BILL ANALYSIS
SB 1037
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Date of Hearing: June 27, 2005
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Lloyd E. Levine, Chair
SB 1037 (Kehoe) - As Amended: June 21, 2005
SENATE VOTE : 26-14
SUBJECT : Energy Efficiency.
SUMMARY : Requires electric utilities, municipal utilities
(munis), and the Public Utilities Commission (PUC) to make
energy efficiency programs a priority before acquiring other
sources of electricity or building new transmission lines.
Specifically, this bill :
1)Requires the PUC to require gas and electric utilities, in
procuring energy, to first acquire all available energy
efficiency and demand reduction recourses that are
cost-effective, reliable, and feasible (before conventional
generation or other resources), as specified.
2)Requires the PUC, in considering an application for a
certificate of public convenience and necessity for an
electric transmission line, to consider all cost-effective
alternatives that would meet the need, as specified.
3)Requires munis, in procuring energy, to first acquire all
available energy efficiency and demand reduction recourses
that are cost-effective, reliable, and feasible (before
conventional generation or other resources), as specified.
4)Requires munis to annually report to its customers and to the
California Energy Commission (CEC) its investments in energy
efficiency and demand reduction programs.
EXISTING LAW
1)Establishes and funds various energy efficiency programs for
public and private electric and gas utilities.
2)Prohibits the use of energy efficiency funds for the purchase
of energy-efficient refrigerators.
SB 1037
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3)Requires each investor-owned electric utility to purchase
energy according to a procurement plan, subject to PUC
approval.
FISCAL EFFECT : Unknown.
COMMENTS : According to the author's office the purpose of this
bill is to codify recent PUC decisions requiring electricity
companies to make energy efficiency measures their first
priority in planning to meet new demands.
1) Codification of current rules : California's energy agencies,
including the PUC, have adopted an "Energy Action Plan" (EAP)
which includes a "loading order" for the acquisition of new
resources. The loading order prioritizes energy efficiency by
stating that energy needs should first be met by energy
efficiency and demand reduction programs before a utility
procures new electricity from renewable resources or fossil fuel
fired generating facilities. Energy efficiency measures are
generally considered some of the most cost effective ways of
meeting California's growing energy needs, since it is generally
less expensive to conserve electricity than it is to build new
power plants to meet demand.
The EAP and its loading order have no force of law and merely
state the planning preferences of the state's energy agencies.
However, elements of the EAP, including the loading order, have
been incorporated into PUC decisions governing the
privately-owned utilities it regulates. The EAP has not been
adopted by, and is not directly enforceable upon, publicly-owned
utilities. Publicly-owned utilities are subject to state law,
but are not subject to PUC jurisdiction. Instead, they are
public agencies governed by local elected officials.
REGISTERED SUPPORT / OPPOSITION :
Support
Natural Resources Defense Council (source)
Public Utilities Commission
SB 1037
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Opposition
None on file.
Analysis Prepared by : Edward Randolph / U. & C. / (916)
319-2083