencies, as well as private corporations, who either own  
          or manage pieces of the grid.  The author believes the CEC is  
          the most appropriate entity to examine these issues, reconcile  
          the concerns of the various players, and recommend a path  
          forward to the Legislature.








































                                       COMMENTS
           
           Report should be consolidated within the IEPR process and given  
          a due date.   The CEC's significant planning and reporting duties  
          were consolidated into the biennial IEPR by SB 1389 (Bowen),  
          Chapter 568, Statutes of 2002.   The author and the committee may  
          wish to consider  whether this bill should specify that the plan  
          it requires be incorporated into the next IEPR, which is due for  
          adoption November 1, 2005.

                                       POSITIONS
           
           Sponsor:
           
          Author

           Support:
           
          None on file

           Oppose:
           
          None on file




















          












          Lawrence Lingbloom 
          SB 1565 Analysis
          Hearing Date:  March 23, 2004