BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 2271 (Quirk) - Electricity: research programs: peer review
-----------------------------------------------------------------
| |
| |
| |
-----------------------------------------------------------------
|--------------------------------+--------------------------------|
| | |
|Version: June 13, 2016 |Policy Vote: E., U., & C. 6 - 2 |
| | |
|--------------------------------+--------------------------------|
| | |
|Urgency: No |Mandate: No |
| | |
|--------------------------------+--------------------------------|
| | |
|Hearing Date: August 8, 2016 |Consultant: Narisha Bonakdar |
| | |
-----------------------------------------------------------------
This bill meets the criteria for referral to the Suspense File.
Bill
Summary:1) AB 2271 requires the CPUC to establish a procedure for the
independent peer review of a research program if the program
will cost one million dollars or more, and requires that the
independent peer review is conducted in accordance with the
procedure.
Fiscal
Impact:
Approximately $361,000 (Utilities Reimbursement Account) for
staff positions to draft, release, and administer contracts
with independent research entities to continually provide
reviews of proposed research.
Approximately $250,000 per year on average, varying year to
year, for peer review contracts.
Background:1) 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
AB 2271 (Quirk) Page 1 of
?
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.
The CPUC does not require peer review of ratepayer-funded
research proposals. As evidence of the need for such review,
the author relays the story of the CPUC decision, in 2012, to
authorize ratepayer funding of research at Lawrence Livermore
National Lab (LLNL).
In 2012, the CPUC authorized the investor-owned electric
utilities (IOUs - PG&E, SCE, SDG&E) to enter into a five-year
research and development agreement with LLNL. The CPUC
authorized ratepayer funding of the 21st Century Energy Systems
(CES-21) program at costs of $30 million per year to be
collected by the IOUs and transferred to LLNL. The Utility
Reform Network and the then-named Division of Ratepayer
Advocates (DRA) both opposed the decision.
The CPUC identified that LLNL has expertise in supercomputing
facilities and analysis, which will be central to conducting the
research. In response to an inquiry from DRA, the utilities
stated that even though they were aware of other supercomputing
facilities within California, they had not contacted or
evaluated those facilities to determine if they would be
appropriate or cost-effective for the CES-21 program. However,
they also stated that such an evaluation would be made for
specific proposals to be funded by CES-21 by the CES-21 Board of
Directors.
Subsequent to the funding decision, the CPUC developed a set of
criteria that each funded project must adhere to, called the
Cooperative Research and Development Agreement. While the
criteria do not include "peer review" of proposals explicitly,
it is required that each proposal has the support of a majority
of the Board of Directors. The Board of Directors consists of
six members: three from academia or research institutions and
AB 2271 (Quirk) Page 2 of
?
three from the utilities.
The author contends the LLNL research funding proposal would
have benefitted from peer review and serves as justification for
the need to require peer review of research proposals. In
addition to the 2012 LLNL proposal, the CPUC approves tens of
million in ratepayer-funded research annually.
Proposed Law:
This bill:
1)Defines "research programs" as a program for the development
of novel and innovative processes that are proposed by
electrical corporations for approval by the CPUC and that
would be funded through the rates of ratepayers of the
electrical corporations.
2)Specifies that Research programs do not include programs that
are funded pursuant to the Public Interest Energy Research,
Demonstration, and Development Program.
3)Requires the CPUC to establish a procedure for the independent
peer review of a research program proposed by an electrical
corporation that will cost one million dollars or more.
4)Requires the independent peer review to be conducted in
accordance with the CPUC's procedures.
5)Specifies that eth bill does not apply to research program
that is directly reviewed and approved by the CPUC.
6)Requires the CPUC to make the review available on its website.
-- END --
AB 2271 (Quirk) Page 3 of
?