BILL ANALYSIS                                                                                                                                                                                                    Ó

          |SENATE RULES COMMITTEE            |                        SB 350|
          |Office of Senate Floor Analyses   |                              |
          |(916) 651-1520    Fax: (916)      |                              |
          |327-4478                          |                              |

                                UNFINISHED BUSINESS 

          Bill No:  SB 350
          Author:   De León (D) and Leno (D), et al.
          Amended:  9/11/15  
          Vote:     21  

           SENATE ENERGY, U. & C. COMMITTEE:  8-3, 4/7/15
           AYES:  Hueso, Hertzberg, Hill, Lara, Leyva, McGuire, Pavley,  
           NOES:  Fuller, Cannella, Morrell

           AYES:  Wieckowski, Hill, Jackson, Leno, Pavley
           NOES:  Gaines, Bates

           AYES:  Lara, Beall, Hill, Leyva, Mendoza
           NOES:  Bates, Nielsen

           SENATE FLOOR:  24-14, 6/3/15
           AYES:  Allen, Beall, Block, De León, Glazer, Hall, Hancock,  
            Hernandez, Hertzberg, Hill, Hueso, Jackson, Lara, Leno, Leyva,  
            Liu, McGuire, Mendoza, Mitchell, Monning, Pan, Pavley,  
            Wieckowski, Wolk
           NOES:  Anderson, Bates, Berryhill, Cannella, Fuller, Gaines,  
            Galgiani, Huff, Moorlach, Morrell, Nguyen, Runner, Stone,  
           NO VOTE RECORDED:  Nielsen, Roth

           ASSEMBLY FLOOR:  Not available

           SUBJECT:   Clean Energy and Pollution Reduction Act of 2015

          SOURCE:    Author


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                                                                    Page  2

          DIGEST:  This bill enacts the "Clean Energy and Pollution  
          Reduction Act of 2015," which establishes targets to increase  
          retail sales of renewable electricity to 50 percent by 2030 and  
          double the energy efficiency savings in electricity and natural  
          gas end uses by 2030.

          Assembly Amendments remove petroleum reduction goals in their  
          entirety; remove a requirement that the Air Resources Board  
          (ARB) develop an integrated action plan to improve freight  
          efficiency; direct the ARB to adopt measures to remove  
          disincentives to utilities and service providers from achieving  
          greenhouse gas emissions reductions from other sectors through  
          transportation electrification; deem most types of work on the  
          electric transmission system located in California as a public  
          works project; require state agencies to complete studies on  
          barriers to solar photovoltaic generation and to access to  
          renewable energy by low-income customers, to contracting  
          opportunities for local small businesses in disadvantaged  
          communities, and to low-income customer ownership of  
          zero-emission and near-zero-emission vehicles; require the  
          California Public Utilities Commission (CPUC) to enforce  
          performance standards for energy efficiency measures; require a  
          local publicly owned electric utility with an annual electrical  
          demand exceeding 700 gigawatt hours to adopt an integrated  
          resource plan; and establish a process by which the California  
          Independent System Operator (CAISO) evolves into a regional  

          Existing law:

          1) Directs the CEC to continually assess energy consumption  
             trends and to analyze the social, economic, and environmental  
             consequences of these trends; carry out, energy conservation  
             measures; and recommend to the governor and the Legislature  
             new and expanded energy conservation measures.  (Public  
             Resources Code §25200 et seq.)


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                                                                    Page  3

          2) Requires the CEC to develop and implement a comprehensive  
             program to achieve greater energy savings in California's  
             existing residential and nonresidential building stock.   
             (Public Resources Code §25943 et seq.)  

          3) Requires retail sellers of electricity - investor-owned  
             utilities (IOU), community choice aggregators (CCAs), and  
             energy service providers (ESPs) - and publicly owned  
             utilities (POU) 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 CPUC  
             establishes the RPS for retail sellers and ensures they  
             progress in achieving it, and levies penalties for failure.   
             The governing board of each POU establishes its own RPS.  The  
             CEC may issue a notice of violation against a POU for failure  
             the adequately progress in meeting RPS targets and refer the  
             POU to the ARB, which may assess penalties against it.  The  
             RPS provides numerous cost containment provisions and  
             exceptions to compliance obligations.  (Public Utilities Code  
             §399.11 et seq.)

