BILL ANALYSIS �
AB 2450
Page 1
Date of Hearing: April 23, 2012
ASSEMBLY COMMITTEE ON TRANSPORTATION
Bonnie Lowenthal, Chair
AB 2450 (Hall) - As Amended: March 29, 2012
SUBJECT : Electric Program Investment Charge: Clean Vehicle
Rebate Program
SUMMARY : Requires the Public Utilities Commission (PUC) to
allocate $15 million to fund clean vehicle rebates.
Specifically, this bill :
1)Establishes the Clean Vehicle Rebate Program Fund (Fund) in
the State Treasury.
2)Requires the PUC to allocate $15 million from the Electric
Program Investment Charge (EPIC) to the Fund.
3)Authorizes the California Air Resources Board (CARB), upon
appropriation by the Legislature, to use monies in the Fund
for rebates in accordance with criteria established in CARB's
Clean Vehicle Rebate Project (CVRP) program.
EXISTING LAW :
1)Provides the PUC with regulatory authority over public
utilities, including electrical corporations.
2)Required electric utilities to collect, until January 1, 2012,
a surcharge on bills based on electricity usage to fund energy
efficiency, renewable energy, energy research, development,
and demonstration.
3)Established, until January 1, 2012, specific minimum annual
collection amounts for the three largest investor-owned
utilities (Pacific Gas and Electric, Southern California
Edison and San Diego Gas and Electric) and provides for
adjustment according to the lesser of sales growth or
inflation:
4)Creates the Air Quality Improvement Program (AQIP) to fund air
quality improvement projects through 2015 funded by annual
vehicle smog abatement and vessel registration fees as well as
other, periodic supplements from the Public Interest Energy
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Research (PIER) Program and other sources.
5)Authorizes that the CVRP to accelerate widespread
commercialization of zero emission vehicles (ZEVs) and plug-in
hybrid electric vehicles (PHEVs) by providing consumer rebates
to partially offset the higher cost of these advanced
technologies and to help meet California's climate change
goals.
FISCAL EFFECT : Unknown.
COMMENTS : By introducing this legislation, the author intends
to supplement funding for ZEV rebates. To achieve this, the
author proposes to establish the Fund in the State Treasury and
require that the PUC allocate not less than $15 million from the
PUC's ratepayer-collected Electric Program Investment Charge
(EPIC) to the Fund. This bill also authorizes CARB, upon
appropriation by the Legislature, to use the money for
distribution as ZEV rebates pursuant to CVRP program criteria.
In 2002, the PUC issued a resolution implementing the Public
Goods Charge (PGC) to fund three various programs such as energy
efficiency programs, research, development and demonstration
programs, and renewables programs. The authorization to collect
PGC funds expired on January 1, 2012, and the Legislature failed
to pass a bill extending the sunset.
According to the sponsor, the Alliance of Automobile
Manufacturer's (Alliance), the PUC has administratively
continued PGC collection and bifurcated funding into two
programs. The Alliance notes that revenue from these programs
amount to approximately $634 million annually.
This bill requires the PUC to allocate $15 million from its EPIC
program to the Fund. The Alliance recently suggested, however,
that the EPIC may not be a suitable funding source and has
instead suggested utilizing PUC's energy efficiency program
funds.
According to the PUC, a public process is currently underway to
evaluate draft proposals regarding how EPIC monies should be
used. The current schedule for this process calls for a variety
of public hearings through the spring and early summer with a
final decision by the PUC scheduled to occur in August.
According to the PUC, a key issue for consideration in public
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process is ensuring that funds are allocated for activities that
offer clearly defined ratepayer benefits.
According the Alliance, CARB's CVRP needs at least $60 million
annually in the foreseeable future to provide enough rebates to
meet the state's ZEV mandate. By allocating PUC monies into the
Fund (which is separate from the CVRP but utilized for the same
purpose) rebates for ZEVs could continue despite expiration of
AB 118 funding for the CVRP on January 1, 2016 for AQIP.
Writing in opposition to this bill, the Pacific Gas and Electric
Company (PG&E) points out that AB 2450 would prejudge the
outcome of the PUC's proceedings to balance competing interests
and select the best possible use of ratepayer funds. PG&E
contends that it is unfair to utility customers who deserve the
potential benefits of other services to have those options
precluded if AB 2450 passes.
Committee concerns : Based on discussions with PUC, the Alliance
suggests that EPIC may not be an appropriate funding source for
the Fund. Instead, the Alliance suggests that the PUC's energy
efficiency program funding may be more appropriately allocated
for clean air vehicle rebates. The committee recommends that
the author and sponsor continue to work with the PUC with regard
to potential funding sources that may be suitable to meet the
bill's objectives without unduly impacting or otherwise
prejudging the PUC's ongoing proceedings.
Related legislation : AB 1608 (Wiecowski) of 2012, would
incentivize the purchase of zero emission vehicles (ZEVs)
manufactured in California by increasing buyer rebates by 20%
over rebates for similar vehicles manufactured outside of
California. That bill failed passage in the Assembly
Transportation Committee with reconsideration granted.
Previous legislation:
AB 1303 (Williams) of 2011 would have extended the sunset date
from 2012 to 2020 on the Public Goods Charge (PGC) for public
interest energy activities and the programs funded by the
Renewable Resources Trust Fund (RRTF). That bill died in the
Senate.
AB 723 (Bradford) of 2011 would have extended the the Public
Goods Charge until January 1, 2020, leaving in place existing
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allocations and reprogramed the energy efficiency program
currently implemented by the CPUC. That bill died in the
Senate.
SB 35 (Padilla) of 2011 would have repealed the California
Energy Commission's (CEC) Public Interest Energy Research
Program (PIER) and Renewable Energy Program (REP), as well as
the "public goods charge" and established the California Energy
Research and Technology Program (CERT) for the purpose of
funding energy-related research, development, and demonstration
(RD&D), but provides no funding. That bill died in the
Assembly.
SB 410 (Wright) of 2011 would have extended the sunset of the
Public Interest Energy Research Program to 2022. That bill died
in the Senate.
REGISTERED SUPPORT / OPPOSITION :
Support
Alliance of Automobile Manufacturers (sponsor)
Opposition
Pacific Gas and Electric Company
Analysis Prepared by : Victoria Alvarez / TRANS. / (916) 319-
2093