BILL ANALYSIS Ó
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THIRD READING
Bill No: SB 35
Author: Padilla (D)
Amended: 5/31/11
Vote: 21
SENATE ENERGY, UTIL. & COMM. COMMITTEE : 10-0, 5/03/11
AYES: Padilla, Fuller, Berryhill, Corbett, DeSaulnier,
Pavley, Rubio, Simitian, Strickland, Wright
NO VOTE RECORDED: De León
SENATE APPROPRIATIONS COMMITTEE : 6-2, 5/26/11
AYES: Kehoe, Alquist, Lieu, Pavley, Price, Steinberg
NOES: Walters, Runner
NO VOTE RECORDED: Emmerson
SUBJECT : Energy: California Energy Research and
Technology Program Act of 2011
SOURCE : Author
DIGEST : This bill requires the California Energy
Commissions report covering the Public Interest Energy
Research, Demonstration, and Development program to be
submitted annually by January 10 instead of March 31. It
also requires the report to include information on the
extent to which research funds provided under the program
have facilitated the receipt of federal funding by award
recipients.
ANALYSIS :
CONTINUED
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Background
Natural Gas PIER Program
The CEC also administers, in tandem with the electric PIER
program, a public interest energy research program funded
by a surcharge on natural gas ratepayers at an annual level
of $24 million. AB 1002 (Wright, 2000) gave the CPUC
authority for the natural gas program, but the CPUC, by
decision, appointed the CEC to administer in it, although
the University of California also was considered a
potential administrator. The CPUC adopts an annual
resolution approving the CEC's award of natural gas
research funds. In the 2004 resolution, CPUC stated that
"after four years" it would assess the program, a review
the CPUC commenced in 2010 and is still ongoing.
Total Funds of $700 Million
Through 2010, the CEC had awarded nearly $700 million in
ratepayer funds for research under the electric and natural
gas PIER programs, which the CEC estimates has resulted in
billions of dollars in savings to ratepayers, particularly
from energy efficiency standards for buildings and
appliances to which PIER research contributed. CEC points
to, for example, $912 million in annual savings from
television standards, $90 million from external power
supply standards, and $5.4 million from residential furnace
fan standards. PIER funds also leverage other research
dollars, according to CEC, by providing critical matching
funds for recipients, averaging about $1.50 for every $1 in
PIER funds. The CEC also claims that existing funding for
RD&D is inadequate, pointing to 48 project proposals
totaling $30 million that were rejected in the last two
years for lack of funds even though they passed technical
merit and had potential to advance technologies and provide
public benefits.
Prior Reviews of PIER
SB 1038 (Sher, 2002) required an independent review of
PIER, which was conducted by the California Council on
Science and Technology. The council's final report in 2005
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recommended that PIER needed a clearly articulated
strategic plan with objectives and priorities for meeting
the state's future energy needs and that CEC should develop
a new governance structure, including an option for
administration outside of CEC. A 2009 Department of
Finance audit concluded that CEC had not adequately
responded to prior recommendations to improve PIER
governance and reduce overhead and administrative costs.
These issues also were addressed in hearings held by this
committee on August 10, 2010, and March 1, 2011.
This bill in its current form requires more information
relative to how the money from the federal government given
to award recipients is being used.
Related Legislation
SB 410 (Wright) extends sunset on public goods charge and
PIER for 10 years to 2022. Passed Senate Committee on
Energy, Utilities and Communications with a vote of 7-3 on
5/3/11 and is in Senate Appropriations.
AB 723 (Bradford) extends sunset on public goods charge and
PIER for four years to 2016. It passed the Assembly
Committee on Utilities and Commerce 10-0 and passed the
Assembly Committee on Natural Resources 6-2 and is in
Assembly Appropriations.
AB 1303 (Williams) extends the PIER program for eight years
until 2020. It passed the Assembly Committee on Utilities
and Commerce 10-0 and passed the Assembly Committee on
Natural Resources 6-3 and is in Assembly Appropriations.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
RM:rm 5/27/11 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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