BILL ANALYSIS                                                                                                                                                                                                    



                                                             


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|SENATE RULES COMMITTEE            |                  SB 1194|
|Office of Senate Floor Analyses   |                         |
|1020 N Street, Suite 524          |                         |
|(916) 445-6614         Fax: (916) |                         |
|327-4478                          |                         |
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                       THIRD READING
                              

Bill No:  SB 1194
Author:   Sher (D)
Amended:  4/20/99
Vote:     21

  
  SENATE ENERGY, U. & C. COMMITTEE :  8-0, 4/13/99
AYES:  Bowen, Baca, Brulte, Kelley, Mountjoy, Peace, Solis,  
  Speier
NOT VOTING:  Alarcon, Hughes, Vasconcellos

  SENATE APPROPRIATIONS COMMITTEE  :  Senate Rule 28.8
 

  SUBJECT  :    Electrical restructuring:  public benefit  
programs

  SOURCE  :     California Public Utilities Commission

 
  DIGEST  :    This bill requires the California Public  
Utilities Commission to study the feasibility of  
administering specified energy efficiency and conservation  
activities through a non-profit public benefit corporation.

  ANALYSIS  :    AB 1890 (Brulte), Chapter 854, Statutes of  
1996, required utilities to fund 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 is "cost-effective energy  
efficiency and conservation activities," for which the  
three investor-owned utilities are required to collect and  
spend a total of $840 million over the four-year period.

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                                                     SB 1194
                                                       Page  
2

This funding was intended to ensure that low income and  
energy efficiency programs continued (at least in the short  
term) in the restructured electric industry.  In order to  
provide oversight of these programs, the California Public  
Utilities Commission (CPUC) established the Low Income  
Governing Board (LIGB) and the California Board for Energy  
Efficiency (CBEE).

Prior to AB 1890, the CPUC required utilities to administer  
the various services provided by these programs as part of  
their regulated service.  In the wake of AB 1890, the CPUC  
proposed to place the administration of the programs under  
the administration of independent bodies, the LIGB and  
CBEE.  The proposed independent administration of these  
programs (i.e., outside of state government and civil  
service requirements) prompted labor interests to intervene  
and challenge the CPUC's proposal.  The challenge led to a  
State Personnel Board ruling rejecting the CPUC's creation  
of the LIGB and CBEE as independent bodies.

In response to the ruling and to provide for continuing  
administration of the programs, the CPUC placed the program  
under utility administration through 2002.  Beyond 2002,  
the CPUC indicated a preference for legislative creation of  
a non-profit organization to administer the programs, to  
the extent that future funding for the programs is  
authorized.

This bill requires CPUC to study the feasibility of  
administering those activities through a nonprofit public  
benefit corporation.

  Comments

  According to the sponsor, the CPUC, this bill is intended  
to codify the CPUC's decision and recognize the need for  
legislative and CPUC action to implement ongoing  
administration.  Apparently, because the statutory fate of  
these programs beyond 2001 remains uncertain, the CPUC is  
not comfortable providing for long-term administration  
without some direction from the Legislature.  
  
  FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
Local:  No







                                                     SB 1194
                                                       Page  
3



  SUPPORT  :   (Verified  5/7/99)

California Public Utilities Commission (source)


NC:cm  5/10/99   Senate Floor Analyses 

               SUPPORT/OPPOSITION:  SEE ABOVE

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