BILL ANALYSIS Ó
SB 1222
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Date of Hearing: August 29, 2016
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Mike Gatto, Chair
SB
1222 (Hertzberg) - As Amended August 19, 2016
SENATE VOTE: 39-0
SUBJECT: Public Utilities Commission: reports: financing
orders
SUMMARY: Makes various changes to the authorities of the
California Public Utilities Commission (CPUC) and the reports
required to be provided to the Legislature. Specifically, this
bill:
1)Changes dates by which the CPUC must submit specified reports.
2)Changes and adds to the required contents of specified CPUC
reports.
3)Repeals requirements for the CPUC to submit specified reports.
4)Extends CPUC's authority to issue financing orders from
December 31, 2016, to June 30, 2022.
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5)Limits CPUC's authority to serve warrants and make arrests to
investigators.
6)Adds a January 1, 2023, sunset date to a specified reporting
statute. This statute mandates electrical or gas corporations
using ratepayer money to fund research and development
projects report the findings of those projects to the
Legislature.
EXISTING LAW:
1)Establishes the CPUC consisting of five members appointed by
the Governor and approved by the Senate and that the
Legislature has plenary power, unlimited by the other
provisions of the Constitution but consistent with this
article, to confer additional authority and jurisdiction upon
the CPUC, to establish the manner and scope of review of CPUC
action in a court of record. (California Constitution, Article
XII, Section 1 et seq.) Requires the California Energy
Commission (CEC) to submit to the CPUC and to publicly owned
electric utilities, recommendations designed to reduce
wasteful, unnecessary, or uneconomic energy consumption
resulting from rate structures, cost of service allocations,
the disallowance of business expense and others. Requires the
CPUC and publicly owned electric utilities to consider such
recommendations within six months after the date it receives
them. (Public Resources Code Section 25403)
2)Establishes an "Electric Program Investment Charge" to collect
funds for renewable energy programs and research, development,
and demonstration programs. (Public Resources Code 25710)
3)Requires the CPUC to conduct a zero-based budget for all of
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its programs by January 10, 2015. (Public Utilities Code
Section 318)
4)Requires the California Independent Systems Operator (CAISO),
in consultation with the CEC, CPUC, Western Electricity
Coordinating Council (WECC), and concerned agencies in the
western states to provide a report to the Legislature and the
Oversight Board within six months of the Federal Energy
Regulatory Commission (FERC) that includes specified
information. (Public Utilities Code Section 350)
5)Requires the CPUC to prepare and submit a report to the
Legislature, on or before, June 1, 2002, describing its
proposed methodology for determining the new electric rates
required by January 1, 2003. (Public Utilities Code Section
353.13(b))
6)Requires the CPUC, in consultation with the ARB or appropriate
local air quality management district, and CEC, to evaluate
the efficiency, emissions, and reliability of distributed
energy resources with a capacity greater than 10 kilowatts and
submit a report to the Legislature by 2003. (Public Utilities
Code Section 353.15 (c))
7)Requires each electrical corporation participating in the
"21st Century Energy System Decision" Decision 12-12-031 to
submit a report to the CPUC by December 1, 2013. (Public
Utilities Code Section 740.5)
8)Requires the CPUC to review its policies concerning pricing of
utility service and assess whether the pricing promotes energy
efficiency by customers and report to the Legislature as soon
as practicable. (Public Utilities Code Section 747.5)
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9)Establishes a Consumption Surcharge Fund to receive funds for
public interest research and development, as specified.
(Public Utilities Code Section 895)
10)Requires the CPUC to report to the Legislature regarding
specified activities of the California Public Utilities
Foundation. (Public Utilities Code Section 910.5)
11)Requires the CPUC to annually review the e-complaints program
to ensure continued effectiveness. (Public Utilities Code
Section 910.6)
12)Requires specified reporting by the CPUC, by each May 1, to
the Legislature related to implementing the RPS including
information related to costs, revenues, workforce
training/recruitment and others. (Public Utilities Code
Section 913.3)
13)Requires the CPUC to provide a quarterly report of the
progress of each electrical corporation in meeting the RPS and
other specified information. (Public Utilities Code Section
913.5)
14)Requires the CPUC, in consultation with the CEC, to report to
the Legislature every January 1 of every even numbered year on
the progress and status of procurement, permitting and siting,
transmission facilities and other specified information
related to the RPS. (Public Utilities Code Section 913.6)
15)Requires the CPUC to provide a report every three years to
the Legislature on the energy efficiency and conservation
programs it oversees, including authorized utility budgets.
