BILL ANALYSIS                                                                                                                                                                                                    



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          ASSEMBLY THIRD READING
          AB 46 (Blakelsee)
          As Amended  March 31, 2009
          2/3 vote 

           UTILITIES AND COMMERCE           14-0                
          APPROPRIATIONS      17-0                            
           
           ------------------------------------------------------------------ 
          |Ayes:|Fuentes, Duvall, Tom      |Ayes:|De Leon, Nielsen, Ammiano, |
          |     |Berryhill, Blakeslee,     |     |                           |
          |     |Buchanan, Carter, Fong,   |     |Charles Calderon, Davis,   |
          |     |Fuller, Furutani,         |     |Duvall, Fuentes, Hall,     |
          |     |Krekorian, Skinner,       |     |Harkey, Miller,            |
          |     |Smyth, Swanson, Torrico   |     |John A. Perez, Price,      |
          |     |                          |     |Skinner, Solorio, Audra    |
          |     |                          |     |Strickland, Torlakson,     |
          |     |                          |     |Krekorian                  |
          |-----+--------------------------+-----+---------------------------|
          |     |                          |     |                           |
           ------------------------------------------------------------------ 
           SUMMARY  :  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).
           
          EXISTING LAW  establishes:   

          1)ECAA to provide loans to schools, hospitals, public care  
            institutions, and local government entities for financing  
            energy conservation related projects.

          2)LJEAA as a separate account within the General Fund as a  
            depository for all money received from local jurisdictions  
            from loan repayments, for energy project assistance.  Permits  
            CEC to contract for project services including feasibility  
            analyses, project design, field evaluation, and operation and  
            training assistance.  

           FISCAL EFFECT  :  According to the Assembly Appropriations  
          Committee, 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  








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          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  :   ECAA was created in 1979 to provide grants and loans  
          to fund energy efficiency measures in schools, hospitals, public  
          care institutions, or units of local government and their  
          ancillary services.  The repayment of the loan is based on the  
          amount of money saved as a result of the installation of  
          efficiency measures.  In the short run the borrower's energy  
          payment doesn't decrease because the amount saved due to the  
          energy efficiency project is used to pay back the loan.  After  
          the loan is fully repaid, the borrower entirely benefits by the  
          savings.

          CEC notes that this program has had no defaults.  CEC calculates  
          the amount of the loan based upon a 15-year payback solely from  
          energy savings.  
           
           In the 1980s the federal government had several lawsuits against  
          the Organization of Petroleum Exporting Countries (OPEC).  There  
          were five total overcharge cases against domestic oil producers  
          in California that settled for a total of $426 million.  The  
          penalties levied against oil producers were intended to provide  
          restitution to victims of the oil overcharges.  Expenditure of  
          the funds was required 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).  LJEAA  
          was created from a $40.5 million appropriation from PVEA for  
          energy training and management assistance, and to provide loans  
          to local jurisdictions for energy project assistance.  

          To date, LJEAA has funded over 600 projects including public  
          transportation, computerized school bus routing, highway  
          projects, airport maintenance and reduction in airport user  
          fees.   


           Analysis Prepared by  :    Gina Adams / U. & C. / (916) 319-2083 


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