BILL ANALYSIS Ó Senate Appropriations Committee Fiscal Summary Senator Kevin de León, Chair AB 1257 (Bocanegra) - Energy: State Energy Resources Conservation and Development Commission: natural gas. Amended: June 25, 2013 Policy Vote: EU&C8-0 Urgency: No Mandate: No Hearing Date: August 12, 2013 Consultant: Marie Liu This bill meets the criteria for referral to the Suspense File. Bill Summary: AB 1257 would require the California Energy Commission (CEC) to conduct an analysis every four years of natural gas use and consider its potential in regards to various aspects of the energy industry and including an analysis of economic and environmental costs and impacts. The report would also identify both near- and long-term policy strategies to maximize the benefits of natural gas. Fiscal Impact: On-going costs of at least $140,000 from the Energy Resources Programs Account (General) for developing the information required in a quadrennial report. Background: The CEC is required under existing law to conduct assessments and forecasts of all aspects of the energy industry including supply, production, transportation, delivery and distribution, demand and prices. The CEC uses these assessments and forecasts to develop energy policies that conserve resources, protect the environment, ensure energy reliability, enhance the state's economy, and protect public health and safety. The CEC is required to adopt and publish a comprehensive assessment of energy markets, trends, forecasts, and impacts on the public and the environment every two years in the Integrated Energy Policy Report (IPER). Proposed Law: This bill would require the CEC to report on strategies to maximize the benefits of natural gas as an energy source, including for transportation, electricity generations, and heating. The report would also be required to include recommendations for long-term policies to ensure adequate infrastructure and storage for natural gas to meet future natural gas demands. This report shall be included into the AB 1257 (Bocanegra) Page 1 IPER. In developing the report, the CEC would be required to consult with the Public Utilities Commission, the California Independent System Operator, the State Air Resources Board, and the Division of Oil, Gas, and Geothermal Resources within the Department of Conservation. Staff Comments: This bill would require the CEC to expand its analysis of natural gas for the IPER. If the CEC is able to develop the information for the report in house, the CEC anticipates incurring approximately $140,000 annually for additional analysis. However, if the CEC needs to contract out the study, these costs can rise to approximately $300,000 annually. The agencies that would have to be consulted by the CEC under this bill would all incur minor and absorbable costs for their involvement with the study. Recommended Amendments: Staff recommends a technical amendment to correct the reference to the Division of Oil, Gas, and Geothermal Resources within the Department of Conservation.