          4) Establishes the CAISO, comprised of five board members  
             appointed by the governor and subject to Senate confirmation,  
             and requires it to manage the transmission grid and related  
             energy markets and make the most efficient use of available  
             energy resources including energy, capacity, ancillary  
             services, and demand bid into markets administered by the  
             CAISO.  (Public Utilities Code §345.5)

          This bill:

          1) Establishes an RPS target of 50 percent by December 31, 2030,  
             and thereafter for retail sellers and POUs, including interim  
             targets of 40 percent by the end of the 2021-2024 compliance  
             period, 45 percent by the end of the 2025-2027 compliance  
             period, and 50 percent by the end of the 2028-2030 compliance  

          2) Specifies that costs shifting cannot occur between customers  


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                                                                    Page  4

             of electrical corporations and CCAs or ESPs and requires the  
             CPUC to ensure that departing load does not experience cost  
             increase as a result in an allocation of costs not incurred  
             on behalf of departing load.

          3) Includes the following provisions in furtherance of doubling  
             the energy efficiency savings in electricity and natural gas  
             end uses by 2030:

              a)    Directs CEC to adopt an update to the AB 758 program,  
                by January 1, 2017 and every three years thereafter.
              b)    Defines energy savings and end uses.
              c)    Directs the CEC to specify energy efficiency targets  
                to meet the goal, and specifies programs that may be used  
                to achieve the goal.
              d)    Specifies how the goals will be measured and counted;  
                makes clarifying changes.
              e)    Requires assessments of the effects of energy  
                efficiency on electricity demand statewide and locally,  
                hourly, and seasonally.
              f)    Directs the CPUC to authorize energy efficiency  
                programs to meet the 50 percent energy efficiency goal.
              g)    Specifies CPUC energy efficiency procurement and  
                reporting requirements.
              h)    Directs POUs to meet the energy efficiency targets  
                specified by the CEC.
              i)    Directs the CEC to establish consumer protection  
                guidelines for energy efficiency products, and directs the  
                CEC to promote greater project penetration in  
                disadvantaged communities, and to use workforce  
                development and job training for residents in  
                disadvantaged communities.
              j)    Directs the CEC to evaluate "negative therm  
                interaction" effects generated as a result of electricity  
                efficiency improvements.

          4) Requires ARB to identify and adopt appropriate policies to  
             remove regulatory disincentives facing retail sellers from  
             facilitating the achievement of greenhouse gas (GHG) emission  


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                                                                    Page  5

             reductions in other sectors through increased investments in  
             transportation electrification, including an allocation of  
             GHG emissions allowances to retail sellers to account for  
             increased emissions in the electric sector from  
             transportation electrification.

          5) Requires the CPUC, in consultation with the ARB and CEC, to  
             direct IOUs to propose multiyear programs and investments to  
             accelerate widespread transportation electrification to  
             reduce dependence on petroleum, meet air quality standards,  
             achieve the goals set forth in the Charge Ahead California  
             Initiative, and reduce emissions of greenhouse gases to 40  
             percent below 1990 levels by 2030 and to 80 percent below  
             1990 levels by 2050.  Requires the CPUC to approve programs  
             and investments that deploy charging infrastructure as  
             distribution system costs.

          6) Requires the CPUC and CEC to take specific actions in  
             furtherance of meeting the state's clean energy and pollution  
             reduction objectives.
          7) Requires the CPUC to permit community choice aggregators  
             (CCAs) to submit proposals for satisfying their portion of  
             the renewable integration need.

          8) Requires the CPUC to adopt a process for IOUs, CCAs, and  
             electric service providers (ESPs) to file an integrated  
             resource plans.

          9) Requires locally owned public utilities to adopt IRPs,  
             subject to review by the CEC.

          10)Requires the CAISO to prepare proposed governance  
             modifications to facilitate the transformation of the CAISO  
             into a regional organization

          11)Requires the CEC to study barriers for low-income customers  
             to access solar photovoltaic, other renewable energy, energy  


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                                                                    Page  6

             efficiency, and weatherization investments.

