BILL ANALYSIS �
SB 115
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Date of Hearing: August 6, 2014
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
SB 115 (Hill) - As Amended: June 9, 2014
Policy Committee: Utilities and
Commerce Vote: 15-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill requires the California Energy Commission (CEC) to
include electrical grid safety projects in grants funded by the
Electric Program Investment Charge (EPIC).
FISCAL EFFECT
1)No additional state costs for the CEC.
2)Minor, if any potential funding shifts resulting from
expressly stating the eligibility of projects that advance the
safety of the electric grid. The safety of the electrical
grid is implicity included within existing eligible
categories.
COMMENTS
1)Rationale. According to the author, recent statutory changes
and decisions of the California Public Utilities Commission
(PUC) place a high bar on the use of rates to fund research to
improve the safety of the electrical grid. This bill
clarifies that the CEC is to consider funding safety research
the same as it considers funding renewable energy projects.
2)Background. Until January 1, 2912, the Electrical Utility
Industry Restructuring Act of 1996 authorized a temporary
surcharge on investor-owned utility (IOU) electric bills,
commonly referred to as the public goods charge, to fund the
Public Interest Energy Research (PIER) program and the
Renewable Energy Program administered by the CEC.
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From 1998 through 2011, a total of about $2 billion (or $150
million per year) from the public goods surcharge was spent on
the PIER program and Renewable Energy Program.
The PIER program provided grants for research to develop and
commercialize energy technologies to benefit natural gas and
utility customers. The Renewable Energy Program supported the
operations of existing renewable facilities and the
development of new and emerging renewable technologies.
Legislative attempts to reauthorize the public goods charge
failed and the surcharge expired at the end of 2011. In
response, Governor Brown directed the PUC to continue the
collection of a similar surcharge to support the continuation
of the programs previously funded through the public goods
charge. The new surcharge, the Electric Program Investment
Charge (EPIC), collects about $200 million from IOU ratepayers
annually.
3)EPIC and Electric Grid Safety. In December 2011, in response
to the Governor's directive, the PUC ordered electrical
corporations to collect funds from ratepayers to fund
research, development, and demonstration in Decision
11-12-035. In a Phase 2 decision (Decision 12-05-037), the
PUC established purposes and governance for these funds. In
this decision, the funding of projects are to be guided by the
demonstrated ability to produce ratepayer benefits defined as
promoting greater reliability, lower costs, and increased
safety.
According to the CEC, research and development under EPIC will
help further advancements including a modern, flexible,
technologically advanced electricity grid that is safer, more
reliable and gives ratepayers the ability to better control
energy use.
Historically, the CEC has conducted a number of research
projects through EPIC's predecessor program (PIER) related to
safety, including but not limited to projects to establish
interconnection rules for distributed generation facilities,
cybersecurity, and to improve natural gas system
infrastructure performance, reliability and safety.
Analysis Prepared by : Jennifer Galehouse / APPR. / (916)
319-2081
SB 115
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