BILL ANALYSIS AB 46 Page 1 Date of Hearing: April 22, 2009 ASSEMBLY COMMITTEE ON APPROPRIATIONS Kevin De Leon, Chair AB 46 (Blakeslee) - As Amended: March 31, 2009 Policy Committee: UtilitiesVote:14-0 Urgency: No State Mandated Local Program: No Reimbursable: SUMMARY 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 (CEC). 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. COMMENTS 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 Page 2 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