BILL ANALYSIS                                                                                                                                                                                                    




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                           17 (Padilla)
          
          Hearing Date:  05/26/2009           Amended: 05/05/2009
          Consultant:  Brendan McCarthy   Policy Vote: EU&C 10-0














































          SB 17 (Padilla)
          Page 2


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          BILL SUMMARY: SB 17 requires the Public Utilities Commission, in  
          consultation with the Energy Commission and others, to develop a  
          smart electricity grid deployment plan and to adopt standards  
          and protocols to facilitate the adoption of smart grid  
          technologies. The bill requires the investor owned utilities to  
          develop and submit a smart grid deployment plan for approval by  
          the Public Utilities Commission. The bill also requires  
          municipal electric utilities with more than 100,000 customers to  
          develop a smart grid deployment plan.
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                            Fiscal Impact (in thousands)

           Major Provisions         2009-10      2010-11       2011-12     Fund
           
          PUC regulations        Absorbable within existing resources  
          Special *

          CEC consultation       $50        $100        $100      Special  
          **

          * PUC Utilities Reimbursement Account                       
          ** Public Interest Research, Development and Demonstration Fund
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          STAFF COMMENTS: 
          
          Current federal law requires each state to consider investment  
          in smart electricity grid systems and directs the National  
          Institute of Standards and Technology to coordinate the  
          development of smart grid standards. The American Reinvestment  
          and Recovery Act of 2009 authorizes the federal Department of  
          Energy to award $4 billion in grants for smart grid deployment  
          projects.

          SB 17 requires the Public Utilities Commission, in consultation  
          with the Energy Commission, the California Independent System  
          Operator and other stakeholders to determine the requirements  
          for a smart gird deployment plan. The Public Utilities  
          Commission shall institute a rulemaking proceeding to adopt  
          standards and protocols for a smart grid. The bill also requires  
          the Public Utilities Commission to report annually on issues  







          SB 17 (Padilla)
          Page 2


          relating to the deployment of smart grid technology.

          The Public Utilities Commission indicates that it has already  
          begun a proceeding on this issue and can absorb the costs within  
          existing resources. Because the Energy Commission already uses  
          existing research and development funds to work on issues  
          relating to smart grid issues, it should need limited additional  
          resources to consult with the Public Utilities Commission on  
          this issue.

          The bill requires each investor owned utility to develop and  
          submit a smart grid deployment plan to the Public Utilities  
          Commission by July 2011. The bill also requires each municipal  
          electric utility with more than 100,000 service connections to  
          develop a smart grid deployment plan by July 2011.

          The eventual deployment of smart grid technologies will  
          primarily be funded by electricity ratepayers. Because the  
          technologies to be deployed, the timeline over which they will  
          be deployed, and the impact those technologies will have on  
          electricity grid management are unknown, it is not possible to  
          predict whether smart grid deployment will lead to higher or  
          lower electricity rates.