BILL ANALYSIS �
SB 1268
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Date of Hearing: July 2, 2012
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Wesley Chesbro, Chair
SB 1268 (Pavley) - As Amended: June 25, 2012
SENATE VOTE : 33-0
SUBJECT : Energy conservation assistance
SUMMARY : Extends the sunsets of two California Energy
Commission (CEC) programs that provide low-interest energy loans
to local governments and schools - the Energy Conservation
Assistance Account (ECAA) from 2013 to 2028 and the Local
Jurisdiction Energy Assistance Account (LJEAA) from 2016 to
2028.
EXISTING LAW establishes the ECAA and the LJEAA to be
administered by the CEC. ECAA sunsets January 1, 2013 and LJEAA
sunsets January 1, 2016.
THIS BILL :
1)Extends the sunset of ECAA to January 1, 2028 and makes
related revisions:
a) Expands the definition of "energy conservation measure"
from reducing energy consumption to include reducing peak
electricity demand for purposes of ECAA.
b) Expands the definition of a "unit of local government"
to include a joint powers authority.
c) Gives the CEC greater discretion to establish a loan
repayment schedule.
d) Provides that any unexpended federal American Recovery
and Reinvestment Act (ARRA) funds remaining in ECAA in 2028
shall revert to the Federal Trust Fund.
e) Amends provisions enacted by SB 679 (Pavley) in 2011,
which provided for the reversion of Renewable Resources
Trust Fund (RRTF) funds unexpended as of 2013 to the
Alternative Energy and Advanced Transportation Financing
Authority's (CAEATFA) PACE Reserve and Clean Energy Upgrade
SB 1268
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Programs, to instead provide that any RRTF funds unexpended
as of 2028 shall be available for appropriation by the
Legislature for the benefit of ratepayers.
2)Extends the sunset of LJEAA to January 1, 2028 and makes
related revisions:
a) Decreases the minimum loan interest rate that may be set
by the CEC from 3 percent to 1 percent.
b) Provides that any unencumbered funds remaining in LJEAA
in 2028 shall be deposited in the federal Petroleum
Violation Escrow Account (PVEA).
3)Requires the CEC, for both ECAA and LJEA, to perform loan
solicitations in a manner that encourages an equitable
distribution of loans statewide, awards in regions with high
summer peak loads or that have electrical or natural gas
system distribution constraints, and places an emphasis on
offering these loans in disadvantaged communities.
FISCAL EFFECT : According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS :
According to the CEC, the ECAA program (established in1979) has
made loans to more than 800 entities totaling more than $208
million, with about 58 percent of the total loan amount going to
local governments, 12 percent to K-12 public schools, 10 percent
to public colleges, 10 percent to hospitals and public care
facilities, and 2 percent to special districts. Since 2000, the
program has provided $130 million in loan funds for lighting
(32%), LED traffic signals (6%), HVAC (27%), renewables (18%),
self-generation (13%) and other miscellaneous improvements (4%).
Funding for ECAA and LJEAA loans has been from a variety of
sources over the years, including the General Fund, PVEA, and
tax-exempt revenue bonds. Funding generally has been adequate
to meet demand for loans. More recently, the American Recovery
and Reinvestment Act of 2009 (ARRA) provided $25 million for
ECAA loans and about $34 million for CEC to award as grants to
279 small cities and counties for energy efficiency projects.
According to CEC staff, cities and counties seeking to leverage
the grant awards have applied for ECAA loans, leading to overall
demand for ECAA loans far exceeding available funds.
SB 1268
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Last year, SB 679 provided $25 million in RRTF funds previously
appropriated to CAEATFA for the PACE Reserve Program and
provided for the reversion to CAEATFA of any RRTF funds
unexpended as of January 1, 2013 for purposes of the Clean
Energy Upgrade Program established by AB1X 14 (Skinner). This
bill eliminates that reversion provision, which seems
unnecessary to the bill and may be moot if all RRTF funds are
committed by the end of 2012. According to CEC staff, ECAA
currently has about $30 million in unrestricted accounts, with
loan applications for about $12 million now under review. CEC
staff predicts that, with additional loan applications coming
in, remaining funds are likely to be encumbered by the end of
2012. The RRTF reversion provision (Section 8 of this bill)
also conflicts with SB 1128 (Padilla), which repeals and
reenacts the section in its current form (providing for
reversion to CAEATFA of funds unexpended as of January 1, 2013).
The author and the committee may wish to consider deleting
Section 8 to preserve the status quo with respect to last year's
legislation and resolve the conflict with SB 1128.
REGISTERED SUPPORT / OPPOSITION :
Support
League of California Cities
Natural Resources Defense Council
San Diego Gas & Electric Company
Sempra Energy
South San Joaquin Irrigation District
Southern California Gas Company
Southern California Edison
Opposition
None on file
Analysis Prepared by : Lawrence Lingbloom / NAT. RES. / (916)
319-2092