BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
2132 (Carter)
Hearing Date: 07/15/2010 Amended: 05/28/2010
Consultant: Brendan McCarthy Policy Vote: EU&C 8-1
AB 2132 (Carter), page 2
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BILL SUMMARY: AB 2132 allows funds in the Renewable Resource
Trust Fund to be used for energy efficiency improvements to
existing buildings, until January 1, 2012.
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Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13 Fund
Guideline development $200 Special
*
Program oversight $100 $100 Special
*
Cost pressure on existing Potentially in the tens of
millions Special *
program
* Renewable Resource Trust Fund.
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STAFF COMMENTS: This bill meets the criteria for referral to the
Suspense File.
Under current law, natural gas and electricity consumers pay a
public goods charge as part of their utility bill, based on the
amount of energy they consume. Funds collected via the public
goods charge are used for programs to support energy efficiency,
renewable energy resources, and research and development in the
energy area. A portion of the funds generated by the public
goods charge are deposited in the Renewable Resource Trust Fund
and are used to support the development of renewable energy
resources. The public goods charge will sunset on January 1,
2012, while the expenditure of existing funds will continue
until 2016.
Under SB 1 (Murray, Chapter 132, 2006), $400 million from the
Renewable Resource Trust Fund is available to fund the
installation of solar panels on new homes. To date, the Energy
Commission has approved or is reviewing applications for about
$59 million of these funds. Staff notes, however, that the
downturn in the housing market has slowed demand for these
AB 2132 (Carter), page 2
funds. As the housing market improves, additional applications
for these funds are likely.
Under order of the Public Utilities Commission, the state's
investor owned utilities will spend about $3.1 billion over the
next three years to promote energy efficiency in new and
existing buildings. These costs are born by ratepayers.
AB 2132 authorizes the use of funds in the Renewable Resource
Trust Fund to be used for energy efficiency improvements to
existing buildings, through January 1, 2012.
The Energy Commission indicates that authorizing energy
efficiency projects to be funded from the Renewable Resources
Trust Fund will require additional staff to develop program
guidelines and to oversee the expenditure of those funds.
Because these energy efficiency programs are different from the
existing focus of the program, existing staff resources will not
be able to perform these functions.
In addition to the direct staff costs, the bill creates cost
pressures on the Renewable Resources Trust Fund. By authorizing
the use of funds for energy efficiency projects, less funding
will be available for existing authorized uses. The extent of
this cost pressure is unknown. Given the large stock of existing
buildings that were constructed before the state's current
energy efficiency standards were in place, demand for additional
energy efficiency funds could be significant.
The Renewable Resource Trust Fund has a projected fund balance
of $170 million at the end of 2010-11. However, this fund
balance presumes that a loan from the fund to the General Fund
of $35 million will be repaid in the budget year. In addition,
several legislative actions (SB x8 34, SB 71, and SB 77) have
borrowed or expended funds from the Renewable Resource Trust
Fund. Accounting for these loans and transfers and assuming that
the General Fund loan is not repaid in the budget year, the
available fund balance is more likely to be about $75 million.