BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Kevin Murray, Chairman
1368 (Perata)
Hearing Date: 5/25/06 Amended: 4/24/06
Consultant: John Decker Policy Vote: EQ 5-1
_________________________________________________________________
____
BILL SUMMARY: SB 1368 would require the California Energy
Commission (CEC) to set emission (e.g., pollution) standards for
those entities providing electricity in the state. The bill
also would require the California Public Utilities Commission
(CPUC) to prohibit electricity providers and corporations from
entering long-term contracts which do not meet the CEC's
standard.
_________________________________________________________________
____
Fiscal Impact (in thousands)
Major Provisions 2006-07 2007-08 2008-09 Fund
Electricity costs ----------- unknown, see below
------------ GF & SF*
Develop & promulgate
regulations $50
Special**
*The costs paid by departments would be financed with the
General Fund and all special funds which are used to finance
operations within buildings.
**These costs are likely financed by the Energy Resources
Products Account
_________________________________________________________________
____
STAFF COMMENTS: Suspense File.
This bill requires the CEC to set standards for greenhouse gas
emissions from powerplants. The standard may not exceed the
average emissions of a comparable combined-cycle natural-gas
powerplant. The bill directs the commission, when setting the
standard, to consult with the Air Resources Board.
The bill prohibits certain electricity providers from making a
long-term commitment to electricity supplies unless the
electricity generated under the commitment meets the CEC's
emission standard. "Long term" is defined as three years. The
electricity providers covered under this provision are
electrical corporations, electric service providers, community
choice aggregators and local public electricity utilities.
Under the bill, the CPUC may not approve a long-term commitment
that violates the CEC's standard. The CPUC may adopt rules to
monitor and enforce the prohibition among corporations,
providers and aggregators. The CEC is to enforce the
prohibition among local public utilities.
The bill imposes some costs on the CEC and air board to develop
emission standards and promulgate regulations. These costs are
unknown, but could be in excess of $50,000. These costs would
likely be borne by special funds, primarily the Energy Resources
Products Account (ERPA). The CPUC says it will incur no new net
costs to monitor or enforce the bill's provisions.
- continued -
Page 2
SB 1368 (Perata)
In addition, to the extent the regulations limit the number of
suppliers who may provide power to the California market, the
bill could increase wholesale electricity costs. If those costs
are reflected in the electricity rates the state pays, then the
state's long-term utility costs would rise, potentially
beginning in the budget year. These costs, potentially major,
could be charged to the General Fund and most special funds.