BILL ANALYSIS Ó AB 2271 Page 1 ASSEMBLY THIRD READING AB 2271 (Quirk) As Amended March 17, 2016 Majority vote ------------------------------------------------------------------ |Committee |Votes|Ayes |Noes | | | | | | | | | | | | | | | | |----------------+-----+----------------------+--------------------| |Utilities |14-0 |Gatto, Patterson, | | | | |Burke, Chávez, Dahle, | | | | |Eggman, Cristina | | | | |Garcia, | | | | | | | | | | | | | | |Eduardo Garcia, | | | | |Hadley, | | | | | | | | | | | | | | |Roger Hernández, | | | | |Obernolte, Quirk, | | | | |Santiago, Williams | | | | | | | |----------------+-----+----------------------+--------------------| |Appropriations |20-0 |Gonzalez, Bigelow, | | | | |Bloom, Bonilla, | | | | |Bonta, Calderon, | | | | |Chang, Daly, Eggman, | | | | |Gallagher, Eduardo | | AB 2271 Page 2 | | |Garcia, Roger | | | | |Hernández, Holden, | | | | |Jones, Obernolte, | | | | |Quirk, Santiago, | | | | |Wagner, Weber, Wood | | | | | | | | | | | | ------------------------------------------------------------------ SUMMARY: Requires the California Public Utilities Commission (CPUC) to establish a procedure for the independent peer review of research programs proposed by an electrical corporation. Specifically, this bill: 1)Requires the CPUC to establish a procedure for independent peer review of research programs proposed by an electrical corporation to be conducted upon the CPUC's receipt of a proposed research program. 2)Requires the CPUC to make the results of the review, upon approval of the research program, available to the public on its website. 3)Specifies research programs do not include programs funded pursuant to the Public Interest Energy Research, Demonstration, and Development Program or the Electric Program Investment Charge program. FISCAL EFFECT: According to the Assembly Appropriations Committee: 1)The CPUC will require additional permanent staff, at the cost of about $390,000 per year, to identify proposals, administer AB 2271 Page 3 contracts with independent research entities, and ensure researchers do not have conflicts of interest. Additionally, the CPUC estimates expert review contract costs to be $250,000 per year for five years. 2)California Energy Commission and the Air Resources Board costs are minor and absorbable. COMMENTS: 1)Purpose: According to the author, it is essential to have the proper evaluation of the scientific and technical merits of the research the CPUC approves. This bill will require an independent peer review to be conducted once the CPUC receives a proposed program. This bill will also require the results of the review to be posted on the CPUC's Web site. Research proposals likely subject to this requirement are those conducted pursuant to many proceedings, including those addressing electric vehicles, demand response, distribution resource planning, and long term procurement planning. 2)Background: CPUC-regulated electrical corporations conduct and administer research. These research programs are often included in CPUC rate cases to recover costs through rates. The CPUC may allow electrical corporations to use ratepayer funds if it determines investments made with those funds will be in the public interest and are just and reasonable. Between 2009 and 2014, the CPUC approved about $400 million in ratepayer funds for research and development. The majority of these funds were approved without review by experts in the field of research being funded, because the CPUC does not have such a process in place. Some funds have been awarded to sole-source projects. By requiring an independent third-party review, this bill will increase the quality of research performed, and provide AB 2271 Page 4 additional credibility to the research and funding process. Further transparency will be added by publishing the results of the review. Analysis Prepared by: Darion Johnston / U. & C. / (916) 319-2083FN: 0003221