FW: FY 2001-2 Energy related Budget Cuts

< -----Original Message-----
< From: Schultz, Don
< Sent: Monday, November 19, 2001 2:57 PM
< To: Boyd,Kelly; Brown,Jeff; Chinn,Randy; Clark,Woody; Ferrera, Anna;
< Johannesson,Magnus; Kelly,Brian; Lingbloom, Lawrence; Lipper,Kip; Lyons,
< Joseph; Phillips,Guy; Sherriff,Rona; Symonds,Toni; Vargas,Sandra;
< Zeps,Gabrielle
< Cc: Bondonno,Maria; Campbell,Rod; Hartmann,Audra; Julian, Bill
< Subject: FY 2001-2 Energy related Budget Cuts
<
<
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< [3] Governor Wants to Carve Low-Income Assistance,
< Renewables Help from Budget
< In his quest to shave $2 billion off the state's current budget, Governor
< Gray Davis proposes to cut $380 million in energy-related spending.
< The biggest hit would be on low-income assistance programs supported
< through the California Public Utilities Commission. The budget for
< gath-ering
< data for new integrated resources planning at the California Energy
< Commission would also disappear. At [18], the alternative-energy and
< transportation agency that never was never will be.
<
< [18] Governor Asks for $382 Million Back
< from Energy-Related Budgets (from [3])
< When the energy crisis hit, California's coffers
< were still fat from the economic boom in the late
< 1990s. Spending was authorized to speed new power
< plant construction, expedite efficiency measures and
< help the poor pay their increasing energy bills.
< But with energy prices dropping and state income on
< the skids because of recession, Governor Gray Davis
< recommended on November 14 elimination of
< $382.5 million for energy-related state agencies as well
< as conservation and efficiency programs instituted within
< other state agencies as part of a $2 billion overall cut.
< The largest cut, $83.8 million, would be made in
< the California Public Utilities Commission's Califor-nia
< Alternative Rates for Energy (CARE) budget-
< aimed at helping low-income consumers pay energy
< bills. The governor's budget statement said that the
< money "could be reverted due to a significant drop in
< energy costs." Another hit on the CPUC's budget
< would be $9.6 million for energy-efficiency audits of
< oil and gas facilities, such as refineries. Funding for
< both programs was approved during the Legislature's
< first extraordinary session last spring under SBx1-5 by
< Senator Byron Sher (D-Palo Alto).
< The Department of Community Services and
< Development, under the state Health and Human
< Services Agency, would return $53.7 million to the
< general fund from the $120 million appropriated under
< Sher's bill for the low-income home energy-assistance
< program. The program, intended to operate through
< January 2005, was to provide energy-bill assistance
< and weatherization services to households and small
< foster-care group homes.
< The California Energy Commission would take the
< next-largest cut at $34.6 million. Of $86.3 million
< appropriated by Sher's SBx1-5 for grants to the agri-culture
< industry to install energy-efficient hardware
< and other conservation mechanisms, $29.4 million has
< not been encumbered and would revert to the general
< fund. Sher's other bill, SBx1-28, had budgeted
< $3 million to help local governments with their part of
< speeding power plant review. None of that was spent.
< Another $1.9 million budgeted for data collection and
< $300,000 for hydrogen fuel cell refueling stations
< would disappear.
< Mark Hutchinson, CEC manager of financial serv-ices,
< said a significant loss would be $1.9 million in
< funding to collect much-needed data on customers'
< energy use that would be used in demand-forecast
< modeling. "It is critical information that we have not
< been able to get since deregulation," Hutchinson said,
< adding that pre-AB 1890, the investor-owned utilities
< supplied that information.
< The Technology Trade and Commerce Agency
< would lose $29.9 million for loan guarantees for re-newable
< energy. The governor's statement said that
< there was a technical error in dispersing the funds to
< banks. The governor had already made several line-item
< vetoes to the bill that appropriated that money,
<
< ABx1-29 by Christine Kehoe (D-San Diego). The
< original amount of loan guarantees was $40 million.
< The agency also would return $5.5 million to the
< general fund and cease future funding of the biomass
< grants program.
< The Alternative Energy and Advanced Transporta-tion
< Financing Authority, also proposed by Kehoe's
< bill, would be annulled. The proposed agency would not
< be established, and the $24.9 million remaining in its
< start-up budget would go back into the general fund.
< The Department of Water Resources stands to see
< $14 million cut from its initial budget for power plant
< construction bonuses. Of $20 million appropriated,
< only $6 million was spent, and no more power plants
< are eligible for the money.
< Also eliminated in the budget were funds allo-cated
< to support unanticipated higher natural gas costs
< for the University of California and California State
< University systems-$45 million-and higher utility
< expenses that were expected to burden state agencies
< but have not come to pass-$64.2 million.
< The governor announced he will submit a revised
< 2001-2002 budget incorporating the cuts to the Legis-lature
< during a special session he will call in January.
< This session will run concurrent with the 2002 session
<