BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 1340| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: SB 1340 Author: Kehoe (D) Amended: 4/22/10 Vote: 21 SENATE TRANSPORTATION & HOUSING COMMITTEE : 6-1, 4/6/10 AYES: Lowenthal, DeSaulnier, Kehoe, Oropeza, Pavley, Simitian NOES: Huff NO VOTE RECORDED: Ashburn, Harman SENATE ENV. QUALITY COMMITTEE : 5-0, 4/19/10 AYES: Simitian, Corbett, Hancock, Lowenthal, Pavley NO VOTE RECORDED: Runner, Strickland SENATE APPROPRIATIONS COMMITTEE : 7-1, 5/10/10 AYES: Kehoe, Cox, Alquist, Leno, Price, Wolk, Yee NOES: Walters NO VOTE RECORDED: Corbett, Denham, Wyland SUBJECT : Energy: alternative fuels and vehicle technologies SOURCE : Author DIGEST : This bill makes the costs of homeowners electrical work needed to fuel electric vehicles eligible for subsides under the California Energy Commissions Alternative and Renewable Fuel and Vehicle Technology Program. CONTINUED SB 1340 Page 2 ANALYSIS : AB 118 (N??ez), Chapter 750, Statutes of 2007, created the Alternative and Renewable Fuel and Vehicle Technology Program, which the California Energy Commission (CEC) administers to provide, upon appropriation by the Legislature, grants, revolving loans, loan guarantees, loans, or other appropriate funding measures to public agencies, vehicle consortia, businesses, consumers, recreational boaters, and academic institutions to develop and deploy innovative technologies that transform California fuel and vehicle types to help attain the state's climate change policies. Funding of approximately $120 million annually for this program comes from additional fees on vehicle registrations, special identification plates for various vehicles, and vessel registrations, plus $10 million annually from the Public Interest Research, Development, and Demonstration Fund, which is derived from a portion of electric utility rates. The CEC, through a competitive process, allocates these funds to alternative fuel and vehicle technology projects. To set priorities for the allocation of funds, the CEC must develop an investment plan in consultation with a wide array of stakeholders. The CEC adopted its first investment plan at its April 22, 2009 meeting. It is now in the process of updating that plan for 2010, which the CEC plans to adopt in the summer. Due to some borrowing of AB 118 funds and the supplemental funds that the American Recovery and Reinvestment Act (ARRA), the federal stimulus program) provides, last year the CEC awarded only about $57 million to alternative fuel and vehicle technology projects. Among the ARRA- and AB 118-funded projects is the installation of over four thousand new electric vehicle charging stations. Existing law makes the following projects eligible for funding under the Alternative and Renewable Fuel and Vehicle Technology Program: 1. Alternative and renewable fuel infrastructure, fueling stations, and equipment. SB 1340 Page 3 2. Projects to develop and improve vehicle technology that provide for better fuel efficiency and lower greenhouse gas emissions. 3. Alternative and renewable fuel projects to develop, improve, demonstrate, deploy, produce, and commercialize alternative and renewable fuels, plus reduce the overall carbon footprint of these fuels. 4. Vehicle retrofit projects to create higher fuel efficiencies. 5. Infrastructure projects that promote alternative and renewable fuel infrastructure development for existing fleets, public transit, and existing transportation corridors. 6. Workforce training programs related to alternative fuels and vehicle technology. 7. Block grants administered by not-for-profit technology consortia for specified purposes. 8. Analyses and assessments performed by state agencies to determine the impacts of increasing the use of low-carbon transportation fuels and technologies. This bill adds to the projects that are eligible for funding under the alternative fuel and vehicle technology program from the CEC "a program that provides funding for homeowners who purchase an electric vehicle to offset costs associated with modifying electrical sources to include a residential plug-in electric vehicle charging station." In its recent report, Climate Change Challenges, Vehicle Emissions and Public Health in California , the Public Policy Institute of California concludes that increasing the use of battery-electric vehicles provides the greatest public health benefit per unit of greenhouse gas emission reduction" among the possible alternative fueling and vehicle technologies on the horizon. The report also notes, however, that electric vehicles involve "high cost and uncertainty" because they "depend on technological SB 1340 Page 4 breakthroughs and broader market penetration to reduce cost and meet performance targets." FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No According to the Senate Appropriations Committee analysis: Fiscal Impact (in thousands) Major Provisions 2010-11 2011-12 2012-13 Fund Developing grant criteria Up to $140 Special* * Alternative and Renewable Fuel and Vehicle Technology Fund. SUPPORT : (Verified 5/12/10) California Air Pollution Control Officer's Association Bay Area Quality Management District Nissan North America Sierra Club California Southern California Edison ARGUMENTS IN SUPPORT : The author's office notes that state policies on greenhouse gas reductions and clean alternative fuels and technologies currently emphasize the importance of electric vehicle technology, and that using ARRA funds the CEC is already actively engaged in upgrading over 4,000 previous electric vehicle charging stations throughout the state. Additionally, the U.S. Department of Energy has awarded contracts nationwide under ARRA that include funding for in-home and public charging stations. The author's office also points out that major auto manufacturers will be introducing new electric vehicles and plug-in electric vehicles in the fall of 2010 and early 2011, and as consumers seek to purchase these vehicles many will require electrical improvements at their homes. Costs for these improvements can range from a few hundred dollars SB 1340 Page 5 to several thousand dollars. Despite the air quality and energy efficiency benefits of the technology, many potential electric vehicle purchasers may be dissuaded from buying an electric-drive vehicle if it additionally requires hundreds of dollars of initial costs at their homes. This bill gives clear legislative authority for the CEC to design an AB 118-funded program that helps to off-set these costs. JJA:do 5/12/10 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END ****