BILL ANALYSIS Ó
AB 723
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Date of Hearing: May 2, 2011
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Wesley Chesbro, Chair
AB 723 (Bradford) - As Introduced: February 17, 2011
SUBJECT : Energy: public goods charge
SUMMARY : Extends for four years, from January 1, 2012 to
January 1, 2016, (a) collection of a public goods charge from
electric utility customers to fund energy efficiency, renewable
energy, and energy research and (b) authorization for the
California Energy Commission (CEC) to spend funds collected for
renewable energy pursuant to its Renewable Energy Program (REP).
EXISTING LAW :
1)Requires electric utilities to collect until January 1, 2012 a
"nonbypassable" surcharge on bills based on electricity usage
to fund energy efficiency, renewable energy, and energy
research, development and demonstration (RD&D).
2)Establishes specific minimum annual collection amounts for the
three largest investor-owned utilities (Pacific Gas and
Electric, Southern California Edison and San Diego Gas and
Electric) and provides for adjustment according to the lesser
of sales growth or inflation:
a) $228 million for energy efficiency.
b) $65.5 million for renewable energy.
c) $62.5 million for RD&D.
3)Provides at least $65.5 million per year to the CEC to
administer the REP. The funds are allocated by the CEC to
support emerging and existing renewable energy projects
according general statutory guidelines and more specific
CEC-developed investment plans. Collection of ratepayer funds
for these and other purposes, and the CEC's authority to spend
the funds it administers, is authorized until 2012.
FISCAL EFFECT : Requires collection of at least $356 million
per year from PG&E, SCE and SDG&E customers, plus a proportional
amount from municipal electric utility customers, for four
years.
AB 723
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COMMENTS :
1)Background. As part of California's experiment with electric
deregulation, AB 1890 (Brulte), Chapter 854, Statutes of 1996,
required ratepayers to fund a variety of system reliability,
in-state benefit and low-income customer programs at specified
levels from 1998 through 2001. This funding was intended to
ensure that these "public goods" programs continued (at least
in the short term) in the restructured electric industry.
Among the public goods programs established by AB 1890 were
in-state operation and development of existing, new, and
emerging renewable energy sources. Prior to awarding any of
the money collected from ratepayers, the CEC was required to
submit a report to the Legislature describing the programs it
would support and the levels of support those programs would
receive. This original CEC investment plan was adopted in
1997 and has been extended twice since.
SB 1194 (Sher), Chapter 1050, Statutes of 2000, extended the
collection of a public goods charge from ratepayers until
2012 and again required the CEC to develop investment plans
for renewable energy as well as public interest RD&D.
2)Bill extends funding for RD&D, but doesn't authorize the CEC
to administer PIER, and conflicts with AB 1303. This bill
provides funding for RD&D, but doesn't authorize the CEC
authority to administer PIER. AB 1303 (Williams), also
pending in this committee, extends PIER and REP until 2020,
without providing funding. This bill would extend REP until
2016, the same program AB 1303 would extend until 2020.
3)Related legislation. In addition to AB 1303, SB 35 (Padilla)
and SB 410 (Wright), pending in the Senate Energy, Utilities
and Communications Committee, conflict with this bill. SB 35
would repeal the public goods charge, as well as the REP and
PIER programs, and create a new program. SB 410 would extend
the public goods charge, as well as the PIER program, until
2022.
4)Double referral. This bill passed out of the Assembly
Utilities and Commerce Committee on April 11, 2011 with a vote
of 10-0.
REGISTERED SUPPORT / OPPOSITION :
AB 723
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Support
California Biomass Energy Alliance
California League of Conservation Voters
Clean Power Campaign
Environmental Defense Fund
Los Angeles County Board of Supervisors
Natural Resources Defense Council
Nature Conservancy
Opposition
California Manufacturers and Technology Association
Analysis Prepared by : Lawrence Lingbloom / NAT. RES. / (916)
319-2092