BILL ANALYSIS                                                                                                                                                                                                    




                    Appropriations Committee Fiscal Summary
          SB 1345 (Peace)
          Hearing Date:  5/1/00                       Amended: As  
          Introduced               
          Consultant:  Bob Franzoia      Policy Vote: E, U & C  8-0
          ____________________________________________________________ 
          ___
          BILL SUMMARY: SB 1345 would do the following:
          o Require the California Energy Commission (CEC), beginning  
          7/1/01 and until 1/1/06 to implement a grant program to  
          accomplish specified goals including making solar energy  
          systems cost competitive with alternate forms of energy.
          o Require the grants to be based on either the performance  
          of, or the type of, the solar energy system and would  
          prohibit duplicate grants from other grant programs  
          administered by the CEC for solar systems that produce  
          electricity. 
          o Require the CEC to develop and implement a grant program  
          to offset a portion of the costs of eligible distributed  
          generation systems.
          o Require the Public Utilities Commission (PUC) to  
          establish appropriate interconnection and safety  
          requirements and operating agreements for distributed  
          generation.
                              Fiscal Impact (in thousands)
           Major Provisions                     2000-01       2001-02   2002-03         
               Fund  
          Grants                       Unknown, major costs Special*/
          (CEC)                                             General

          Program admin      $250 initially, $400 on going  Special*
          (CEC)

          PUC agreements                Unknown costs            Special**
          * Energy Resources Programs Account
          ** Public Utilities Commission Utilities Reimbursement Account        
                                              
          STAFF COMMENTS: This bill meets the criteria to be placed  
          on the Suspense file.

          The Senate Budget and Fiscal Review Committee is proposing  
          an appropriation of $1.7 million from the Energy Resources  
          Programs Account for the purposes of this bill.  The bill  
          authorizes the CEC to use up to three percent of the funds  
          appropriated for the program to fund its costs in  
          administering the program or $51,000 based on the proposed  










          appropriation.  This would fund less than one PY, which is  
          inadequate for a program of this size and complexity.   
          STAFF RECOMMENDS the administration cap be increased to a  
          minimum of ten percent or that an amount of funding based  
          on anticipated workload be provided.

          This bill is similar to SB 655 (Peace) of 1999 which was  
          vetoed.  The Governor's veto message noted the following:

          While I am supportive of efforts to promote emerging solar  
          and distributed generation technologies, this bill  
          establishes a new grant program without establishing the  
          source or amount of funding.  This program, while  
          important, should compete with other priorities in the  
          annual budget process.