          12)Requires ARB to study barriers for low-income customers to  
             access zero-emission and near zero-emission transportation  

          13)Amends the public works provision of the Labor Code to  
             specify that construction, alteration, demolition,  
             installation, or repair work on the electric transmission  
             system located in California constitutes a public works  
             project, subjecting these projects to prevailing wage.
           State efforts to address environmental effects of energy use.   
          In California, the energy sector, broadly defined, accounts for  
          more than 85 percent of greenhouse gas emissions. The two  
          largest sources of California's greenhouse gases are  
          transportation, at 39 percent, and electricity production, at 21  
          percent.[ 2013 Integrated Energy Policy Report  
          00-2013-001-CMF.pdf)]  Accordingly, the state's existing clean  
          energy and climate change programs focus on the energy sector in  
          general and the transportation and electricity sectors  

          Principal among those programs are the California Global Warming  
          Solutions Act of 2006 (more commonly known as "AB 32"), which  
          requires a reduction of the state's greenhouse gas emissions to  
          1990 levels by 2020, and the RPS, which requires the 33 percent  
          of the state's electricity come from renewable resources by  
          2020.  AB 32 tasks the ARB with developing a plan of measures  
          that reduce greenhouse gas emission levels, to be updated every  
          five years.  To that end, ARB, in 2008, adopted a scoping plan  
          that includes regulatory and market-based measures applicable to  
          the state's major economic sectors.  Among the regulatory  
          measures included in the initial scoping plan were numerous  
          energy efficiency measures, measures to encourage the  
          development and adoption of alternative fuels, and a 33 percent  
          RPS.  In 2014, ARB released an update to its scoping plan. The  
          ARB approved its first update to the scoping plan in May of  
          2014, which shows that the state has reduced its overall  


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                                                                    Page  7

          emissions of greenhouse gases since passage of AB 32.

          The Legislature approved the statutory RPS program in 2011 with  
          the passage of SB 2 x1 (Simitian, Chapter 1).  Statute directs  
          the CPUC to establish the RPS for retail sellers and ensure they  
          progress in achieving it, levying penalties for failure.  The  
          governing board of each POU establishes its own RPS.  The CEC  
          may issue a notice of violation against a POU for failure the  
          adequately progress in meeting RPS targets and refer the POU to  
          the ARB, which may assess penalties against it.  The state's  
          electric utilities report they are on track to meet, or exceed,  
          the RPS goals.  

          Other state programs directly address energy efficiency.  The  
          state's loading order, established by the energy agencies in  
          2003, calls for meeting new electricity needs first with  
          efficiency and demand response, followed by renewable energy and  
          distributed generation, and then with fossil generation. [2003  
          Energy Action Plan  
          AN.PDF)].  Under statute guidelines, the CPUC authorizes IOU  
          spending for all available energy efficiency that is cost  
          effective, reliable and feasible.  In recent years the CPUC has  
          authorized close to $1 billion per year in energy efficiency  
          spending to meet this mandate based on feasibility studies and  
          the record developed in CPUC's energy efficiency proceedings.   
          Since 1977, the CEC, acting under the broad authority provided  
          to it under the Warren-Alquist Act, has set energy efficiency  
          standards for appliances and new buildings; many credit these  
          standards, in part, with keeping California's per-capita  
          electricity consumption flat over the past three decades.  [See,  
          for example,  
          way_for.html] Further, CEC, acting according to statutory  
          mandate, recently released a draft plan to achieve  
          cost-effective energy savings in California's existing  
          residential and nonresidential buildings, which, generally, are  
          not subject to CEC's building efficiency standards.  [Existing  
          Buildings Energy Efficiency Action Plan - Draft  

          Building upon existing structure to create new "Golden  


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                                                                    Page  8

          Standards".  In his 2015 State-of-the-State speech, Governor  
          Brown announced three ambitious new energy goals that would take  
          state clean energy policy beyond 2020:  (1) 50 percent of  
          California's electricity to come from renewable energy sources;  
          (2) reducing by 50 percent the amount of petroleum used in cars  
          and trucks; and (3) doubling the energy efficiency of existing  
          buildings, all by 2030.  The author has described this bill as  
          an effort to execute on the Governor's "bold vision."  

