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.