Assembly Standing Committee on Utilities and Energy
- Cottie Petrie-Norris
Legislator
Good afternoon, everyone, and welcome. I would like to convene today's hearing of the Assembly Committee on Utilities and Energy. Before we move to the agenda, I do have a few housekeeping announcements to make. We have three measures on the agenda. Two are on consent. Assembly Member Rebecca Bauer-Kahan will be absent from today's hearing. As is customary, I will maintain decorum during the hearing. In order to hear as much from the public within the limits of our time, we will not permit conduct that disrupts or otherwise impedes the orderly conduct of legislative proceedings.
- Cottie Petrie-Norris
Legislator
Any individual who is disruptive may be removed from the room. Please note that witness testimony is limited to four minutes total; two minutes in support, two minutes in opposition. For any additional witnesses on a measure, please only state your name, position and affiliation, if any. Madam Secretary--we do not currently have a quorum, so we're going to go ahead and begin today's hearing as a subcommitee. We will go ahead and--is our author here? Yes. Excellent. Okay. We are going to go ahead and jump into the one item on our agenda that's up for presentation. So item number one, AB 1912 Assembly Member Pacheco. Good afternoon.
- Cottie Petrie-Norris
Legislator
We're one short of a quorum. So for any of our UNE members whose offices are watching this, please send your members here. And we, while we had you, may go ahead and begin.
- Blanca Pacheco
Legislator
Thank you. Good afternoon, Chair and Members of the Committee. I am here to present Assembly Bill 1912, and I will be accepting the committee's amendments. California's are struggling with skyrocketing costs of goods and services, with low-income customers disproportionately burdened.
- Blanca Pacheco
Legislator
For example, in San Diego's gas and electric service territory, about 23% of average rates are attributed to legislative-mandated costs. 5% of that is associated with public purpose programs such as net energy metering, which creates an added cost to people who don't have solar on their homes. When the legislature considers proposing new programs and requirements, we should look at how existing programs may be leveraged rather than duplicated, and consider the costs of new programs to reduce the rate impacts.
- Blanca Pacheco
Legislator
AB 1912, with the committee amendments, directs the California Council on Science and Technology to prepare a written analysis that includes relevant data on the efficacy, cost impact, and overall effect of each proposed legislative mandate prior to a vote in legislative policy committees. This measure is modeled after the existing process of the Assembly Health Committee's review of new bills that affect health care affordability, known as CHBRP.
- Blanca Pacheco
Legislator
AB 1912 will provide legislators with third-party detailed technical and academic data about proposed legislation that will result in rate or bill increases. Legislators will be able to use this additional information to shape energy policy that both accelerates the state toward meeting its climate goals and keeps electric rates affordable. This bill requires IOUs to pay for this report and specifically states that large electrical corporations shall not recover the cost from its ratepayers.
- Cottie Petrie-Norris
Legislator
All right. Wonderful. We do have a quorum. You may continue. Thanks.
- Blanca Pacheco
Legislator
Thank you, Chair Members. Good afternoon. My name is Lourdes Ayon, and I'm the manager or in-house lobbyist for San Diego Gas and Electric. Very happy to be here.
- Blanca Pacheco
Legislator
With me today is a witness in support, Lourdes Ayon, the Manager of State Government Relations for San Diego Gas and Electric.
- Cottie Petrie-Norris
Legislator
And before we move to the witness testimony, we'll just pause for a moment so that we can establish a quorum. Madam Secretary, please call the role.
- Committee Secretary
Person
[Roll Call]
- Lourdes Ayon
Person
Wanted to talk to you guys about this bill as well. AB 1912 is going to inform the Legislature about ratepayer cost of each mandate. Right? So, as it currently stands, when the legislature looks at bills, we're looking at the state impact and not necessarily the impact on each person's pocket. At the end of the day, our customer's and ratepayers' pockets.
- Lourdes Ayon
Person
And the bill is going to be requiring a credible source to tell the Legislature and inform you all of what that cost will be of any electric mandate that you may be looking at. I know I would want to know that if I were in your seat, for sure. Like, what is the final cost going to be to ratepayers? I know I want to know in this seat.
- Lourdes Ayon
Person
I'm from San Diego originally, and my mom is a San Diego gasoline electric customer, she will call me and ask me if SDGE could please lower her bills. And I can't do that for her. And it's funny, and it's also sad because she doesn't understand the bigger process that goes into actually creating rates and how policy is driving a lot of those rates. I can't explain that to her.