          To a large extent, this bill builds upon existing state  
          programs, which the author describes as already making  
          significant progress to the bill's two goals.  This bill builds  
          upon existing statutory authority to achieve the expanded RPS  
          goal.  As existing statute makes extensive, specific  
          requirements of the RPS program, so too does this bill.  
           FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:YesLocal:   Yes

          According to the Assembly Appropriations Committee:

           Ongoing annual costs of $5.6 million for staffing and one-time  
            costs of $3.5 million in contracts [General Fund (GF) and  
            special fund] for the CEC to implement the requirements of the  

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

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

           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  

           Unknown costs pressures (special fund) for the CPUC and CEC to  
            review renewable integration needs and consider grid  


                                                                     SB 350  
                                                                    Page  9

            integration in RPS implementation proceedings.

          SUPPORT:   (Verified9/11/15)

          350 Bay Area/Marin                            
          Academy of Pediatrics- California     
          Advanced Energy Economy   
          Alameda Building Trades Council      
          Alameda County Board of Supervisors          
          Alliance for Solar Choice                    
          American Academy of Pediatrics      
          American Cancer Society Cancer Action Network
          American Farmland Trust
          American Lung Association                
          American Lung Association-California          
          American White Water
          Annies's Natural Foods
          Artesia City Councilmember Ali Sajjad Taj
          Asian Pacific Environmental Network            
          Asthma and Sinus Center                   
          Asthma Coalition of Los Angeles County       
          Attorney General Kamala Harris        
          Aztec Energy                          
          Baz Allergy
          Ben & Jerry's                          
          Beneficial State Bank             
          Berkeley Mayor Tom Bates               
          Berkshire Hathaway Energy
          Biosynthetic Technologies                  
          Blattner Energy                                   
          Bloom Energy                         
          Bonnie J. Adario Lung Cancer Foundation    
          Borrego Solar                          
          Breathe California 
          Bright Power                              
          BYD Motors, Inc.                                


                                                                     SB 350  
                                                                    Page  10

          CA Local conservation corps             
          California Association of Sanitation Agencies
          California Bicycle Coalition
          California Biomass Energy Alliance   
          California Black Health Network        
          California Catholic Conference          
          California Conference of Directors of Environmental Health
          California Conservation Corps                       
          California District Council of Ironworkers       
          California Energy Efficiency Industry Council
          California Energy Storage Alliance
          California Environmental Justice Alliance
          California Equity Leaders Network
          California Federation of Teachers      
          California League of Conservation Voters
          California Municipal Utilities Association        
          California Natural Gas Vehicle Coalition
          California Nurses Association             
          California Pan Ethnic Health Network            
          California Public Health Association- North
          California Solar                                   
          California Solar Energy Industry Association
          California State Association of Electrical Workers
          California State Pipes Trade Council 
          California Teamsters Public Affairs Council
          California Thoracic Society                
          California Trout
          California Walks                                  
          California Wind Energy Association   
          California-Nevada Conference of Operating Engineers
          Californians Against Waste                 
          Canadian Solar                                          
          Catholic Charities Diocese of Stockton 
          Center for Climate Change and Health          
          Center for Sustainable Energy                       
          Center on Race Poverty and the Environment
          Central California Asthma Collaborative
          Chai Energy 
          ChangeLab Solutions  
          Circulate San Diego       
          City of Glendale


                                                                     SB 350  
                                                                    Page  11

