BILL ANALYSIS 1 1 SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE ALEX PADILLA, CHAIR SB 363 - Hancock Hearing Date: April 27, 2009 S As Amended: April 15, 2009 FISCAL B 3 6 3 DESCRIPTION Current law establishes the State Energy Conservation Assistance Account (SECAA) to provide grants and loans to local governments, schools and other public institutions for financing energy efficiency and distribution generation measures. This bill creates a sub-account within SECAA for the deposit of proceeds from the settlement of the legal proceedings against The Williams Companies, Inc. and Williams Energy Marketing and Trading Company to be used for loans to schools for the installation of solar energy systems. BACKGROUND In 2002, California parties entered a settlement of energy crisis claims against Williams Energy. The Williams settlement resolved two separate complaints filed in state court by California's Attorney General (AG), then Bill Lockyer. One complaint alleged Williams violated the state's Unfair Competition Act by illegally pricing its energy. The second alleged Williams double-sold power in violation of rules designed to ensure the reliability of the electricity grid, and unjustly profited by charging the state millions of dollars for emergency generating capacity that the company never provided as promised. The settlement also resolved other lawsuits filed by local governments and private plaintiffs. The settlement was valued at $417 million by the Attorney General and included a schedule of specified cash payments to the state for specified purposes including $25 million to an "Alternative Energy Retrofit Account" at the Power Authority for "retrofit of schools and public buildings." The account was not created, the Power Authority no longer exists, and all settlement proceeds have been exhausted. COMMENTS Revolving Loan Fund - The SECAA provides loans of up to $3 million public schools, colleges, cities, counties, special districts, public hospitals, and public care institutions at 3.95 percent interest for up to 15 years. The loan program is designed so that the energy savings achieved will cover the costs of the project and loan interest. Eligible projects include lighting, building insulation, heating and air conditioning modifications, automated energy management systems/controls and energy generation including renewable energy projects and cogeneration. This bill would create a new sub account in the SECAA program to fund loans for schools at 1.5 percent specifically for solar energy systems. However, there are no funds left as a result of the Williams settlement. The author and committee may wish to consider striking all references to the Williams funds. A sub-account would remain for solar for schools in the event that new monies were made available as a result of the American Reinvestment and Recovery Act or other sources, upon appropriation by the Legislature. POSITIONS Sponsor: Coalition for Adequate School Housing KyotoUSA Support: Albany (CA) Sustainability Committee Albany Unified School District's Pool Sustainability Committee California Interfaith Power and Light Carbon Neutral Albany City of Richmond Community Environmental Council Creekcats Environmental Partners Dharma Merchant Services Dreyfuss & Blackford Architects Ecology Center Green Chamber of Commerce Green Sangha San Francisco Bay Area chapter of Physicians for Social Responsibility Sequoia Foundation Solar Panels for Albany High The Vote Solar Initiative Warner Bros. Entertainment 15 individuals Oppose: None on file Kellie Smith SB 363 Analysis Hearing Date: April 27, 2009