- Lourdes Ayon
Person
I have an example for you in terms of why it's important to look at what the final cost is going to be in 2020. Assemblymember Ting, via AB 841, presented a fantastic bill on energy efficiency for schools. And that Bill we supported and in concept was amazing and we liked it. And the analysis that came out, this is one of the last analysis, as this was in the Senate for concurrence.
- Lourdes Ayon
Person
The analysis stated that the bill would cost, as a rough estimate, $20 million over five years to ratepayers. And as we're looking at this bill now, in 2024, not even the five years is up. The actual cost of that bill has been, by our analysis, in real-time, that cost has been 743 million between the three IOUs. And so for us in particular, that Bill is costing 117 million to our ratepayers.
- Lourdes Ayon
Person
Now, the importance of having a third party entity inform the legislature about real-time actual costs is so that we are looking, and by we, I mean because we're partners in this, in looking at programs and to see how it's going to actually affect versus just having a rough estimate and not really knowing what's going to happen in the future.
- Lourdes Ayon
Person
So I'm really excited about this particular bill because having additional information will help me, I think, answer questions for my own parent, right, who is on a fixed income and who, I'm afraid of what is going to end up happening to her when each year her bill keeps going up even though she's still on care, those bills still go up. And at the end of the day, I end up helping her, and I don't mind doing that.
- Lourdes Ayon
Person
But when I think about other people within the state of California that can't do know, I genuinely worry. And I think that this, in terms of affordability, this bill is one that can help address some of these issues and hopefully provide more information so you all can make better decisions on while voting. Thank you.
- Cottie Petrie-Norris
Legislator
Thank you. Do we have any primary witnesses to testify in opposition? I don't believe so. Okay. Seeing and hearing none. Do we have any witnesses in the hearing room in support?
- Cottie Petrie-Norris
Legislator
You can go ahead and approach the microphone. Seeing none. All right. Any witnesses in the hearing room in opposition? All right. Seeing and hearing none. We'll go ahead and open it up to the Committee. Questions? Comments? Assemblymember Patterson.
- Jim Patterson
Person
Thank you. I do have some concerns about the bill. One of the concerns I have is: does the bill look back to the old mandates? In other words, what I'm concerned about is if this is only going forward, we're effectively freezing those mandates into place. Can you speak to that? We're not going to undo any of the mandates that have gotten us here.
- Lourdes Ayon
Person
No, this bill does not undo the mandates. Moving the ones from the past. We're looking at mandates moving forward. So, the PUC, as it stands, can do that. The CPUC can actually look at the old mandates and to look at actual costs. They have a yearly report that they provide. I think they're working on one right now on gas and how much that cost, what was the actual cost? So they are able to do that.
- Lourdes Ayon
Person
I don't know how often that is happening or where you're, well, other than the yearly report, what the legislature is actually doing with those numbers. But this would have these numbers before they happen. Right. Hopefully, we can have those numbers before the measures are voted on. Undoing existing existing law would be up to the legislature and PUC to look at. I mean, can we add that to this bill? Maybe it might complicate it more, but sure, that's an idea.
- Lourdes Ayon
Person
But I think that it can already be done now. The PUC can do that now.
- Jim Patterson
Person
Yeah. So, what I gather from this. We're basically freezing where we are and then we're relying on the PUC to look backwards. You know something? I've been on this committee now what going on 12 years. Where's the PUC? Why aren't you here? The testimony here is the PUC can do things like this. Why aren't they doing it? And why, then, are we putting that cost on the utilities? Seems to me we're freezing the rate increases where they are. This is especially of concern for me in my region because PG&E serves that region.
- Jim Patterson
Person
And the bill basically says that you're going to slice up to $2 million based on the size of the marketplace and all of that, which means a big chunk of this is going to end up in the cost of electricity in Central California. So my question is, if the PUC can do this, why does the bill put the burden of paying for this on the utilities? They're not creating the mandates. They have to live with them.
- Jim Patterson
Person
They pay a lot of attention to customers and their concerns. And so I'm concerned, number one, that this isn't looking forward, it's looking forward, but it's freezing everything where it is. And number two, I think we have missed the opportunity to require the PUC to do what it's supposed to do. I know that you had a conversation with my ledge Director, and he's here, and this was a solicited call, and you called as a courtesy, and you had this conversation.
