BILL ANALYSIS                                                                                                                                                                                                    


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                                 THIRD READING

          Bill No:  SB 1340
          Author:   Kehoe (D)
          Amended:  4/22/10
          Vote:     21

          AYES:  Lowenthal, DeSaulnier, Kehoe, Oropeza, Pavley,  
          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  

           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  


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           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.


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          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  

          5. Infrastructure projects that promote alternative and  
             renewable fuel infrastructure development for existing  
             fleets, public transit, and existing transportation  

          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  


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          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       

          * Alternative and Renewable Fuel and Vehicle Technology  

           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  


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          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

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