BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
AB 723 (Bradford) - Energy: public goods charge.
Amended: August 8, 2012 Policy Vote: EU&C 7-4
Urgency: Yes Mandate: Yes
Hearing Date: August 16, 2012
Consultant: Brendan McCarthy
SUSPENSE FILE.
Bill Summary: AB 723, an urgency measure, would extend
collection of the Public Goods Charge from utility ratepayers
until 2020. The bill would authorize the California Energy
Commission to expend funds from the Public Goods Charge for
renewable energy projects.
Fiscal Impact:
The bill would generate new revenues of about $390 million
per year (General Fund).
The bill authorizes the expenditure of about $73 million
per year by the California Energy Commission for renewable
energy programs (General Fund).
By raising additional tax revenue, the bill will increase
the state's obligation to provide funding for schools under
Proposition 98 (Article XVI, Section 8 of the Constitution)
by between $150 million and $370 million per year (General
Fund).
Based on the formulas in Proposition 98 and the amount of
funding owed to schools in arrears (referred to as the
"maintenance factor"), between 40 percent and 95 percent of
the revenues of any new tax must go to school funding. While
this bill does not specifically allocate any funding for
schools, it would create a substantial funding obligation
that would be met with other revenues.
The bill authorizes the expenditure of about $140 million
in existing funds for solar energy projects, grants to local
governments for renewable energy planning, grants to schools
for technical education, and other renewable energy
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projects. (The funding available for these purposes includes
both the remaining fund balance in the Renewable Resources
Trust Fund of about $40 million and about $100 million in
outstanding loans from the Renewable Resources Trust Fund to
the General Fund.)
Background: Under prior law, the state's investor owned
utilities collected a Public Goods Charge from utility customers
to fund energy efficiency, renewable energy, and research and
development programs. The statutory authority to collect the
Public Goods Charge sunset on January 1, 2012.
In addition to the Public Goods Charge, the Legislature and the
Public Utilities Commission have authorized a variety of
programs to support energy efficiency and renewable energy.
After the Public Goods Charge sunset this year, the Public
Utilities Commission ordered the investor owned utilities to
collect about $162 million per year from customers to fund
research, development, and demonstration projects. This program
is referred to as the Electric Program Investment Charge. Of
these funds, 80 percent are to be transferred to the California
Energy Commission for expenditure and 20 percent will be
retained and spent by the utilities.
SB 1018 (Committee on Budget, Chapter 39, Statutes of 2012) the
resources budget trailer bill, eliminated some of the programs
that had been funded with the Public Goods Charge and specified
how the remaining fund balance in the Renewable Resources Trust
Fund should be spent.
Proposed Law: AB 723 would reestablish the authority to collect
the Public Goods Charge until January 1, 2020. The bill requires
all funds collected by the utilities under the Electric Program
Investment Charge to be transferred to the California Energy
Commission. The bill specifies that the Public Goods Charge
shall supersede any collections for the Electric Program
Investment Charge.
The bill creates a new Clean Energy Investment Program, under
the California Energy Commission, to support renewable energy
projects.
The bill specifies that funds in the Renewable Resources Trust
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Fund are eligible, upon appropriation of the Legislature, for 1)
support of the New Solar Homes Partnership, 2) grants to
counties for planning purposes, 3) grants to school districts
for technical education, and 4) implementation of the Clean
Energy Investment Program.
The bill is contingent on enactment of SB 870 (Padilla).
The bill is an urgency measure.
Related Legislation:
AB 1303 (Williams) would extend the sunset of the research
and development program operated by the California Energy
Commission that was supported by the Public Goods Charge.
That bill is in the Senate Energy Utilities and
Communications Committee.
SB 35 (Padilla) would repeal the Public Goods Charge and
the programs supported by it, and create a new research and
technology program. That bill is in the Assembly.
SB 870 (Padilla) would create a new California Energy
Innovation Program, to fund energy-related research and
development projects, to be funded by a reauthorized Public
Goods Charge. That bill is in the Assembly.
Staff Comments: Under the California Constitution, the Public
Goods Charge is a tax. While the bill specifies that the
revenues would be deposited in the Renewable Resources Trust
Fund, revenues collected from the Public Goods Charge would be
General Fund revenues, regardless of their use.
The only costs that may be incurred by a local agency under the
bill relate to crimes or infractions. Under the California
Constitution, such costs are not reimbursable by the state.