- Jim Patterson
Person
My understanding is that there is some interest in moving who pays for this from the utilities to the PUC. And the testimony has been that the PUC annually can actually conduct things like this. And so what I heard from my ledge director was a willingness to perhaps move this to the PUC. Is that a fair recollection of that conversation?
- Lourdes Ayon
Person
So, we are open to whatever entity is going to provide the information ahead of time. So, PUC seems like a natural fit for providing this information. One, because they already do it. They should be doing it. You all had an oversight hearing last week on it, holding them accountable for not providing enough information or maybe not regulating in the way they're supposed to be regulating. And so this particular piece to me feels like, yeah, PUC should absolutely do that.
- Lourdes Ayon
Person
They have a $1.9 billion budget that could probably cover the 70 or to 100 bills related to electricity that come through this committee and through the legislature in general. Yeah, that would be great if they could do that. And part of the rates or the piece in which we pay the costs that are incurred, it's part of those fees that are incurred in working with the be part.
- Lourdes Ayon
Person
We would still be working with the PUC to pay some of those fees in providing that report as well. It would be a natural fit.
- Jim Patterson
Person
Yeah. My conclusion in looking through the bill and thinking about it seriously and retrospectively with my 11-12 years here, my takeaway is this is late in the game. Look, I was Mayor Fresno for eight years, two and a half $1.0 billion budget. I understand that funds and money is fungible, all right? And I know that the bill says that can't have any of this go to the ratepayer. But you know something?
- Jim Patterson
Person
What happens behind the scenes and with the accountants and a column over here and a minus column over here and a plus column over here? This goes into a big pot, and that big pot makes up the expenses and the cost. So why even run the risk? Why not mandate and require that the PUC do its job and they're capable of doing it? They have the budget to do it.
- Jim Patterson
Person
The bill, in principle, I think, is trying to accomplish something that we should have been doing a long time ago. And as Vice Chair of this committee, I warned about these kinds of things 5,6,10 years ago. And here we are living in a time when our mothers can't afford to pay their electrical bills. This is the real world we're living in. And so I also see the failure here of where was the PUC through all of this. If they can do it, why aren't they?
- Cottie Petrie-Norris
Legislator
And if I may, and I have some comments and questions for the author, but I want to make sure that in today's hearing and moving forward that we recognize, I mean, one of the concern that you're raising is that we're late in the game and that we should have been doing this for a long time. Well, what I want us to do in this committee is not relitigate the past.
- Cottie Petrie-Norris
Legislator
I want us to focus on the policies and the policy changes that are going to help us move California productively and hopefully in a way that makes utility prices more affordable. And I know that you are deeply committed, as am I, to lowering the cost of utilities for Californians. And I appreciate that.
- Cottie Petrie-Norris
Legislator
And I would say if there's concern about previous legislation or existing mandates, I know that I, and I'm sure other committee members, would welcome an opportunity to review an additional piece of legislation from your office that focuses on evaluating those mandates.
- Jim Patterson
Person
Well, again, I appreciate the Chair's words here, but we just got a confirmation from the chair that this essentially freezes.
- Lourdes Ayon
Person
It does nothing to freeze anything. I don't know why you keep saying.
- Jim Patterson
Person
That is because I've been 11 years, we've tried repeatedly to change course, and it doesn't happen. And here we are with a set of rates, particularly PG&E in my neck of the woods, that's exorbitant and I keep coming back, "To where is the PUC?" They should have been here all along, hearing these bills in the last 10 years and advocating and talking to us, and maybe even warning us about the implication.
- Jim Patterson
Person
We heard the testimony here that what initially was $20 million over a period of time turns into, what, 100 and some odd million?
- Lourdes Ayon
Person
743,000,000.
- Jim Patterson
Person
743,000,000, almost $1.0 billion now. Are ratepayers having to take care of that?
- Lourdes Ayon
Person
Yes.
- Jim Patterson
Person
So again, I'm just reminding us going forward, I think the implications of the bill are supportable, but I just don't like who is having to pay the bill pay the freight because, after being here a while, I appreciate what the official position is going to be with respect to ratepayers and all of that and what the bill says. Do you know something? I'm a little jaded.
