Date: Wednesday, April 25, 2001
Issue: Electricity Crisis, Potential Natural Gas Crisis
What is Happening: Check-in Session
BACKGROUND
"California could cut electricity consumption by as much as 4 percent this
summer under a plan that aims to shift the
way the cost of power is communicated and billed to the state's biggest
users. The $35 million program, which has
been endorsed by Gov. Gray Davis and is being considered by state
regulators, would entail installing 15,000 new
meters and upgrading 5,000 more to reflect the hourly price of electricity.
The state's largest users, (the 21,000
customers who consume more than 200 kilowatts of electricity at any given
time,) would receive the meters and have
the option of participating in "real-time" pricing. By using these meters,
they can moderate their behavior to use less
when supply is tight or more when it is available" (Contra Costa Times
4-24-01).
RECENT CHANGES AND DEVELOPMENTS
"SB 28X (Sher) passed out of the Assembly yesterday on a 67-4 vote. The
legislation is expected to cost the state $3.2
million to implement. Key provisions of SB 28x would: (1) Require cities,
counties and other local agencies to
submit initial comments on a power plant application within 45 days of its
filing. (2) Require the California Energy
Commission to issue final decisions on certifying "repowering" projects --
modernization of existing plants -- within
180 days, instead of a year. (3) Extend by 17 months -- until Dec. 31,
2002 -- an expedited siting process
for temporary power plants, known as "peakers." (4) Mandate that power
plants required to renovate their facilities
to reduce air pollution do so by Jan. 1, 2004, under the auspices of the
state Air Resources Board. (5) Require
payment of unemployment-compensation benefits to workers left jobless in any
week because of unscheduled power
outages caused by shortages of supply. (6) Provide incentives for
"distributed generation" in which homeowners or
merchants produce electricity for themselves and others using solar panels,
turbines or other such equipment. Utility
fees, called "standby charges," would be waived up to 10 years for most such
customers (Sacramento Bee 4-24-01). ?
"Los Angeles County government expects to nearly double its energy bill for
next year, from $75 million to a
whopping $140 million, a hike that will cut into the county's surplus and
could force service cuts if prices continue to
rise through what all sides predict will be a difficult year in the state's
energy crisis" (LA Times 4-24-01). "California
has spent $5.1 billion from the state budget purchasing electricity this
year" (LA Times 4-24-01).
WHAT THE REPUBLICANS ARE SAYING
Assembly Republicans supported SB 28x, which passed Monday by a vote of
67-4, but some said it doesn't go
far enough in solving the energy crisis. "We'd like to see more siting
bills," said Assemblyman Tony Strickland,
R-Thousand Oaks. "We need more electricity supply and generation. Anyone who
thinks this is enough to solve
the crisis is really in Disneyland."
The Assembly Republican Caucus ? Member Services Division
916-319-3901
THE GOOD, THE BAD, AND THE UGLY
"California's economy is decelerating, and the state is spending many
billions of dollars -- how many, exactly, is still
unknown -- on power purchases to prevent blackouts. The combined effect of
these separate, if interrelated, factors
is to hammer the state budget in ways that no one in the Capitol considered
possible. The Davis administration's
bean counters have concluded, Capitol sources said Monday, that the state's
revenues for the 2001-02 fiscal year will
run several billion dollars under forecasts, thanks largely to the severe
decline in the state's high-technology industry.
The state could absorb a sharp dip in its tax revenues if its reserves were
available. Davis had anticipated starting the
2001-02 fiscal year July 1 with $6.6 billion in general-fund reserves and
ending it a year later with nearly $4 billion still
in the kitty. The newly discovered revenue shortfall would have reduced the
reserves but not wiped them out. Those
numbers, however, don't take into account the nearly $6 billion that the
state has committed to buying power,
continuing at the rate of $2 billion a month, and only a tiny portion of the
outlay being covered by utility
ratepayers. At current rates, the state will be in the hole by $10 billion
by July 1" (Sacramento Bee 4-24-01).