          City of Huntington Park
          City of Los Angeles                 
          City of Santa Monica            
          Clean Energy Collective   
          Clean Energy and Clean Energy Renewable Fuels
          Clean Fuel Partners                
          Clean Power Campaign
          Clean Power Finance             
          Clean Water Action                             
          CleanTech San Diego                        
          Cleveland National Forest Foundation
          CLIF Bar & Co.           
          Climate Parents                                  
          Climate Resolve                                 
          Coalition for Clean Air             
          Coalition for Renewables and Gas     
          Coalition for Sustainable Transportation         
          Coalition of California Utility Employees        
          Coastal Environmental Rights Foundation
          Code REDD
          Contra Costa Building Trades Council           
          Controller Betty Yee               
          County of Los Angeles Public Health 
          Dignity Health                         
          Distinguished Outreach Services       
          Doctors for Climate Health
          Dr. Carl Wunsch (Harvard)
          Dr. Roger Bales (UC Merced)
          Eagle Creek                
          Eagle Crest Energy
          Eco Factor 
          EDF Renewable Energy                                 
          Endangered Habitats League       
          Energy Source                                    
          Environment California                       
          Environmental and Energy Consulting           
          Environmental Defense Fund             
          Environmental Entrepreneurs     
          Eon Energy                             


                                                                     SB 350  
                                                                    Page  12

          First Fuel                                             
          First Solar                                
          Fresno, Madera, and Kings Building Trades Council
          Friends Committee on Legislation of California
          Friends of the River
          fs energy 
          Gaia Development Services
          Gap, Inc.
          Greenbelt Alliance                              
          Greenlining institute
          Green Star Solutions   
          GRID Alternatives                               
          Harvest Power   
          Hawthorne City Councilmember Angie Reyes English                  
          Health Care Without Harm                 
          Health Officers Association of California       
          Heat and Frost Insulators and Allied Workers
                                                              Home Energy Analytics 
          Humboldt/Del Norte Building Trades Council
          Hydropower Reform Coalition  
          icontrol Networks
          Inglewood City Councilmember Eloy Morales                    
          Imperial Building Trades Council        
          Independent Energy Producers Association
          Insurance Commissioner Dave Jones           
          International Brotherhood of Boilermakers
          International Brotherhood of Electrical Workers
          International Union of Painters and Allied Trades
          Investor Confidence Project 
          KB Home                                            
          Kern, Inyo & Mono Building Trades Council
          kW Engineering 
          Lancaster Choice Energy                   
          Large Scale Solar Association                        
          League of Women Voters of California
          Levi Strauss & Co.      
          Lieutenant Governor Gavin Newsom 
          Long Beach Mayor Robert Garcia
          Los Angeles City Council        


                                                                     SB 350  
                                                                    Page  13

          Los Angeles County Board of Supervisors    
          Los Angeles Mayor Eric Garcetti       
          Los Angeles Sustainability Collaborative        
          Los Angeles Unified School District Board of Education
          Los Angeles/Orange Building Trades Council
          Marin Building Trades Council                        
          Marin Clean Energy
          Mars, Inc.                                
          McCarthy Building Companies, Inc.   
          Medical Advocates for Healthy Air
          Mercury Press International   
          Mid Valley Building Trades Council    
          Mission Data Empowering Energy Savings 
          Moms Clean Air Force                       
          Montebello Mayor Jack Hadjinian      
          Monterey/Santa Cruz Building Trades Council
          Motiv Power Solutions
          Mountain Riders Alliance
          Move LA
          Napa/Solano Building Trades Council            
          Natel Energy                           
          National Parks Conservation Association      
          Natural Resource Defense Council    
          Nature Conservancy       
          NextGen Climate                                
          NextTracker, Inc     
          Nobel economist Dr. Kenneth Arrow (Stanford)
          Nobel Prize-winning scientist Dr. Mario Molina (UCSD)             
          Northeastern, Shasta, Trinity, Lassen & Tehama Building Trades  
          NRG Energy, Inc.                               
          Oakland City Council              
          Office of Ratepayer Advocates      
          Pacific Ethanol                                    
          Pacific Gas and Electric Company    
          Pattern Energy                                    
          Physicians for Social Responsibility - Los Angeles


                                                                     SB 350  
                                                                    Page  14