- Blanca Pacheco
Legislator
And I'll just say that I completely understand your position and your frustrations. Like the Chairwoman mentioned, the existing mandates will stay in place, but at least this will give us an opportunity to have a separate analysis as to the impact on ratepayers. And I believe we just need to move forward and do better for California. But I completely understand your frustration. I get it.
- Blanca Pacheco
Legislator
But this bill in front of us is just going to give us an independent analysis so that way we, as legislators, are informed.
- Cottie Petrie-Norris
Legislator
All right, moving on. Assemblymember Ting, thank you.
- Philip Ting
Person
I do agree with my colleague from Fresno that the PUC should be here. My understanding was in years prior to us joining this committee that they were here. I do remember the bill, AB 841. I don't know that I would agree with the way that it's being characterized. So we'd be happy to go back through that again. The money that we ended up spending out of that bill was for energy efficiency and for a number of efficiency programs and money that was sitting in the PUC.
- Philip Ting
Person
There are a number of programs within the PUC, ratepayer programs, where they literally hundreds of millions of dollars just lying around there. And this was a fund that I was very familiar with, ratepayer funded for energy efficiency, that literally the money never went out the door. So, I don't know exactly how you got that figure. My recollection, I'm happy to go back through it, was that that was money that was sitting at the PUC. It was not additional ratepayer funds.
- Philip Ting
Person
And so I don't really agree with the characterization. Having said this, I do have a question because I know these are committee amendments. I supported the bill when it was UC Berkeley doing the analysis. I have some concerns with the California Council on Science and Technology. I guess I would address this back to the chair and just understand why this agency. I don't think this agency has really any in particular expertise in this area. They do maybe one or two reports an entire year.
- Philip Ting
Person
I don't know how they would keep up with this kind of volume. Going back to PUC, we have an office of ratepayer advocates. Their entire job is to do ratepayer analysis, advocate for the ratepayers. I don't know why we're not asking them to do the analysis or perhaps LAO or some other agency that is really. Well, I know these are not your amends. These are the Chair's amends.
- Philip Ting
Person
I just go back to the committee and just understand this agency, their primary function is to do the science fellows program, not to do research. So I'm just trying to understand. I have concerns about substituting this agency into this bill.
- Cottie Petrie-Norris
Legislator
And thank you for that question. And I would say there's been quite a lot of discussion with the author's office about the appropriate place to house this analysis function. As you may recall, in 2019, I don't have the bill in front of me. 1083, which was a bill by our colleague, Assembly Member Burke, had established a similar requirement. Again, there had been a lot of back and forth about whether should be housed at the UC, housed at CCST.
- Cottie Petrie-Norris
Legislator
Ultimately, the reason the decision was taken to support CCST was twofold. Number one, they were willing to do it. And number two, I think the committee's assessment is that they will be responsive to the needs and the timeline of the legislature in order to quickly turn around analysis that we can act on because I think the anticipation is that there will be quite a volume of legislative proposals that they're having to analyze and consider.
- Philip Ting
Person
Got it. And we don't think that the office of ratepayer advocate would do it.
- Cottie Petrie-Norris
Legislator
That's an interesting-
- Philip Ting
Person
Given that this is supposed to be their job. The coalition-
- Cottie Petrie-Norris
Legislator
That is an interesting alternative.
- Philip Ting
Person
I like the idea. I like the bill. I don't want to be throwing a monkey wrench into this thing, but to me-I like the bill. I just want to make sure we choose an agency that can accomplish what we all want to do.
- Blanca Pacheco
Legislator
And I am open to that, whoever that agency will be.
- Cottie Petrie-Norris
Legislator
Thank you.
- Blanca Pacheco
Legislator
Thank you.
- Philip Ting
Person
Well, that's why I said office of ratepayers because that is their job. So I guess, given this, I'll vote for the bill today in hopes that you will continue to try to iron this out.
- Cottie Petrie-Norris
Legislator
Yes. I have all the faith in the world that the author will ensure that we hazard at the optimal location. Assemblymember Wood.
- Jim Wood
Person
Thank you. First of all, thank you for bringing the bill forward. I happen to really like this idea. I worked with CHBRP for eight years as the Chair of the Health Committee. CHBRP is funded by a small annual assessment on health plans, the ones directly affected by mandates. So in my mind, it actually makes sense for the utilities to pay for this because they're the ones who are affected by the mandates.
