BILL ANALYSIS �
AB 723
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Date of Hearing: May 18, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 723 (Bradford) - As Introduced: February 17, 2011
Policy Committee: Natural
ResourcesVote:6-2
Utilities and Commerce 10-0
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill extends, from January 1, 2012, to January 1, 2016,
charges to electricity customers, known collectively as the
public goods charge, to fund energy efficiency, renewable energy
and energy research. The bill also authorizes the California
Energy Commission (CEC) to continue to fund its renewable energy
program during the program's 2012-16 investment cycle.
FISCAL EFFECT
This bill will result in the annual collection and expenditure
of at least $365 million from 2012 through 2016 from ratepayers
of the state's major investor-owned utilities (Pacific Gas and
Electric, Southern California Edison and San Diego Gas and
Electric) and a proportional amount from the customers of the
state's municipal electric utilities, such as the Los Angeles
Department of Water and Power.
COMMENTS
1)Rationale. The author contends it important to continue to
collect the public goods charge to provide funding for
investments in energy efficiency, renewable energy and energy
research.
2)Background. When California partially deregulated its energy
market in 1996, many assumed the state's for-profit
investor-owned utilities (IOUs), seeking to reduce costs,
would cut research and other efforts that provide public
benefits. To ensure continuation of energy research and other
AB 723
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efforts that benefitted the public, statute directed the IOUs
to levy a public goods charge on electricity bills to annually
fund energy efficiency ($228 million), renewable energy ($65.5
million), and energy research, development and demonstration
($62.5 million). The public goods charge was authorized for
10 years and is set to expire at the beginning of 2012.
Statute also directs the state's municipally owned utilities
to charge their customers a public goods charge for the same
purposes and in an amount proportional to revenues.
3)Related Legislation.
a) AB 1303 (Williams), pending before this committee,
authorizes CEC to administer its renewable energy program
and the public interest energy research program until 2020,
but does not extend the public goods charge that currently
funds those programs.
b) SB 35 (Padilla), pending before the Senate
Appropriations Committee, repeals the public goods charge
and the renewable energy and research programs, replacing
them with a new program.
c) SB 410 (Wright) , also before the Senate Appropriations
Committee, extends the sunset on the public goods charge
and research program for 10 years, to 2022.
4)Support. This bill is supported by the Los Angeles County
Board of Supervisors, Environmental Defense Fund and several
other environmental, conservation and renewable energy
advocates.
5)Opposition. The bill is opposed by the California
Manufacturers Association, whose members often pay large
electric utility bills.
Analysis Prepared by : Jay Dickenson / APPR. / (916) 319-2081