BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 2271


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          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    |                    |








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          |                |     |Garcia, Roger         |                    |
          |                |     |Hernández, Holden,    |                    |
          |                |     |Jones, Obernolte,     |                    |
          |                |     |Quirk, Santiago,      |                    |
          |                |     |Wagner, Weber, Wood   |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
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          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  








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            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  








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            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