          Physicians for Social Responsibility - San Francisco Bay Area  
          Proterra, Inc.
          Public Advocates                                            
          Public Health Institute          
          Rainforest Automation
          Recurrent Energy                               
          Redlands Area Democratic Club        
          Regional Asthma Management and Prevention
          Rep. Adam Schiff                               
          Rep. Alan Lowenthal               
          Rep. Anna Eshoo                                
          Rep. Barbara Lee                               
          Rep. Doris Matsui                               
          Rep. Eric Swalwell                              
          Rep. Janice Hahn                               
          Rep. Jared Huffman               
          Rep. Jerry McNerney             
          Rep. John Garamendi                        
          Rep. Juan Vargas                               
          Rep. Judy Chu                                    
          Rep. Julia Brownley                            
          Rep. Karen Bass                                 
          Rep. Lois Capps                                 
          Rep. Loretta Sanchez             
          Rep. Lucille Roybal-Allard                  
          Rep. Mark DeSaulnier                        
          Rep. Mark Takano                              
          Rep. Mike Honda                                
          Rep. Mike Thompson             
          Rep. Nancy Pelosi                              
          Rep. Scott Peters                               
          Rep. Susan Davis                               
          Rep. Ted Lieu                         
          Rep. Zoe Lofgren        
          Sacramento Electric Vehicle Association      
          Sacramento Municipal Utility District 
          Sacramento/Sierra Building Trades Council


                                                                     SB 350  
                                                                    Page  15

          San Bernardino/Riverside Building Trades Council
          San Diego Building Trades Council    
          San Fernando City Councilmember Antonio Lopez
          San Fernando City Councilmember Robert Gonzales
          San Francisco Asthma Task Force    
          San Francisco Board of Supervisors 
          San Francisco Building Trades Council         
          San Francisco Public Utilities Commission
          San Joaquin, Calaveras & Alpine Building Trades Council
          San Mateo Building Trades Council   
          Santa Ana City Councilmember Michele Martinez
          Santa Barbara County Air Quality Control District
          Santa Clara County Medical Society 
          Santa Clara/San Benito Building Trades Council
          Sempra Energy Utilities                      
          Sequoia Riverlands Trust                   
          Service Employees International Union - California
          Sierra Business Council                      
          Sierra Club California             
          Signal Energy, LLC
          Silicon Valley Leadership Group
          Small Business California
          Solar City             
          Solar Energy Industries Association                               
          Sonoma Clean Power                        
          Sonoma County Asthma Coalition     
          Sonoma, Mendocino & Lake Building Trades Council
          South Yuba River Citizens League     
          Southern California Edison                 
          Southern California Public Power      
          Southwest Wetlands Interpretive Association
          Stanislaus, Merced & Mariposa Building Trades Council
          State Association of Electrical Workers         
          State Building and Construction Trade Council of California
          Stem, Inc.
          Sun Edison                              
          Superintendent of Public Instruction Tom Torlakson
          Sustainable Power Group


                                                                     SB 350  
                                                                    Page  16

          The Utility Reform Network
          Thinkshift Communications                
          Treasurer John Chiang                       
          Tri-Counties Building Trades Council 
          Trust for Public Lands
          Tulare County Citizens for Responsible Growth                     

          U.S. Senator Boxer                            
          U.S. Senator Feinstein  
          Union of Bricklayers and Allied Craftworkers
          Union of Concerned Scientists                       
          Union of Elevator Constructors          
          United Union of Roofers, Waterpoofers and Allied Trades
          US Green Building Council     
          Valley Clean Air Now
          Vivint Solar                              
          Vote Solar                               
          Watersmart Software             
          Watsonville City Council
          WeatherBug Home                   
          Western Council of Sheet Metal Workers
          Western State Council
          Wireless Advanced Vehicle Electrification

          OPPOSITION:(Verified   9/11/15)

          None received

          ARGUMENTS IN SUPPORT:   Supporters note the need to build upon  
          the success of the state's existing clean energy policies and  
          note many co-benefits, such as cleaner air, innovation forcing,  
          and energy supply diversity, and the value of as a leader in the  
          fight against climate change and for clean energy.

          ARGUMENTS IN OPPOSITION:     Opponents contend the bill will  


                                                                     SB 350  
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          lead to higher energy prices, which the state's poorest members  
          will be least able to pay.

          Prepared by:Jay Dickenson / E., U., & C. / (916) 651-4107
          9/11/15 21:12:29

                                   ****  END  ****