(June 19, 2012) A California Chamber of Commerce-opposed bill that increases energy costs on consumers and businesses by allocating funds that should be used to mitigate ratepayer impact from the state’s cap-and-trade program to fund unnecessary and duplicative energy efficiency programs will be considered by a Senate policy committee today.
AB 1186 (Skinner; D-Berkeley) which would direct 10% of the Investor Owned Utility (IOU) auction revenue proceeds from the state’s cap-and-trade program toward public school energy efficiency projects.
Increases Utility Rates
AB 1186 will increase utility rates. While increasing energy efficiency in schools is a laudable goal, it would be unfair to impose a duplicative burden on ratepayers for programs they already fund. California ratepayers pay among the highest energy costs in the nation, and the cap-and-trade program will result in even higher energy prices for consumers and businesses. This cost increase will be on top of the price increase ratepayers will incur as a result of the implementation of various other greenhouse gas related measures such as the Renewable Portfolio Standard (RPS), Low Carbon Fuel Standard (LCFS), and the California Solar Initiative (CSI). In an effort to mitigate ratepayer impact, it is imperative that all revenues from the utility auction be returned to ratepayers so as to offset the cap-and-trade program costs.
California IOU customers already pay $1.3 billion a year into energy efficiency programs. There are numerous other programs in place at the local, state, and federal level that specifically provide funding for retrofitting school buildings, making AB 1186 unnecessary and duplicative. For example, Sacramento voters approved $195 million Measure E in 1999 and $225 million
Measure I in 2002 to pay for retrofitting buildings, upgrading HVAC and other improvements in the Sacramento City Unified School District. Similar bond measures have provided funding for Murrieta Valley Unified School District (a $120 million Measure E approved in 2006). Additionally, the Office of Public School Construction under the State Allocation Board administers a $35 billion voter-approved program that provides funding for school building projects at the state level. A myriad of other private grants and federal programs fund energy-saving upgrades at schools. We believe that these existing programs provide a more appropriate funding source for California schools that seek to retrofit inefficient classrooms.
AB 1186 is Premature
The bill jumps ahead of the current CPUC proceeding on how revenues generated from the utility auction should be used. This public process has generated input from various entities including the IOU’s and consumer groups that have proposed methodologies for returning revenue to customers. The CPUC is expected to issue its decision on this issue later this summer. AB 1186 directs auction revenues in advance of this decision.
AB 1186 will be heard today in the Senate Energy, Utilities and Communications Committee. Please contact your senator to oppose AB 1186.
Staff Contact: Brenda M. Coleman