BILL ANALYSIS                                                                                                                                                                                                    

                                                                  AB 46
                                                                  Page  1

          Date of Hearing:   April 22, 2009

                                Kevin De Leon, Chair

                   AB 46 (Blakeslee) - As Amended:  March 31, 2009 

          Policy Committee:                               

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:               


          This bill extends the sunset dates, from January 1, 2011 to  
          January 1, 2020, for the Energy Conservation Assistance Account  
          (ECAA) and the Local Jurisdiction Energy Assistance Account  
          (LJEAA), each administered by the California Energy Commission  

           FISCAL EFFECT  

          Continues local assistance energy efficiency programs, and their  
          associated spending for nine additional years.  According to  
          data from the CEC, loans under the ECAA have averaged about $8  
          million over the last five years.  For the LJEAA, only one loan  
          ($651,000) has been made in the last five years.  In addition,  
          any money remaining in the ECAA as of the current sunset date,  
          would otherwise revert to the General Fund.


           1)The ECAA  was created in 1979 to provide grants and loans to  
            fund energy efficiency measures in schools, hospitals, public  
            care institutions, and local government entities.  The loan  
            repayment is based on cost savings as a result of installing  
            efficiency measures.  Initially, the borrower's energy payment  
            does not decrease because the savings are used to pay back the  
            loan.  After the loan is fully repaid, the borrower entirely  
            benefits from the savings.

           2)LJEAA  .  In the 1980s the federal government had several  
            lawsuits against the Organization of Petroleum Exporting  
            Countries (OPEC).  There were five overcharge cases against  


                                                                  AB 46
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            domestic oil producers in California that settled for a total  
            of $426 million, with these penalties intended to provide  
            restitution to victims of the overcharges.  Expenditure of the  
            funds was to benefit energy consumers and could not supplant  
            state funds already allocated for energy-related programs.  To  
            fund projects of statewide benefit, the state created the  
            Petroleum Violation Escrow Account (PVEA).  The LJEA was  
            created from a $40.5 million appropriation from the PVEA for  
            energy training and management assistance, and to provide  
            loans to local jurisdictions for energy project assistance.  

           Analysis Prepared by :    Chuck Nicol / APPR. / (916) 319-2081