BILL ANALYSIS                                                                                                                                                                                                    Ó




                   Senate Appropriations Committee Fiscal Summary
                            Senator Kevin de León, Chair


          AB 628 (Gorell) - Energy management plans for harbor and port  
          districts. 
          
          Amended: July 10, 2013          Policy Vote: EU&C 9-0
          Urgency: No                     Mandate: No
          Hearing Date: August 12, 2013                     Consultant:  
          Marie Liu     
          
          This bill does not meet the criteria for referral to the  
          Suspense File.
          
          
          Bill Summary: AB 628 would provide a framework for a harbor and  
          port district (district) develop an energy management plan, in  
          collaboration with an electrical or gas corporation, in order to  
          reduce air emissions and promote economic development of the  
          district. 

          Fiscal Impact: >
              Unknown

          Background: Existing law requires the California Public  
          Utilities Commission (CPUC) to authorize investor-owned  
          utilities (IOUs) to engage in economic development programs.

          The Infrastructure and Economic Development Bank (I-Bank)  
          supports economic development through its authority to issue  
          bonds, make loans, and provide credit enhancements. I-Bank  
          issues tax-exempt private activity industrial development  
          conduit bonds, where a manufacturer that meets minimum credit  
          standards applies to the I-Bank to issue bonds on its behalf,  
          among other forms of financial assistance. I-Bank much receive  
          an allocation under the state's cap to issue tax-exempt private  
          activity bonds, set in federal law, as well as comply with  
          federal law's limit on eligible uses. The I-Bank is within the  
          Governor's Office of Business and Economic Development (Go Biz)

          The California Alternative Energy and Advanced Transportation  
          Financing Authority (CAEATFA) provides financing through conduit  
          or revenue bonds, loan guarantees, loan loss reserves, and a  
          sales and use tax exemption for facilities that use alternative  
          energy sources and technologies and advanced manufacturing.  








          AB 628 (Gorell)
          Page 1


          CAEATFA's board is composed of the Treasurer, Controller,  
          Director of Finance, Chairperson of the Energy Commission, and  
          President of the CPUC. CAEATFA is bound by state and federal law  
          regarding tax-exempt private activity bonds, similar to the  
          I-Bank.

          The California Maritime Infrastructure Bank and Authority  
          (CMIBA) is a joint powers agency that was formed for the purpose  
          of establishing an infrastructure fund for pooled financing of  
          port or harbor infrastructure. The CMIBA can make loans,  
          purchase bonds, enhance the credit of an agency for the purpose  
          of financing port or harbor infrastructure. 

          Proposed Law: This bill would provide a framework for a district  
          to collaborate with a utility to develop an energy management  
          plan to assist with air emission reductions and economic  
          development. At a minimum, the energy management plan would be  
          required to include elements including an assessment of current  
          energy consumption, an electric or natural gas load forecast,  
          consideration of the potential role of distributed generation,  
          an assessment of technologies that reduce energy consumption,  
          and proposed actions to achieve 1-year, 3-year, 5-year, 10-year,  
          and 15-year objectivities for implementing the plan. The plan  
          must also include proposed methods to fund the activities  
          included in the plan, including funding from CAEATFA, the  
          I-Bank, and the CMIBA.

          The CPUC would be required to encourage utilities to participate  
          with local agencies in developing and implementing energy  
          management plans for energy management areas. The CPUC would  
          also be authorized to offer technical assistance in the  
          preparation of the energy management plan.

          This bill would explicitly make a project to promote economic  
          development in harbor and port districts, which implements an  
          energy management plan, eligible for funding from the I-Bank.

          Related Legislation: AB 1079 (Bradford) would provide a very  
          similar framework for an energy management plan prepared for an  
          energy management area. AB 1079 will also be heard by the Senate  
          Appropriations Committee on August 12, 2013.

          Staff Comments: This bill explicitly makes eligible projects  
          consistent with the energy management plan eligible for funding  








          AB 628 (Gorell)
          Page 2


          from the I-Bank. However, the I-Bank is already authorized to  
          issue bonds for financing economic development projects. 

          Under this bill, the energy management plan must include a  
          proposal on how the projects under the plan will be funded and  
          requires the plan to include funding from the I-Bank, CAEATFA,  
          and the CMIBA for financial support. The author did not intend  
          to require that the plan include applications for funding from  
          these state agencies and proposes an amendment to strike  
          reference to the I-Bank, CAEATFA, and the CMIBA. These  
          amendments remove any cost pressures resulting from increased  
          applications to these programs. Staff notes that projects  
          consistent with the energy management plans are already eligible  
          for I-Bank, CAEATFA, and CMIBA under existing law. 

          To the extent that energy management plans are developed by  
          districts, the plans might result in additional information that  
          would need to be considered by the CPUC in future proceedings on  
          issues such as energy-efficiency, demand response, or  
          distributed generation portfolio. This additional data for the  
          CPUC's consideration may result in up to 0.5 of a Public  
          Utilities Regulatory Analyst III at an annual cost of  
          approximately $50,000 from the Public Utilities Commission  
          Utilities Reimbursement Account. 

          Proposed Author Amendments: 
             1.   Delete Section 2 - page 3, line 13 through 21  
               inclusively
             2.   On page 5, beginning on line 26, amend section  
               25990(c)(8) as follows:
           (8) Proposed methods to fund the activities included in the  
          plan,  which may include   including  funding through utility  
          ratepayer-funded programs and  financing through the California  
          Infrastructure and Economic Developmental Bank established  
          pursuant Division 1 (commencing with Section 63000) of Title 6.7  
          of the Government Code, the California Alternative Energy and  
          Advanced Transportation Financing Authority Act (Division 16  
          (commencing with Section 26000)), or the California Maritime  
          Infrastructure Bank and Authority funded pursuant to Part 1  
          (commencing with Section 1690) of Division 6 of the Harbors and  
          Navigation Code,  bond measures offered by a port  , or other  
          appropriate sources   .  .

             3.   On page 6, on lines 20-22, delete "district and shall  








          AB 628 (Gorell)
          Page 3


               consider applying to the California Infrastructure and  
               Economic Development Bank for financial support of these  
               projects." and insert "district."