- Jim Wood
Person
And by extension, you could say that the ratepayer, the consumer in the health industry, is paying when these mandates are added and their bills go up, or their insurance rates go up. So, I think it actually makes perfect sense to leave it the way it is. Now, the challenge becomes with, Madam Chair, is that my colleagues didn't like me very much at times when I mandated that any bill that was going to be a mandate, that I required that any bill that was going to be a mandate on insurance companies go through the process prior to being heard in committee. And I think that while it's not in the bill, hopefully, that could be a committee rule going forward because I think it does provide really valuable information to people.
- Jim Wood
Person
Now, the other part of CHBRP is that it is a task force that's put together with experts, and then it could be fluid. In other words, they don't necessarily have all the experts that could answer the questions, but they could reach out to people to have input on the policies, so I don't...I have a problem with actually moving it to the PUC. They're the regulator, and they're also going to be lobbied by people as well. So I have a problem with that.
- Jim Wood
Person
And I see this also as a healthcare provider, this is kind of a preventive thing. We should know up front what the impacts of things are going to be. And while it is late in the game, I'd say it's better late than never. Quite frankly, going forward, we are going to see more and more potential mandates, I believe, on utilities going forward. That's kind of the nature of the committee over the years. And so I think this makes perfect sense.
- Jim Wood
Person
And we can hopefully fine tune who does it under what auspices. But I don't think that that central entity that does this is necessarily going to be always composed of the same people putting input into the report. So I think it's a great bill. I'd love to be added as a co-author. If it moves out of committee, it's I think it's high time. Thank you.
- Cottie Petrie-Norris
Legislator
Thank you, Assemblymember. Assemblymember Zbur.
- Rick Chavez Zbur
Legislator
So I actually like this bill a lot. Thank you for bringing it. Actually, I'm not going to take too much time because Assemblymember Wood, I think, stated a lot of my views about this one. I don't think that it should be moved to the PUC. I think that they are the regulator. They're the subject of a lot of the mandates. I think you need someone that's independent. I don't have strong views about what the committee did.
- Rick Chavez Zbur
Legislator
I do sort of like the rate-payer advocate idea. But I think this is a really good bill. I mean, we are going to be making really important decisions that potentially affect the ratepayer to achieve our climate goals over the course of the next decade. And often we have incomplete information that our staff, given everything that they've got to do, has limited resources. And having this bill, I think, is a really good thing to bring information to legislators as we're making all these decisions.
- Rick Chavez Zbur
Legislator
And I agree that the CHBRP model is a good one, and I think it has resulted in protections for consumers. And so I'm fully behind the bill. Thank you for bringing it and I plan to support it.
- Cottie Petrie-Norris
Legislator
Thank you. Assemblymember Joe Patterson.
- Joe Patterson
Legislator
I'm looking forward to a year of that. Yes, I'm Joe Patterson. I've only been here. This is my first bill hearing. I really like this idea a lot. I think Assemblymember Wood, not everybody disliked you, and just so you know.
- Jim Wood
Person
The policy not... hopefully not, no.
- Joe Patterson
Legislator
But sitting on Health, I did think it was a great policy to have that beforehand. Otherwise there's no use in the information. It helped, and there were plenty of times when there would be crazy numbers, and it was going to be expensive, and people voted for it anyway. But at least the public knew, and the policymakers who were going to be voting on that news. So I think this is a great idea. We should do it for more policies passed in this place.
- Joe Patterson
Legislator
I think there can be some discussion on how it's paid for and things like that, and I think those are fair discussions. I think there's plenty of money out there right now, but I don't object to how it's put in the bill right now, and I support it, as is whether CCST does. I think we need to have it at the most efficient place and also most experienced know whatever we can find with those two things.
- Joe Patterson
Legislator
I do have concerns about sending this to, uh, government bureaucracy to do it. I think it'd be more expensive, and it might just be honest, be slower. So we need the information when the bills are presented. But anyway, I think this is a great bill. Happy to support it today and looking forward to watching it as it goes through the process.
- Cottie Petrie-Norris
Legislator
Thank you, Assemblymember Connolly, and then.
- Damon Connolly
Legislator
Thanks, Chair, and I also appreciate the think. You know, I'll fully agree on the strong sentiment you're hearing that we understand the impetus behind this bill, the affordability that our constituents are facing around rates, frankly, the exorbitant rates right now. So I'm going to be a supporter, but maybe in the context of some additional discussion, potentially as the analysis, which I thought was really good, described, this bill would highlight the costs of new legislative mandates, but not other drivers of costs.
