BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
AB 628 (Gorell) - Energy management plans for harbor and port
districts.
Amended: August 12, 2013 Policy Vote: EU&C 9-0
Urgency: No Mandate: No
Hearing Date: August 30, 2013 Consultant:
Marie Liu
SUSPENSE FILE.
Bill Summary: AB 628 would provide a framework for a harbor and
port district (district) to 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:
Annual costs up to $50,000 from the Public Utilities
Reimbursement Account (special) to the CPUC to incorporate
information from the energy management plans into broader
CPUC considerations.
Tens to hundreds of thousands in cost pressures to the
state for financing assistance from the Infrastructure and
Economic Development Bank and the California Alternative
Energy and Advanced Transportation Financing Authority.
Background: Existing law requires the California Public
Utilities Commission (CPUC) to authorize investor-owned
utilities (IOUs) to engage in economic development programs and
further permits the recovery of associated costs from ratepayers
(PUC �740.4)
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 must receive
an allocation under the state's bond cap to issue tax-exempt
private activity bonds, set in federal law, and must comply with
AB 628 (Gorell)
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the federal law 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.
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 a harbor and port district, which implements an
energy management plan, eligible for funding from the I-Bank.
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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: 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.
The author envisions utilities using energy management plans as
a way to establish special programs, such as fixed rates, for
the ports and keep the subsidy of such special programs within
the same class of ratepayers. Staff notes that language
regarding the CPUC's approval of energy management plans if the
plan involves special programs was deleted as part of this
bill's hearing in the Senate Energy, Utilities, and Commerce
Committee. There is no language in the bill that requires CPUC
approval of these plans.
This bill explicitly makes eligible projects consistent with the
energy management plan eligible for funding 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. Depending on the scope of
the projects as well as the type of assistance received from
each of these entities, the impact to the state can be in the
tens to hundreds of thousands of dollars in lost GF revenues and
cost pressures on the capped funding programs. According to the
author's staff, the intent was to encourage consideration of
funding from these sources, not to require funding.
Proposed Author Amendments: The author has proposed to delete
references to the state funding entities and to remove recent
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amendments regarding independent energy providers as these are
newly defined entities with uncertain implications.