BILL ANALYSIS 1
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SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
ALEX PADILLA, CHAIR
AB 262 - Bass Hearing Date: June 30, 2009
A
As Amended: April 14, 2009 FISCAL B
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6
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DESCRIPTION
H.R. 1, the American Recovery and Reinvestment Act of 2009
(ARRA), provides $3.1 billion for state energy efficiency
programs. Of this the California Energy Commission (CEC)
expects to receive $226 million for State Energy Programs (SEP)
and $56 million for energy efficiency and conservation grants to
local governments.
This bill specifies that any energy related ARRA funds be
administered by the appropriate state agency, and that the funds
should adhere to the principle of accountability and well as
existing state energy and environmental policies.
This bill makes technical changes to permit the CEC to
expeditiously administer the ARRA funding. The maximum overhead
for the CEC is raised from 5% to 10%.
This bill authorizes the CEC to adopt guidelines for the
expenditure of ARRA funding in a publicly noticed meeting, with
not less than 30 days public notice for the initial adoption of
guidelines
BACKGROUND
The federal ARRA funds will support the implementation of
longstanding California policies on energy efficiency.
The CEC has filed its proposal to the U.S. Department of Energy
(DOE) for spending the $226 million in SEP funds. $20 million
is proposed for a green jobs training program with most of the
remainder targeted to energy efficiency retrofits and clean
energy systems in residential, non-residential and industrial
sectors. The CEC has pledged to work with the Legislature in
further developing this program.
On June 25 the DOE awarded California $90.4 million in SEP
funding, with $113 million in SEP funding still pending.
COMMENTS
1. Initial Appropriation and Technical Fixes Covered in the
Budget - The CEC has expressed concerns that certain
provisions of law must be revised if they are to
expeditiously expend the expected ARRA funds. Those
changes are contained in a budget trailer bill. That
language also provides for funding for energy retrofits in
state buildings. In addition the proposed budget provides
the CEC with the authority to spend about half of the ARRA
funds.
2. What's the Policy? - The ARRA energy goals are
longstanding goals of the state:
Increase energy efficiency to reduce energy
costs and consumption for consumers, businesses and
government;
Reduce reliance on imported energy;
Improve the reliability of electricity and
fuel supply and the delivery of energy services; and
Reduce the impacts of energy production and
use on the environment.
Within these goals there is substantial flexibility. The
type of program (e.g. grants or loans) and the program
beneficiaries (e.g. renters, small-businesses, rural areas)
are left to the state, provided that savings can be
documented. Some of the eligible activities that the CEC
will consider are:
Implementing building and industrial energy
efficiency programs;
Establishing and expanding financial
incentives or loans for energy efficiency;
Expanding renewable distributed generation
programs;
Expanding renewable energy programs;
Promoting regional cooperation;
Facilitating sharing of best energy practices;
and
Increasing coordination with utilities
including promulgation of measurement and verification
methodologies.
Since the mechanical problems with distributing the ARRA
energy funding will be dealt with in the budget process,
there is no need for further legislation unless members
choose to provide the CEC with policy guidance. The
leadership in both houses and the CEC have only begun to
engage in policy discussions on the priorities for ARRA
funding. Rather than prejudge the outcome of those
discussions, the author and committee may wish to consider
stripping out the operative provisions of the bill, pending
the outcome of those discussions.
3. One Bill - There is no reason to have multiple bills
dealing with the ARRA. It would be simpler and more
efficient to incorporate the Legislature's ARRA policies
into a single bill, either this bill or AB 234 (Huffman),
also being heard today.
ASSEMBLY VOTES
Assembly Floor (58-15)
Assembly Appropriations Committee (13-4)
Assembly Utilities and Commerce Committee
(11-3)
POSITIONS
Sponsor:
Author
Support:
American Federation of State, County and Municipal Employees,
AFL-CIO
Association of California Water Agencies
California League of Cities
California State Association of Counties
Regional Council of Rural Counties
San Diego County Water Authority
Santa Clara County Board of Supervisors
Urban Counties Caucus
Oppose:
None on file
Randy Chinn
AB 262 Analysis
Hearing Date: June 30, 2009