- Damon Connolly
Legislator
So, for example, the committee analysis highlights the findings of a recent state audit that increases in IOU operating costs are also contributing to increased rates, with some specific examples around that.
- Damon Connolly
Legislator
So, while I'm in favor of having more information on how legislation will affect ratepayers, I think in terms of overall transparency and to address the issues, I'm concerned that having information about one type of driver of rates without having similar information on other rate drivers could bias the affordability discussion, for example, maybe weighting against public purpose programs, which is kind of what we oftentimes bring forward, while other drivers of rate increases receive less scrutiny.
- Damon Connolly
Legislator
So I'd love to see a way to minimize that potential problem if you will. But I see it more as ongoing discussions.
- Eloise Gómez Reyes
Legislator
Thank you. I agree with my colleagues that energy affordability, it's a crisis, and we need to figure out a way to deal with this. Having more information will always make it easier, but I'm just not sure, and maybe my colleague, Dr. Wood, the way they've done it in health, but I'm just not sure on how practically we are going to be doing this. And I'm talking about members, our staff, and even committee staff on how the process will go.
- Cottie Petrie-Norris
Legislator
Thank you. Assemblymember Reyes.
- Lourdes Ayon
Person
So in the amendments that we took for the bill, there was language in there that changed that around, where it provides a little bit more flexibility in terms of timing. And so we're not looking at a particular 60 days versus 45 days, as the Chair had mentioned earlier.
- Eloise Gómez Reyes
Legislator
So the language says that before the bill gets heard in a policy committee, a written analysis shall be prepared on the cost to the ratepayers. So my question is, how would that work? If a bill gets amended late in the process to include language that would constitute a mandated program or requirement, will it have to wait until the analysis is completed?
- Eloise Gómez Reyes
Legislator
The way that I would see it is that this is going to lead to bills that are amended late, and they may die or get stalled out because we don't have the clarification, we don't have the analysis.
- Lourdes Ayon
Person
So, there's more flexibility in the amended version of the bill. That said, the piece about whether or not an amended bill later on in the process. What do we do with that? We still have to have more discussion about that, and maybe Assemblymember Wood may have more information on that as well, as he's actively in this process as well. So maybe he could share a little bit more about that, too. But we're happy to continue the discussion.
- Jim Wood
Person
Interestingly enough, certainly in the healthcare space, as we know, just think about our own appropriations process, the trend is usually to making bills less costly, not more costly. So we obviously can't control what happens in the Senate, and there might be a Senate amendment, but that would take a bill and then suddenly make it more costly to ratepayers.
- Jim Wood
Person
However, that bill has to come back on concurrence, and the committee chair could pull the bill back here and maybe not move the bill if that were to happen if the costs had been blown completely out of proportion. But in general, the policies, certainly in the health space, usually are moving towards less cost to the system rather than more cost. But you do bring up an interesting point.
- Jim Wood
Person
But I'm struggling to remember over the years, if that really ever happened related to health, the only time it ever really happened would have been a gut and amend, which would have been a completely different, completely different bill. And those in and of themselves create particular challenges for the legislature. But I look at this as a tool that gives more information at the time so that we can make a more informed decision. Is it going to be perfect? No, it's not.
- Jim Wood
Person
And I think that you have to look at it that way as we make decisions. I have to believe, because it ends up in our analysis, that appropriations looks at this as well, and their analysis of this is also helpful. So it's more information. I wouldn't say it's a perfect tool. And I know that, at times, members have been frustrated when they see the cost of a CHBRP report through the CHBRP report, and they might dispute that, but they're allowed to do that in committee.
- Jim Wood
Person
I think the challenge also becomes that as you have more and more bills, there were times when we actually had to push bills out to the very last hearing because you've got to know early on what bills are going to have significant costs. And so that made those last hearings, and sometimes bills became two-year bills because of the need to do a chip rip analysis by something that was introduced late.
- Jim Wood
Person
So I always try to encourage anybody who's doing bills in the health space to if you got a bill that's going to be a mandate, we need to know about it really quickly so that we can do an analysis so that we understand the implications to the entire system.
