AB 565

Current law requires the Public Service Commission (PSC) to require

investor-owned electric and natural gas public utilities to spend 1.2 percent of their

annual operating revenues on certain energy efficiency, conservation, and renewable

resource programs. Subject to the approval of the Joint Committee on Finance (JCF),

current law allows the PSC, until January 1, 2012, to require that such utilities

spend a greater percentage of their annual operating revenues on such programs.

The PSC may require a greater percentage based on its consideration of the following

factors: 1) studies of the potential energy-efficiency improvements that could be

made in the state; 2) the potential short-term and long-term impacts on electric and

natural gas rates; 3) alternatives for mitigating such impacts; 4) the impact on the

continuation and effectiveness of existing energy efficiency and renewable resource

programs; 5) the impact on the reliability and adequacy of systems for the generation

and transmission of electricity and the transmission of natural gas; 6) societal

impacts; 7) the potential for displacing or delaying construction of electric generating

plants and transmission lines; 8) economic impacts that are likely to accrue from

reducing expenditures on coal, natural gas, fuel oil, and other fossil fuel imports; and

9) any other relevant factors. The PSC must submit a proposal for a greater

percentage to JCF. If the cochairpersons of JCF do not notify the PSC within ten

working days after submission of such a proposal that JCF has scheduled a meeting

to review the proposal, the PSC may require that the utilities spend the greater

percentage. If the cochairpersons of JCF do notify the PSC within ten working days

after submission of such a proposal that JCF has scheduled a meeting to review the

proposal, but JCF does not object to the proposal within 90 days of providing the

notification to the PSC, the PSC may require that the utilities spend the greater

percentage. However, if JCF objects to the proposal within such 90-day period, the

PSC may not require that the utilities spend the greater percentage.

Effective January 1, 2012, the 2011 executive budget act repeals the provisions

of current law that allow the PSC to require the utilities to spend a greater

percentage on the programs. As a result, after January 1, 2012, the PSC must

require the utilities to spend 1.2 percent of their annual operating revenues on the

programs. This bill eliminates that repeal. Under the bill, after January 1, 2012,

the PSC may, based on the factors described above and subject to JCF approval as

described above, require that the utilities spend a greater percentage of their annual

operating revenues on the programs.