BILL ANALYSIS                                                                                                                                                                                                    




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                           806 (Wiggins)
          
          Hearing Date:  05/18/2009           Amended: 04/29/2009
          Consultant:  Brendan McCarthy   Policy Vote: EU&C 8-3
          _________________________________________________________________ 
          ____
          BILL SUMMARY:  SB 806 would require the Public Utilities  
          Commission to limit investor owned utility administrative costs  
          for energy efficiency programs to 5 percent of total costs. The  
          bill requires the Commission to ensure that incentive payments  
          made to the utilities meet specified criteria.
          _________________________________________________________________ 
          ____
                            Fiscal Impact (in thousands)

           Major Provisions         2009-10      2010-11       2011-12     Fund
                                 
          Regulatory oversight   $192       $192                  Special  
          *

          * Public Utilities Commission Reimbursement Account
          _________________________________________________________________ 
          ____

          STAFF COMMENTS: This bill meets the criteria for referral to the  
          Suspense file. 
          
          Under current law, the Public Utilities Commission oversees  
          energy efficiency programs administered by the investor owned  
          utilities. Under current practice, the Commission provides  
          financial incentives (both additional payments and penalties) to  
          the utilities based on their achievement of energy efficiency  
          goals.

          SB 806 would require the Commission to limit utility  
          administrative costs to 5 percent of total costs. (The  
          Commission indicates that administrative costs currently range  
          from 8.8 percent to 15.1 percent of costs.) The bill would also  
          require the Commission to ensure that no incentive payments are  
          made unless the efficiency savings have been verified by an  
          independent audit, that incentive payments are made only based  
          on actual achievement of specified goals, that incentive  
          payments are awarded only for long-term energy efficiency gains,  










          and that any overpayment of incentives are repaid to consumers.

          The Commission indicates that in order to comply with the  
          requirements of the bill, it would have to reopen the proceeding  
          that established the goals and incentives for the 2009-2011  
          program cycle. The Commission also indicates that the bill would  
          require the utilities to renegotiate some existing contracts  
          with service providers. In order to oversee the revision of the  
          program requirements and changes to contracts, the Commission  
          estimates total costs of $384,000.