- Eloise Gómez Reyes
Legislator
Thank you. Also, the bill caps the tax at 2 million to do this work. But I understand that from the analysis that it appears that the cost is closer to 3 million. So my question is, are you planning on raising the amount or do you intend to cover the gap with other state funds?
- Lourdes Ayon
Person
That is a great question. At the moment. We provided this cap at 2 million.
- Lourdes Ayon
Person
Now, as we continue discussions or as we were going through the process and talking, we understood then that the current entity needed more money because of inflation or other costs. Now can we increase that cap? I don't know. We need to check further and have more discussions. Is that a possibility? Maybe, but I really don't know. I don't have an answer, but I can definitely get back to you on that. But certainly a point to discuss further.
- Eloise Gómez Reyes
Legislator
And I know when we're talking about mandates, some of the programs, it isn't because it's cost effective. It's because it's necessary for the future of society, future of California, maybe air quality, whatever the issue is, it isn't just a cost question. I would be concerned also that if we only look at the cost, then that would also skew it in favor of not requiring a mandate only because of the cost involved.
- Eloise Gómez Reyes
Legislator
And I can't help but, you know, with the reports that have come out regarding profits, then is the only issue. The only thing we look at is what's going to the taxpayers, or are we also looking at profits that have gone, those are sky high also for our utilities, according to the last hearing that we had, the Joint Hearing that we had. So I'll be supporting it.
- Eloise Gómez Reyes
Legislator
I think that this is a bill that's worth continuing in the process because the idea of energy affordability is extremely important, and we all hear from it from our constituents. Just trying to figure out the practicality of how it works would be important. And I'm sure that between now and the floor, we will have more answers.
- Lourdes Ayon
Person
And we are going to be continuing to have further discussions, as you can tell, even as to who's going to prepare the analysis.
- Lourdes Ayon
Person
We're going to continue having further discussions, so that way we can fine tune this Bill. But I think the important thing is just to make sure that legislators have the information that they need, and that way they can decide, or we can decide whether we should be supporting or not supporting a Bill. I believe the more information that we as legislators get is extremely important, and that's the whole purpose of this Bill. That concept is perfect. That part of it is perfect. Thank you. Thank you.
- Cottie Petrie-Norris
Legislator
Thank you. Assemblymember Holden.
- Chris Holden
Person
My question was basically answered in the comments from my colleagues. I would say I support the bill, but I would like to better understand in your example on the Ting bill how it went from 20 million to over 700 million because that does create an impression that there are excessive costs that now are being passed to ratepayers. And what we're trying to do figure out whichever agency ultimately does this work, that it be independent. So, I would ask this question.
- Chris Holden
Person
The example that you cited was that independent analysis, because when it goes on the record, it sort of sets an impression. So, I'm just curious as to how that number was determined.
- Lourdes Ayon
Person
That was not an independent analysis. This is an analysis of numbers that we have internally, just raw numbers that we have. I'm happy to provide and to follow up with both of you and provide those numbers to tell you how we came to that total cost.
- Chris Holden
Person
Right? Yeah, that would be helpful because I've noticed over the years that if things are going out on the microphone and people are saying, see, "This is exactly what I thought," and it wasn't independent. And other things are added to that cost that don't necessarily match up with what will be evaluated through this legislation, which I support, then it's a little skewed.
- Chris Holden
Person
And I'm not saying it was, but I would be happy to see the information so we can kind of ascertain just how that number was arrived at and what needs to be maybe separated out. Comparing apples to apples, if you.
- Lourdes Ayon
Person
Yeah, absolutely. We'll make sure that we get back not only to you and Mr. Ting, but to the entire committee so that everybody has those numbers.
- Cottie Petrie-Norris
Legislator
Mr. Ting.
- Philip Ting
Person
Just to clarify. So my understanding is, again, the $20 million estimate was a typical Department of Finance estimate as to the cost for the state. The $743,000,000 that you're referring to is money. That was the cost to the ratepayer. Now, the difference is it was not an additional cost. What the bill did was appropriate or asked the PUC to spend money that already was in their budget, that was already money that had already been taken by the ratepayers from the ratepayers for energy efficiency.
- Philip Ting
Person
This is a fund that has existed for many, many years, and quite often, the PUC, in my opinion, does a poor job of spending that money. So oftentimes you'll find, I haven't looked at it recently, but oftentimes you'll literally find hundreds of millions of dollars just sitting there at the PUC that should be spent on energy efficiency, which is very important, very useful for many ratepayers, and it's not. And so that's what the bill.
