BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     SB 350  


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          Date of Hearing:  August 19, 2015


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                                 Jimmy Gomez, Chair


          SB 350  
          (De León) - As Amended July 16, 2015


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          Urgency:  No  State Mandated Local Program:  YesReimbursable:   
          No


          SUMMARY:


          This bill establishes the Clean Energy and Pollution Reduction  
          Act of 2015 to direct a 50% reduction in motor vehicle petroleum  
          use, a 50% increase sales of renewable electricity, and a  








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          doubling of the energy efficiency in buildings, all to be  
          achieved by 2030.


          FISCAL EFFECT:


          1)Ongoing annual costs of $5.6 million for staffing and one-time  
            costs of $3.5 million in contracts (GF and special fund) for  
            the California Energy Commission (CEC) to implement the  
            requirements of the bill.


          2)Ongoing annual costs of $1.65 million for personnel services  
            and $2.3 million in operating expenses (special fund) for the  
            Public Utilities Commission (PUC) to fulfill the requirements  
            of the bill.


          3)Ongoing annual costs of up to $1.25 million (various special  
            funds) for the Air Resources Board (ARB) to implement the  
            petroleum reduction goal.


          4)Ongoing annual costs of up to $275,000 (various special funds)  
            for ARB to develop policies to remove regulatory disincentives  
            and facilitate Green House Gas (GHG) reductions through  
            transportation electrification.


          5)Unknown costs pressures to current programs from various  
            special funds to achieve a 50% petroleum reduction.


          6)Unknown ratepayer costs to the GF and various special funds to  
            the state, as an electricity user and ratepayer to the extent  
            electricity prices are affected by increasing the RPS  
            standard.









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          7)Unknown costs pressures (special fund) for the PUC and CEC to  
            review renewable integration needs and consider grid  
            integration in RPS implementation proceedings.


          COMMENTS:


          1)Purpose.  According to the author, this bill enacts policies  
            that build on our economic growth by strengthening incentives  
            for energy efficiency and clean energy technology. The Golden  
            State Standards are as follows: 

            50% less petroleum use; 


            50% of electricity coming from renewable sources; and  
            50% better efficiency in our buildings.

            The author contends these standards will send a strong signal  
            to California's businesses and drive innovation and investment  
            resulting in more jobs and state revenue.

            This bill codifies goals announced by the Governor in January  
            in his inaugural address.

          2)Background.  Current law requires the ARB to adopt and  
            implement motor vehicle emission standards, in-use performance  
            standards, and motor vehicle fuel specifications for the  
            control of air contaminants and sources of air pollution.


            The CEC is required to develop and implement a comprehensive  
            program to achieve greater energy savings in California's  
            existing residential and nonresidential building stock.


            All retail sellers of electricity - investor-owned utilities  








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            (IOU), community choice aggregators (CCAs), and energy service  
            providers (ESPs) - and publicly-owned utilities (POU) are  
            required to increase purchases of renewable energy such that  
            at least 33 percent of retail sales are procured from  
            renewable energy resources by December 31, 2020. This is known  
            as the Renewable Portfolio Standard (RPS).  The PUC is  
            explicitly authorized to require retail sellers of electricity  
            to procure renewable energy resources in excess of the  
            33-percent RPS requirement.  The PUC oversees RPS compliance  
            with IOUs while the CEC oversees POUs.


            Existing law also establishes the Electric Program Investment  
            Charge (EPIC) Fund, to fund projects that benefit electricity  
            ratepayers and lead to technological advancement and  
            breakthroughs to overcome the barriers that prevent the  
            achievement of the state's statutory energy goals.


          3)Stakeholder Discussions Continue.  The author's office  
            continues to regularly meet with the numerous stakeholder  
            groups on the detailed provisions of this bill.  Topics under  
            discussion include but are not limited to: 1) addressing RPS  
            concerns of small publicly owned utilities; 2) revisions to  
            transportation electrification provisions; 3) revisions to the  
            existing RPS framework; 4) ensuring the fair treatment of all  
            retail sellers in RPS enforcement; 5) revising provisions  
            within the existing RPS regarding banking, and short and long  
            term contracts; and 6) adjustments to the petroleum reduction  
            provisions.




          Analysis Prepared by:Jennifer Galehouse / APPR. / (916)  
          319-2081











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