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The report shall include information regarding each electrical
corporation's and each gas corporation's implementation of
energy efficiency for residential buildings. (Public Utilities
Code Sections 913.7 and 913.8)
16)Requires the CPUC to annually report to the Legislature on
its efforts to identify ratepayer funded energy efficiency
programs that are similar to those administered by the CEC,
California Air Resources Board (CARB), and California
Alternative Energy and Advanced Transportation Financing
Authority in its annual report required in Section 913.
(Public Utilities Code Section 913.9)
17)Requires the CPUC to provide a progress report to the
Legislature of each odd-numbered year concerning policies on
rates, equipment, and infrastructure implemented by the CPUC
and other state agencies, to facilitate the use of electricity
to power and natural gas to fuel low-emission vehicles.
(Public Utilities Code Section 913.11)
FISCAL EFFECT: According to the Assembly Appropriations
Committee:
1)Increases CEC costs of approximately $136,000 (1 personnel
year) to compile information, conduct analysis, and prepare
formal comments regarding energy efficient programs (Energy
Resources Program Account or other special fund.)
2)No additional CPUC costs, potential minor savings.
COMMENTS:
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1)Purpose and Background: According to the author, this bill
clarifies CPUC reporting obligations. According to the CPUC,
there are several dozen reports required by the Legislature.
Many of these report requirements have been scattered
throughout the Public Utilities Code. Several are now
outdated, with deadlines that have long passed.
CPUC sponsored legislation last year, SB 697 (Hertzberg),
Chapter 612, Statutes of 2015, shifted many reporting
requirements to one location within the code in an effort to
better organize the Public Utilities Code. This bill builds
off efforts from last year.
This bill also extends the sunset date on the CPUC's authority
to refinance the costs of electric deregulation. In 1995, the
state issued 20-year bonds to cover certain costs associated
with that transition that are paid back by utility ratepayers.
In recent years, interest rates have declined substantially
and the short term finance rates are near zero percent.
According to the CPUC, having refinancing authority saves
ratepayers money. This bill extends that authority to June 30,
2022.
2)Report on Research and Development Projects: This bill was
amended to require the CPUC to require each participating
electrical corporation to jointly prepare and submit report on
research and development projects, as specified. The report is
to specifically provide information on the outcome of whether
a project "resulted in any technological advancements or
breakthroughs in promoting cyber security and grid
integration." Following acceptance of a sufficient report by
the CPUC, the report is to be submitted to the Legislature.
This report appears to be the report specified in Public
Utilities Code Section 740.5 (e)(2) that is required for
research activities specified in Public Utilities Code Section
740.5 (a). A sunset date of January 1, 2023, is also included,
similar to the sunset specified in Public Utilities Code
Section 740.5(e)(3).
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As written, the new section proposed in this bill appears as a
stand-alone report. The striking of the reporting language in
the existing code further delinks the relationship between
this reporting requirement and the research and development
activities specified in the current code. Without the
reference to the research and development specified in Public
Utilities Code Section 740.5, this bill could be referring to
the cybersecurity and renewable integration research and
development activities funded pursuant to Public Resources
Code Section 25710, Public Utilities Code Section 895,
shareholder-funded funded research and development activities
related to cybersecurity and renewable integration, or all of
the above.
3)Suggested Amendments:
The author may wish to consider a clarifying amendment to
reference the research and development projects specified in
Section 740.5 to ensure that the language in this bill is not
interpreted to create a new standalone report. The author may
also with to consider chaptering out language to ensure that
the code sections being amended in AB 1330 (Bloom, 2016) are
not affected by the proposed amendments to the same code
sections in this bill.
913.12. (a) The commission shall require each participating
electrical corporation to prepare and submit to the
commission, by 60 days following the conclusion of all
research and development projects, a joint report summarizing
the outcome of all funded projects pursuant to Section 740.5 ,
including an accounting of expenditures by the project
managers and grant recipients on administrative and overhead
costs and whether the project resulted in any technological
advancements or breakthroughs in promoting cyber security and
grid integration. The commission shall, within 30 days of
receiving the joint report, determine whether the report is
sufficient or requires revision and, upon determining that the
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report is sufficient, submit the report to the Legislature.
(b) This section shall remain in effect only until January 1,
2023, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2023, deletes or
extends that date.
REGISTERED SUPPORT / OPPOSITION:
Support
None on file.
Opposition
None on file.
Analysis Prepared by:Sue Kateley / U. & C. / (916)
319-2083
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