BILL ANALYSIS                                                                                                                                                                                                    �




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                          SB 35 (Padilla)
          
          Hearing Date: 05/26/2011        Amended: 04/26/2011
          Consultant: Brendan McCarthy    Policy Vote: EU&C 10-0
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          BILL SUMMARY: SB 35 repeals the existing public goods charge 
          paid by electricity ratepayers. The bill creates a new 
          energy-related research, development, and demonstration program.
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                            Fiscal Impact (in thousands)

           Major Provisions         2011-12      2012-13       2013-14     Fund
           
          Reporting              Minor costs                      General 
          *

          * Public Interest Research, Development, and Demonstration Fund.
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          STAFF COMMENTS: SUSPENSE FILE.  AS PROPOSED TO BE AMENDED.
          
          Under current law, customers of the state's investor owned 
          utilities pay a public goods charge on their electricity bills. 
          Revenues from the public goods charge pay for programs to 
          support energy efficiency, renewable energy, and public interest 
          research and development. The Public Interest Energy Research 
          Program is funded with $77 million per year from the public 
          goods charge and is administered by the California Energy 
          Commission. The Public Interest Energy Research Program provides 
          research funds for new and emerging energy technologies that 
          would not otherwise be funded from private or academic funds.

          The authority to collect the public goods charge sunsets on 
          January 1, 2012. (There is a separate $24 million per year 
          research program that is funded by a surcharge on natural gas 
          customers. That program does not have a sunset date and is not 
          impacted by this bill.)

          SB 35 repeals the authority to collect the public goods charge 
          and the statutes that direct how resulting revenues are spent, 








          SB 35 (Padilla)
          Page 1


          including the Public Interest Energy Research Program.

          The bill creates a new California Energy Research and Technology 
          Program, to be overseen by a new council with specified 
          membership and administered by the California Energy Commission. 
          The bill includes criteria for governing the program and 
          prioritizing research funding. The bill requires the Energy 
          Commission to establish criteria for tracking the outcomes of 
          research funded under the program and requires the Commission to 
          establish terms for sharing intellectual property interests or 
          royalties from research funded under the program. The Energy 
          Commission is required to report annually to the Legislature on 
          program activities.

          The bill does not specify the size of the new program or the 
          funding source. Based on the operation of the existing Public 
          Interest Energy Research program, the proposed program costs are 
          likely to be in the tens of millions per year.


          SB 410 (Wright) extends the sunset of the Public Interest Energy 
          Research Program. That bill will be heard in this committee.

          AB 723 (Bradford) extends the sunset of the public goods charge. 
          That bill is in the Assembly Appropriations Committee.

          AB 1303 (Williams) extends the sunset of the Public Interest 
          Energy Research program. That bill is in this Assembly 
          Appropriations Committee.


          The proposed Committee amendments strike the contents of the 
          bill and require additional reporting on the Public Interest 
          Energy Research Program.