BILL ANALYSIS
SENATE TRANSPORTATION & HOUSING COMMITTEE BILL NO: SB 1340
SENATOR ALAN LOWENTHAL, CHAIRMAN AUTHOR: kehOe
VERSION: 2/19/10
Analysis by: Carrie Cornwell FISCAL: yes
Hearing date: April 6, 2010
SUBJECT:
AB 118: Alternative and Renewable Fuels and Vehicle Technology
Program
DESCRIPTION:
This bill makes the costs of homeowners' electrical work needed
to fuel electric vehicles eligible for subsidies under the
California Energy Commission's Alternative and Renewable Fuel
and Vehicle Technology Program.
ANALYSIS:
AB 118 (N??ez), Chapter 750, Statutes of 2007, created the
Alternative and Renewable Fuel and Vehicle Technology Program,
which the California Energy Commission (CEC) administers to
provide, upon appropriation by the Legislature, grants,
revolving loans, loan guarantees, loans, or other appropriate
funding measures to public agencies, vehicle consortia,
businesses, consumers, recreational boaters, and academic
institutions to develop and deploy innovative technologies that
transform California fuel and vehicle types to help attain the
state's climate change policies.
Funding of approximately $120 million annually for this program
comes from additional fees on vehicle registrations, special
identification plates for various vehicles, and vessel
registrations, plus $10 million annually from the Public
Interest Research, Development, and Demonstration Fund, which is
derived from a portion of electric utility rates.
The CEC, through a competitive process, allocates these funds to
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alternative fuel and vehicle technology projects. To set
priorities for the allocation of funds, the CEC must develop an
investment plan in consultation with a wide array of
stakeholders. The CEC adopted its first investment plan at its
April 22, 2009 meeting. It is now in the process of updating
that plan for 2010, which the CEC plans to adopt in the summer.
Due to some borrowing of AB 118 funds and the supplemental funds
that the American Recovery and Reinvestment Act (ARRA, the
federal stimulus program) provides, last year the CEC awarded
only about $57 million to alternative fuel and vehicle
technology projects. Among the ARRA- and AB 118-funded projects
is the installation of over four thousand new electric vehicle
charging stations.
Existing law makes the following projects eligible for funding
under the Alternative and Renewable Fuel and Vehicle Technology
Program:
Alternative and renewable fuel infrastructure, fueling
stations, and equipment.
Projects to develop and improve vehicle technology that
provide for better fuel efficiency and lower greenhouse gas
emissions.
Alternative and renewable fuel projects to develop,
improve, demonstrate, deploy, produce, and commercialize
alternative and renewable fuels, plus reduce the overall
carbon footprint of these fuels.
Vehicle retrofit projects to create higher fuel
efficiencies.
Infrastructure projects that promote alternative and
renewable fuel infrastructure development for existing
fleets, public transit, and existing transportation
corridors.
Workforce training programs related to alternative fuels
and vehicle technology.
Block grants administered by not-for-profit technology
consortia for specified purposes.
Analyses and assessments performed by state agencies to
determine the impacts of increasing the use of low-carbon
transportation fuels and technologies.
This bill adds to the projects that are eligible for funding
under the alternative fuel and vehicle technology program from
the CEC "a program that provides funding for homeowners who
purchase an electric vehicle to offset costs associated with
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modifying electrical sources to include an in-home electric
vehicle charging station."
COMMENTS:
1.Purpose . The author notes that state policies on greenhouse
gas reductions and clean alternative fuels and technologies
currently emphasize the importance of electric vehicle
technology, and that using ARRA funds the CEC is already
actively engaged in upgrading over 4,000 previous electric
vehicle charging stations throughout the state. Additionally,
the U.S. Department of Energy has awarded contracts nationwide
under ARRA that include funding for in-home and public
charging stations.
The author also points out that major auto manufacturers will
be introducing new electric vehicles and plug-in electric
vehicles in the fall of 2010 and early 2011, and as consumers
seek to purchase these vehicles many will require electrical
improvements at their homes. Costs for these improvements can
range from a few hundred dollars to several thousand dollars.
Despite the air quality and energy efficiency benefits of the
technology, many potential electric vehicle purchasers may be
dissuaded from buying an electric-drive vehicle if it
additionally requires hundreds of dollars of initial costs at
their homes. This bill gives clear legislative authority for
the CEC to design an AB 118-funded program that helps to
off-set these costs.
2.Already an eligible use of AB 118 funds . Given that AB 118
provides that alternative and renewable fuel infrastructure,
fueling stations, and equipment are eligible for funding from
CEC from the Alternative and Renewable Fuel and Vehicle
Technology Program, it is unclear how this bill changes
existing law, if at all. The CEC's investment plan for its
fuel and vehicle technology program calls for spending $176
million on electric-drive, hydrogen, ethanol, renewable diesel
and biodiesel, natural gas, and propane fuel technologies with
largest the portion of funding going to electric-drive
projects. CEC staff indicates that they anticipate that home
electric charging will be the focus of future AB 118
investments.
3.The elusive electric car . In its recent report, Climate Change
Challenges, Vehicle Emissions and Public Health in California,
the Public Policy Institute of California concludes that
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increasing the use of battery-electric vehicles provides the
greatest public health benefit per unit of GHG emission
reduction" among the possible alternative fueling and vehicle
technologies on the horizon. The report also notes, however,
that electric vehicles involve "high cost and uncertainty"
because they "depend on technological breakthroughs and
broader market penetration to reduce cost and meet performance
targets." This bill attempts to address some of those high
costs and market penetration issues with a subsidy from the
CEC.
4.Double-referral . The Rules Committee referred this bill to
both the Transportation and Housing Committee and to the
Environmental Quality Committee. Therefore, if this bill
passes this committee, it will be referred to the Committee on
Environmental Quality.
POSITIONS: (Communicated to the Committee before noon on
Wednesday,
March 31, 2010)
SUPPORT: None received.
OPPOSED: None received.