- Philip Ting
Person
So I think your numbers are not really apples to apples, and I think that I just wanted to kind of clarify what I think you are trying to communicate because what the analysis did not talk about was the impact on the ratepayers, just the impact on the state budget. So I think that's one of the issues that we're trying to grapple with.
- Cottie Petrie-Norris
Legislator
Thank you. All right. Seeing no further questions or comments, I'll just say thank you for introducing this measure. I think it's really important and necessary as we are considering policy proposals in this committee. I think it's really important for us to be very clear eyed about the impact that those proposals are going to have on rates and on ratepayers. I think it really helps us make the right trade offs as we forge our clean energy future for California. So, with that Assemblymember, would you like to close?
- Blanca Pacheco
Legislator
Yes. Thank you, Madam Chair. I also want to thank the committee staff for all their hard work on this bill. I know there was a lot of back and forth, and I also appreciate all the discussions that were held and all the comments, questions. And as you can tell, we're still working out this bill, more work to be done, and I respectfully ask for your vote. Thank you.
- Cottie Petrie-Norris
Legislator
All right, we have a motion from Assemblymember Wood.
- Cottie Petrie-Norris
Legislator
A second from Assemblymember Wallis. The motion is do pass as amended to Appropriations. Madam Secretary, please call the roll.
- Committee Secretary
Person
Item number one, AB 1912. The motion is do pass, as amended, to appropriations.[Roll Call] I'm sorry, Jim Patterson.
- Jim Patterson
Person
We get this often. I appreciate the effort, but I do object to a couple of pieces in the bill, who's paying for it, and also the organization chosen to perform the analysis. And with these concerns, I will be abstaining but will certainly reserve my vote on the floor if, in fact, we can move the bill forward and sort of address some of these shortcomings.
- Cottie Petrie-Norris
Legislator
Thank you.
- Jim Patterson
Person
Thank you.
- Committee Secretary
Person
[Roll Call] That's 13, but we can rollover.
- Cottie Petrie-Norris
Legislator
All right, so 13-0. That bill is out, and we'll leave the roll open to enable absent Members to add on. Thank you. With that, let's go ahead and move to our consent calendar. Let's see.
- Cottie Petrie-Norris
Legislator
We have two measures on today's consent calendar. AB 1918 from Assembly Member Wood and AB 2092 from Assembly Member Mathis. Do we have a motion and a second? All right, motion and a second. Madam Secretary, please call the roll on the consent file.
- Committee Secretary
Person
Item number two, AB 1918, the motion is do pass as amended to Business and Professions. Item number three, AB 2029, the motion is do pass as amended to Appropriations. I'm going to say that again. Item number three, AB 2092, the motion is do pass as amended to Appropriations. Petrie-Norris. Aye. Jim Patterson. Aye. Calderon. Aye. Chen. Aye. Connolly. Aye Friedman. Aye. Holden. Aye. Joe Patterson. Aye. Reyes. Aye. Santiago. Aye. Schiavo. Ting. Aye. Wallis. Aye. Wood. Aye. Zbur. Aye.
- Cottie Petrie-Norris
Legislator
All right, that is 13-0, 15-0. Okay. Sorry. 13-0, and we'll keep it open for our absent member to add on.
- Cottie Petrie-Norris
Legislator
All right. Madam Secretary, let's go ahead and open the roll so that absent members may add on. Please call the roll.
- Committee Secretary
Person
Sorry. Item number one. AB 1912. The motion is do pass as amended to Appropriations. Schiavo. Aye.
- Cottie Petrie-Norris
Legislator
All right, that bill is out. 14-0.
- Committee Secretary
Person
The consent file. Item number two, AB 1918, do pass as amended to Business and Professions. Item number three, AB 2092, do pass as amended to Appropriations. Schiavo. Aye.
- Cottie Petrie-Norris
Legislator
All right, 15-0. Those bills are both out. And that concludes the business of today's hearing of the Utilities and Energy Committee. With that, we are adjourned.
Bill AB 1912
Electricity: measures imposing mandated programs and requirements: third-party review.
View Bill DetailCommittee Action:Passed
Next bill discussion: May 22, 2024
Speakers
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