BILL ANALYSIS 1 1 SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE DEBRA BOWEN, CHAIRWOMAN ------------------------------------------------------------ |SB 418 - Bowen |Hearing Date:May 11, 1999 | S| |------------------------------+--------------------------+--| |As Amended:April 26, 1999 |NON- | B| |------------------------------+--------------------------+--| | | | | |------------------------------+--------------------------+--| | | | 4| |------------------------------+--------------------------+--| | | | 1| |------------------------------+--------------------------+--| | | | 8| |------------------------------+--------------------------+--| | | | | |------------------------------+--------------------------+--| | | | | ------------------------------------------------------------ DESCRIPTION This bill makes a statement of the Legislature's intent to provide for the future funding and administration of energy-related public purpose programs and makes a technical change to a related provision. KEY QUESTIONS 1.Which of the electric utilities' public purpose programs deserve continued funding? 2.What levels of funding are appropriate? 3.How should they be administered? BACKGROUND AB 1890 (Brulte), Chapter 854, Statutes of 1996, required utilities to devote a share of their revenues to a variety of system reliability, in-state benefit and low-income customer programs at specified levels from 1998 through 2001. The largest set of programs consists of "cost-effective energy efficiency and conservation activities," for which the three investor-owned utilities are required to collect and spend a total of $872 million over the four-year period. Another $250 million is designated for research, development and demonstration to advance technologies that have public benefits but would not otherwise be developed by market forces. Finally, a total of $540 million goes toward operation and development of renewable energy sources, divided among existing, new and emerging technologies. A spending plan for the funds set aside for renewables was subsequently developed by the California Energy Commission and authorized by SB 90 (Sher), Chapter 905, Statutes of 1997. The AB 1890 funding was intended to ensure that public purpose energy programs continued (at least in the short term) in the restructured electric industry. Prior to AB 1890, the California Public Utilities Commission (CPUC) required utilities to administer the various services provided by these programs as part of their regulated service. This bill contemplates extending the funding and providing for the administration of these programs beyond 2001. The author is awaiting evaluations of the public value and cost-effectiveness of the programs prior to proposing specific funding levels or mechanisms for any programs that may deserve continued support. COMMENTS 1) Related legislation . AB 1393 (Wright), currently in the Assembly Appropriations Committee, and SB 1194 (Sher), approved by the Committee on April 13 and currently in the Senate Appropriations Committee, both address the energy efficiency and conservation portion of the public purpose programs. AB 1393 continues funding for these activities beyond 2001 by requiring utilities to collect a 1.5 mill/kwh surcharge. SB 1194 requires the CPUC to study administration of the activities by a special purpose non-profit corporation. SB 418 intends to address both funding and administration of the full range of public purpose programs currently funded through AB 1890. However, to the extent that AB 1393 or SB 1194 address funding and/or adminstration of energy efficiency and conservation programs, SB 418 may not need to address those specific issues. 2) Further policy review will be needed . Should the Committee approve this bill, it may wish to request the author's commitment to return the bill to the Committee for further review after more substantive provisions have been added. POSITIONS Support: None reported to Committee. Oppose: None reported to Committee. Lawrence Lingbloom SB 418 Analysis Hearing Date: May 11, 1999