BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  AB 2450
                                                                  Page  1

          Date of Hearing:   May 9, 2012

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                    AB 2450 (Hall) - As Amended:  March 29, 2012 

          Policy Committee:                              
          TransportationVote:10-2

          Urgency:     No                   State Mandated Local Program: 
          No     Reimbursable:               

           SUMMARY  

          This bill requires the Public Utilities Commission (PUC) to 
          allocate at least $15 million annually from the Electric Program 
          Investment Charge (EPIC) to fund, upon appropriation by the 
          Legislature, the Air Resources Board's (ARB's) Clean Vehicle 
          Rebate Program (CRVP). The bill specifies this funding is to 
          supplement, not supplant, funding for the CVRP from other 
          sources.

           FISCAL EFFECT  

          1)Earmarks a $15 million annual allocation of EPIC monies for 
            clean vehicle rebates.

          2)One-time special fund costs of up $140,000 for an 
            administrative law judge to reopen a proceeding to integrate 
            the mandated $15 million expenditure and determine whether it 
            provides direct ratepayer benefits as required, and to adjust 
            other approved EPIC expenditures categories accordingly 
            through a stakeholder process. 

           COMMENTS  

           1)Background  . In 2002, the PUC issued a resolution implementing 
            the Public Goods Charge (PGC), a nonbypassable charge to 
            ratepayers, to fund various programs such as energy efficiency 
            programs, research, development and demonstration programs, 
            and renewables programs. The authorization to collect PGC 
            funds expired January 1, 2012 due to the failure of 
            legislation in 2011 that proposed extending this sunset date. 









                                                                  AB 2450
                                                                  Page  2

            In October 2011, the PUC opened a proceeding to consider 
            establishing EPIC and using the monies collected from 
            ratepayers for activities such as those previously funded 
            through the PGC. A public process has been underway at the PUC 
            to evaluate draft proposals regarding how EPIC monies should 
            be used. On April 24, the PUC release a proposed decision for 
            use of EPIC monies-totaling $145 million annually and 
            specifying the following three funding areas: (a) applied 
            research and development ($55 million); (b) technology 
            demonstration and deployment ($75 million) for pre-commercial 
            technologies and strategies; and (c) market research, 
            regulatory permitting and streamlining, and workforce 
            development activities ($15 million). 

           2)Purpose  . This bill, sponsored by the Alliance of Automobile 
            Manufacturers, requires the PUC to instead allocate $15 
            million from its EPIC program to the CVRP. According the 
            Alliance, the CVRP needs at least $60 million annually in the 
            foreseeable future to provide enough rebates to meet the 
            state's zero emission vehicle (ZEV) mandate. By allocating 
            EPIC monies into CVRP, rebates for ZEVs could continue despite 
            expiration of CRVP funding, pursuant to AB 118 (Nunez) of 
            2007, on January 1, 2016.

           Analysis Prepared by  :    Chuck Nicol / APPR. / (916) 319-2081