BILL ANALYSIS Ó
SB 35
Page 1
Date of Hearing: June 27, 2011
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Wesley Chesbro, Chair
SB 35 (Padilla) - As Amended: June 20, 2011
SENATE VOTE : 29-8 (not relevant)
SUBJECT : California Energy Research and Technology Act of 2011
SUMMARY : Repeals the California Energy Commission's (CEC)
Public Interest Energy Research Program (PIER) and Renewable
Energy Program (REP), as well as the "public goods charge"
collected from electric utility customers which funds these
programs and utility energy efficiency programs (which expires
on January 1, 2012 under current law). Establishes the
California Energy Research and Technology Program (CERT) for the
purpose of funding energy-related research, development, and
demonstration (RD&D), but provides no funding.
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 RD&D
(i.e., the "public goods charge").
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 the CEC at least $65.5 million per year to administer
the REP and at least $62.5 million per year to administer
PIER. Funds are allocated by the CEC according general
statutory guidelines and more specific CEC-developed
investment plans. REP funds support emerging and existing
renewable energy projects. PIER funds support investments in
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RD&D for energy technologies that provide tangible benefits to
the utility customers who fund the program. Collection of
ratepayer funds for these and other purposes, and the CEC's
authority to spend the funds it administers, is authorized
until 2012.
THIS BILL :
1)Repeals the statutes governing PIER and REP and repeals the
statute requiring collection of the public goods charge.
2)Establishes the CERT to be administered by the CEC for the
purpose of funding RD&D that may lead to technological
advancement and breakthroughs to overcome the barriers that
prevent achievement of the state's statutory energy goals.
3)Establishes a 17-member Coordinating Council composed of
designated state energy officials and utility representatives,
as well as consumer, environmental, university, and at-large
representatives.
4)Requires the Council to annually identify the technological
challenges that are the most significant barriers to achieving
the state's statutory energy goals and for which CERT funding
is most warranted, including energy storage, integrating
renewable energy into the electric grid, and forecasting the
availability of renewable energy.
5)Prohibits the CEC from awarding CERT funds for any purposes
except as provided in the bill or identified by the Council.
6)Requires the CEC to contract with an independent entity to
review the CERT program and report to the Legislature at an
unspecified date.
7)Sunsets CERT at an unspecified date.
FISCAL EFFECT : Unknown
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
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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 and public interest energy
RD&D. Prior to awarding any of the money collected from
ratepayers, the CEC was required to submit reports to the
Legislature describing the programs it would support and the
levels of support those programs would receive. This original
CEC investment plans were adopted in 1997 and have 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 and public interest RD&D.
2)Purpose of the bill. According to the author, "this bill
begins the conversation about the design and intent of green
research and other programs that will sunset at the end of
this year. Further amendments are anticipated as discussions
with the Legislature and other stakeholders progress."
The bill is presented as the Senate vehicle regarding the
public good charge. Like the Assembly vehicles, this bill may
be viewed as a "work in progress." However preliminary or
symbolic the language may be, the bill is provocative in that
it repeals the CEC's renewable energy and research programs
while proposing a replacement with no funding. If the
committee approves this bill as a vehicle for continuing
discussions regarding the public goods charge, the author and
the committee may wish to consider amendments to replace the
current provisions with more neutral language.
3)Related legislation.
AB 723 (Bradford) extends the public goods charge until 2020
and is pending in the Senate Governance and Finance Committee.
AB 1303 (Williams) extends PIER and REP until 2020 and is
pending in the Senate Energy, Utilities and Communications
Committee.
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4)Double referral. This bill has been double-referred to the
Utilities and Commerce Committee.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file
Opposition
None on file
Analysis Prepared by : Lawrence Lingbloom / NAT. RES. / (916)
319-2092