BILL ANALYSIS                                                                                                                                                                                                    



                                                                 AB 51
                                                                 Page  1


         ASSEMBLY THIRD READING
         AB 51 (Blakeslee)
         As Amended  June 1, 2009
         Majority vote 

          UTILITIES AND COMMERCE           13-0               APPROPRIATIONS  
         15-0                
          
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         |Ayes:|Fuentes, Tom Berryhill,   |Ayes:|De Leon, Nielsen,         |
         |     |Blakeslee, Buchanan,      |     |Ammiano,                  |
         |     |Carter, Fong, Furutani,   |     |Charles Calderon, Davis,  |
         |     |Huffman, Krekorian,       |     |Fuentes, Hall, Harkey,    |
         |     |Skinner, Smyth, Swanson,  |     |John A. Perez, Price,     |
         |     |Torrico                   |     |Skinner, Solorio, Audra   |
         |     |                          |     |Strickland, Torlakson,    |
         |     |                          |     |Krekorian                 |
         |-----+--------------------------+-----+--------------------------|
         |     |                          |     |                          |
          ----------------------------------------------------------------- 
          SUMMARY  :  Requires the Public Utilities Commission (PUC) to limit  
         to 10% the administrative costs of energy efficiency programs  
         funded and operated by the investor-owned utilities (IOUs).  For  
         this purpose, administrative costs include personnel and overhead,  
         but not marketing, outreach, and program evaluation.

          EXISTING LAW  :   

         1)Requires each electrical corporation to first meet its resource  
           needs through all available energy efficiency and demand  
           reduction resources that are cost effective, reliable, and  
           feasible, before it can procure other resources.

         2)Establishes a Public Goods Charge (PGC) that consumers pay on  
           electricity and natural gas consumption for cost-effective energy  
           efficiency, renewable technologies, and public interest energy  
           research.

          FISCAL EFFECT  :  According to the Assembly Appropriations Committee,  
         PUC will incur one-time costs of $200,000 in 2010-11 for a database  
         consultant and ongoing costs of $80,000 for one position.  

          COMMENTS  :  According to the author, the purpose of this bill is to  
         ensure that more ratepayer funds for energy efficiency programs are  
         accessible to ratepayers, while maintaining flexibility for  







                                                                 AB 51
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         utilities to manage the programs at their discretion.

         PUC rules required IOUs to spend $2.7 billion for energy efficiency  
         programs over a three-year period.  When PUC approved these  
         programs, they anticipated that the programs would result in a  
         1,448 MW savings and $4.9 billion in savings to the utility.  This  
         would be a net savings of $2.7 billion ($4.9 billion in overall  
         savings - $2.2 billion in expenditures). 

         According to information provided by PUC in the 2006 - 2008 program  
         cycle IOUs on average spent 12.4% of the program funds on the  
         categories PUC defined as administrative costs.  IOUs spent an  
         additional 12% of the funds on marketing and outreach.  IOUs spent  
         75.6% of the funds on actual energy efficiency incentives and  
         rebates. 

         In the past, this committee has generally capped allowable  
         administrative expenses for programs using public or ratepayer  
         funds at 10%.

          Analysis Prepared by  :    Edward Randolph / U. & C. / (916) 319-2083  
                                                           FN: 0001254