BILL ANALYSIS
SB 1194
Page 1
Date of Hearing: June 28, 2000
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Carole Migden, Chairwoman
SB 1194 (Sher) - As Amended: June 21, 2000
Policy Committee: Utilities and
Commerce Vote: 11-1
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill extends an electrical usage rate charge to continue
funding three energy-related programs. Specifically, this bill:
1)Extends the collection of a nonbypassable system benefits
charge on all electric utility bills for 10 years to continue
funding: a) energy efficiency and conservation activities; b)
public interest research, development, and demonstration
(RD&D) and; c) in-state operation and development of existing,
and emerging renewable energy resources.
2)Requires investor-owned and municipal utilities to collect
specific dollar amounts for each of the programs beginning on
January 1, 2002, through January 1, 2012. (A total of $425.5
million is to be collected for the three programs in 2002;
this amount will be adjusted annually at a rate equal to the
lesser of the annual growth in electric commodity sales or
inflation.)
3)Requires the Public Utilities Commission (PUC) to continue
administering the energy efficiency programs.
4)Prohibits expenditure of any moneys collected for the RD&D and
renewal energy programs without further Legislative action.
5)Requires the Energy Resources Conservation and Development
Commission (CEC) to develop specified investment plans, by
March 2001, covering the first five year increment of the RD&D
and renewable energy programs, and requires subsequent
investment plans in 2006 covering the second five-year
increment.
SB 1194
Page 2
6)Requires the governor to appoint an independent review panel
by January 2004 to submit a report to the Legislature and CEC
by January 2005 that evaluates the three programs and includes
recommendations to assist the Legislature in determining
whether to change or eliminate the collection of system
benefits charge after 2006.
7)Adds an additional condition-misrepresentation of material
fact during application-by which an electrical service
provider may have their registration revoked by the PUC.
FISCAL EFFECT
1)The PUC indicates minor absorbable special fund costs to
continue administering the energy efficiency programs.
2)The CEC indicates absorbable costs to prepare the investment
plans for future legislative consideration to determine
expenditure of funds collected for the RD&D and renewable
energy programs.
3)Absorbable special fund costs for the PUC and the CEC to
provide assistance to the independent review panel.
COMMENTS
1)Background . As part of the state's electrical restructuring
legislation of 1996 (AB 1890, Brulte), the three
investor-owned utilities, Southern California Edison Company
(SCE), Pacific Gas and Electric Company (PG&E) and San Diego
Gas and Electric Company (SDG&E), are required to collect
specified amounts to fund the three programs through 2001.
While this bill extends the authority to collect funds to
support the programs for up to 10 years (in two five-year
blocks), rather than simply extending the funding
authorization, this bill requires the CEC to first develop
investment plans for the renewable and RD&D programs covering
each five year block.
2)System Benefits Charge . The bill establishes that the system
benefits charge to fund the three programs is nonbypassable
for every customer of an electrical corporation. Growth in
the amounts authorized for collection will be limited to the
SB 1194
Page 3
lesser of the annual growth in electric commodity sales or
inflation. These provisions place limits on program funding
levels and customer surcharge rates, which large users have
indicated provides them greater certainty regarding costs to
support these programs.
Analysis Prepared by : Chuck Nicol / APPR. / (916)319-2081