BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 1348
                                                                  Page  1

          Date of Hearing:   May 13, 2009

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Kevin De Leon, Chair

                   AB 1348 (Blakeslee) - As Amended:  May 4, 2009 

          Policy Committee:                               
          UtilitiesVote:12-0
                        Natural Resources                       9-0

          Urgency:     No                   State Mandated Local Program:  
          Yes    Reimbursable:              No

           SUMMARY  

          This bill requires the investor-owned electrical utilities  
          (electrical corporations) to submit fossil fuel procurement  
          plans to the Public Utilities Commission (PUC).  Specifically,  
          this bill:

          1)Requires each electrical corporation to file with the PUC a  
            fossil fuel procurement plan complying with the greenhouse gas  
            (GHG) emission requirements of AB 32, as adopted by the Air  
            Resources Board.

          2)Requires, to the extent feasible, that the above be part of  
            the electrical corporations' procurement plans submitted  
            pursuant to current law.

          3)Requires the PUC to: 

             a)   Review and accept, modify, or reject the fossil fuel  
               procurement plans.
             b)   Adopt criteria for lease-cost and best-fit fossil fuel  
               generation resources to facilitate compliance with AB 32  
               emission reduction requirements, considering the indirect  
               costs of transmission investments and the ongoing costs of  
               greenhouse gas emissions from fossil fuel generating  
               resources.

           FISCAL EFFECT  

          One-time costs of about $190,000 for one full-time regulatory  
          analyst, a part-time administrative law judge and a counsel to  








                                                                  AB 1348
                                                                  Page  2

          conduct the proceeding establishing the least-cost and best-fit  
          criteria for fossil fuel generation, and ongoing costs of about  
          $105,000 for one regulatory analyst to review the fossil fuel  
          procurement plans. [Public Utilities Reimbursement Account]

           COMMENTS  

           Purpose  .  According to the author, this bill is intended to make  
          ensure that the PUC provides the right incentives for utilities  
          to choose low-GHG emitting resources when procuring the  
          non-renewable portion of their generation portfolio.  The author  
          states that a 20% or 33% Renewable Portfolio Standard (RPS) does  
          not ensure that GHG emissions from non-renewable generation will  
          be reduced.  The author argues that the RPS program does not  
          address GHG emissions from fossil fuel peaker plants needed to  
          back-up intermittent, renewable resources.

           Analysis Prepared by  :    Chuck Nicol / APPR. / (916) 319-2081