BILL ANALYSIS
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UNFINISHED BUSINESS
Bill No: SB 1345
Author: Peace (D)
Amended: 8/25/00
Vote: 21
SENATE ENERGY, U.&C. COMMITTEE : 8-0, 4/11/00
AYES: Bowen, Alarcon, Brulte, Hughes, Kelley, Peace,
Solis, Vasconcellos
SENATE APPROPRIATIONS COMMITTEE : 13-0, 5/25/00
AYES: Johnston, Alpert, Bowen, Burton, Escutia, Johnson,
Karnette, Kelley, Leslie, McPherson, Mountjoy, Perata,
Vasconcellos
SENATE FLOOR : 39-0, 6/1/00 (Consent)
AYES: Alarcon, Alpert, Bowen, Brulte, Burton, Chesbro,
Costa, Dunn, Escutia, Figueroa, Hayden, Hughes,
Johannessen, Johnson, Johnston, Karnette, Kelley, Knight,
Leslie, Lewis, McPherson, Monteith, Morrow, Mountjoy,
Murray, O'Connell, Ortiz, Peace, Perata, Polanco,
Poochigian, Rainey, Schiff, Sher, Solis, Soto, Speier,
Vasconcellos, Wright
ASSEMBLY FLOOR : 75-0, 8/28/00 - See last page for vote
SUBJECT : State Energy Commission: grant program: solar
energy systems
SOURCE : Author
DIGEST : This bill establishes a grant program to offset
CONTINUED
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a portion of the costs in solar and low-pollution
distributed generation systems.
Assembly Amendments :
1. Delete provision requiring CEC to develop and adopt
guidelines.
2. Delete provision authorizing CEC to use 3% of funds for
administration.
3. Delete operative date of July 1, 2001.
4. Provide that the bill shall not affect the existing PUC
authority to adopt regulations, as specified.
5. Delete provision requiring PUC to establish
interconnection and safety requirements and operating
agreements for distributed generation.
ANALYSIS : Current federal law provides a credit equal to
10% of the cost of energy property placed in service during
a given tax year.
The California Constitution was amended in 1980 to clarify
that active solar energy systems would not be assessed as
"new construction" under Proposition 13's property tax
limitations.
This bill implements a new grant program through the
California Energy Commission (CEC) to offset a portion of
the costs of solar energy systems and distributed
generation (DG) systems. Specifically, this bill:
1. Revises the definition of "solar energy system" to add
DG to the definition.
2. Defines "distributed generation" as any onsite
generation interconnected and operating in parallel with
the electricity grid, that is used solely to meet onsite
electrical load.
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3. Creates a grant program through CEC to provide grants of
up to $750 to homebuilders or homeowners who install
thermal solar systems or specified photovoltaic solar
systems in their homes.
4. Creates a grant program through CEC for up to $2,000 to
homebuilders or homeowners who install DG systems in
their homes.
5. Requires the California Public Utilities Commission
(CPUC) to establish operational and safety standards for
DG systems installed under the grant program.
Background :
Existing law provides a variety of mechanisms to support
and encourage the development of solar energy programs,
including property tax exemptions for installation of solar
systems and grants for development and operation of some
solar generation technologies.
AB 1890 (Brulte), (Chapter 854, Statutes of 1996), provided
$540 million, collected over four years, to operate and
develop new, emerging and existing renewable resource
technologies. The CEC was charged with developing a
spending plan for these funds, as well as others dedicated
in AB 1890 for various public purpose programs. The CEC
spending plan was codified by SB 90 (Sher), (Chapter 905,
Statutes of 1997).
Under SB 90, the grid-connected photovoltaic segment of the
solar industry (which is potentially eligible for grants
under this bill) is eligible to compete for 10% of the $540
million - the portion designated for new and emerging
technologies. Photovoltaics, or PV systems, include the
traditional panels and other types of receptors that take
in sunlight and provide electricity for residential and
industrial use.
Distributed generation (DG) is a growing industry that has
been receiving quite a bit of attention as the state's
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energy needs continue to grow. With recent energy
shortages during peak demand periods, uncertainties about
the future competitive marketplace and new power plant
generation still two to three years from completion, DG
systems are reaching more and more commercial customers -
with residential systems in the advanced development
stages.
Distributed generation (DG) is small-scale production of
electricity at or near the point of use, as opposed to
central generation, where electricity is produced in large
quantities at a remote site and transmitted to multiple
users. DG systems range from photovoltaics and fuel cells
to gas turbines and diesel engines in residential,
commercial and industrial applications that can operate in
conjunction with, or independent of, the electricity grid.
Prior legislation :
This bill is similar to SB 655 (Peace) of 1999, which was
approved by this committee but vetoed by the Governor. The
Governor's veto message reads:
"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."
This bill is also similar to SB 116 (Peace) of 1998, which
established a grant program for solar systems, but not
distributed generation systems. In addition, SB 116
reinstated a property tax exemption for the installation of
solar systems. SB 116 was vetoed by Governor Wilson, who
objected to the grant program, stating a preference for
"fair and open market competition without government
subsidization of one particular industry." The property
tax exemption provisions of SB 116 were reinstated by AB
1755 (Keeley), (Chapter 855, Statutes of 1998).
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
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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 spend $250,000 of the funds
appropriated for the program to fund its costs in
administering the program. Unknown costs for grants.
SUPPORT : (Verified 5/30/00) (Unable to reverify at time
of writing)
California Manufactures & Technology Association
California Solar Energy Industries Association
Clean Power Campaign
ESDI, Inc.
Environmental Solar Design, Inc.
Goldline Electronic Controls
Heliocol Solar
Horizon Industries
Independent Power Providers
New Energy
Off Line Independent Energy Systems
Renewable Energy Concepts, Inc.
San Diego Regional Energy Office
Sierra Club
Solar Depot
Solar Roofs. Com
SUN Utility Network
USAN
Astro Power
Aztec Solar
California State Association of Electrical Workers
Environmental Defense Fund
Kyocere Solar, Inc.
Pacific Solar Company
Politico Group - National Electrical Contractors
Association
Politico Group - California Legislative Conference of the
Plumbing, Heating
and Piping Industry
Science Application International Corporation
Sierra Pacific
Various individuals
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ASSEMBLY FLOOR :
AYES: Aanestad, Ackerman, Alquist, Aroner, Ashburn,
Baldwin, Bates, Battin, Baugh, Bock, Brewer, Briggs,
Calderon, Campbell, Cardenas, Cardoza, Cedillo, Corbett,
Correa, Cox, Cunneen, Davis, Dickerson, Ducheny, Dutra,
Firebaugh, Gallegos, Granlund, Havice, Honda, House,
Jackson, Kaloogian, Keeley, Knox, Kuehl, Leach, Lempert,
Leonard, Longville, Lowenthal, Machado, Maddox,
Maldonado, Margett, Mazzoni, McClintock, Migden, Nakano,
Olberg, Oller, Robert Pacheco, Papan, Pescetti, Reyes,
Romero, Runner, Scott, Shelley, Steinberg, Strickland,
Strom-Martin, Thompson, Thomson, Torlakson, Villaraigosa,
Vincent, Washington, Wayne, Wesson, Wiggins, Wildman,
Wright, Zettel, Hertzberg
NC:jk 8/29/00 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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