BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 1207 (Hueso) - Energy: conservation: financial assistance
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|Version: February 18, 2016 |Policy Vote: E., U., & C. 9 - 0 |
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|Urgency: No |Mandate: No |
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|Hearing Date: May 2, 2016 |Consultant: Narisha Bonakdar |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: SB 1207 extends the sunset on the Energy Conservation
Assistance Account program (ECAA) from January 1, 2018 to
January 1, 2028.
Fiscal
Impact: The extension of the sunset to 2028 will result in the
following fiscal impacts:
Up to $2.8 million will flow back to the ECAA rather than to
the General Fund absent the extension.
The continuation of approximately $1.7 million annually (ECAA)
for administration costs, plus bond administrative costs of
approximately $75,000 annually. (See staff comments).
Background: The ECAA program was established by the Energy Conservation
Assistance Act of 1979. The program makes low-interest loans to
cover up to 100 percent of a project with a maximum repayment
term of 15 years. A loan repayment amount cannot exceed the
SB 1207 (Hueso) Page 1 of
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estimated energy savings from a funded project.
Funding for ECAA loans has come from a variety of sources over
the years, including the General Fund and tax-exempt revenue
bonds. In 2009, American Recovery and Reinvestment Act (ARRA)
provided $25 million to California Energy Commission (CEC) for
ECAA loans to supplement about $34 million in ARRA funds that
the CEC used to award grants to 279 small cities and counties
for energy efficiency projects. SB 679 (Pavley, Chapter 597,
Statutes of 2011) appropriated an additional $25 million to CEC
for ECAA loans that originated as ratepayer funds deposited into
the Renewable Resource Trust Fund (RRTF). The $25 million was
part of the $50 million transferred by SB 77 (Pavley, Chapter
15, Statutes of 2010) from the RRTF to the California
Alternative Energy and Advanced Transportation Financing
Authority within the State Treasurer's Office for a Property
Assessed Clean Energy loan program that has since been put on
hold for residential energy efficiency loans. More recently,
the Proposition 39 - Clean Energy Jobs Act program has provided
funding to the ECAA program for zero-percent-interest loans for
public schools.
According to the CEC, since 1979 the CEC has lent more than $383
million to various local agencies throughout the state to fund
energy efficiency improvements. Those loans have gone to more
than 840 recipients, as follows, based on total loan amounts:
about 58 percent to local governments, 23 percent to K-12 public
schools, 10 percent to public colleges, 7 percent to public care
facilities and hospitals, and 2 percent to special districts.
The CEC reports that, despite this long record of lending, the
ECAA program has never experienced a default on loan repayment.
ECAA has received five legislative extensions since its
enactment in 1979. The most recent sunset extension was SB 1268
(Pavley, Chapter 615, Statutes of 2012).
Proposed Law:
SB 1207 (Hueso) Page 2 of
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This bill extends the sunset date on the ECAA program from
January 1, 2018, to January 1, 2028.
Related
Legislation: SB 1268 (Pavley, Chapter 615, Statutes of 2012)
extended the ECAA program sunset from January 2013 to January
2018.
Staff
Comments: Per the CEC, the revolving loan program is
self-sustaining. As a loan enters repayment, those payments
provide the cash flow to fund additional eligible projects.
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