BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
412 (Kehoe)
Hearing Date: 5/4/2009 Amended: As introduced
Consultant: Brendan McCarthy Policy Vote: EU&C 10-1
SB 412 (Kehoe)
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BILL SUMMARY: SB 412 extends the sunset of an existing program,
the Self Generation Incentive Program, which provides incentives
for fuel cell and wind distributed electricity generation
facilities. The bill would extend the sunset for one year, to
2013. The bill also potentially expands the technologies that
are eligible for incentives under the program and exempts
certain residential electricity customers from paying the
surcharge that supports the program.
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Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13 Fund
Regulatory oversight of the Up to $50 Up to
$50 Special *
program
Increased cost of electricity $4,570
$4,570General /
to state agencies Special
**
* Public Utilities Commission Utilities Reimbursement Account
** The division of costs between General Fund and Special Fund
agencies and departments is unknown.
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STAFF COMMENTS: This bill meets the criteria for referral to the
Suspense File.
Current law authorizes the California Public Utilities
Commission to administer the Self-Generation Incentive Program
through 2012. Under this program, incentives are provided to
operators of fuel cell and wind distributed electricity
generation facilities. Originally, this program provided
incentives to a variety of renewable energy technologies as well
as very efficient combined heat and power natural gas
distributed generation facilities. Over time, the scope of the
program has been narrowed, such that currently only fuel cells
and wind technologies are eligible for incentives. The program
is budgeted at $83 million per year, supported by electricity
SB 412 (Kehoe)
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ratepayer funds.
SB 412 would extend the sunset of the existing Self-Generation
Incentive Program for an additional year, to 2013. Based on
existing program size, this would result in costs to electricity
ratepayers of $83 million in 2012. There would be increased
costs to state agencies, based on their use of electricity
generated by investor owned utilities. Currently, state agencies
make up 10-11% of investor owned utility electricity demand.
Staff notes that in the past, certain state agencies
participated in this program. To the extent that state agencies
participate in the future, this could potentially reduce costs
to state agencies.
This bill would repeal the limitation on funding only fuel cells
and wind technologies. Instead, the bill would allow the
commission to determine eligible technologies for the program,
provided that they support the state's goals for the reduction
of greenhouse gas emissions under the California Global Warming
Solutions Act of 2006 (AB 32, Nunez) and provided that
combustion-powered technologies meet specified criteria relating
to emissions of greenhouse gasses and other air pollutants.
The bill would exempt all residential customers participating in
the California Alternate Rates for Energy Program (certain
low-income or fixed-income utility customers) from paying the
surcharge that supports the program. The bill does not specify
whether the size of the program will be reduced to accommodate
this change or whether other utility customers would pay a
larger surcharge to offset the reduced revenues. If the size of
the program is not reduced, there would be a small shift in
program costs to remaining ratepayers.