BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 1194| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 445-6614 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ 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. CONTINUED 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 **** END ****