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


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|SB 418 - Bowen                |Hearing Date:May 11, 1999 | S|
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|As Amended:April 26, 1999     |NON-                      | B|
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                         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