Legislative Analyst's Office Analysis of the 2001-02 Budget Bill

Energy Initiatives (3365)

General Fund Monies Set Aside For Energy-Related Programs

We withhold recommendation on the $1 billion General Fund request for energy-related projects pending receipt and review of proposals for allocating these funds.

The Governor's budget includes a $1 billion General Fund set-aside for energy initiatives to address the state's energy crisis. Proposed budget bill language specifies that (1) the funds are for "projects awarded by the Governor's Clean Energy Green Team" and (2) allocation of the amount appropriated will be subject to legislation.

Chapter 329, Statutes of 2000 (AB 970, Ducheny), created the Green Team to (1) provide pertinent information (pollution control technology and air emissions offsets, for example) and assistance (such as acquiring local permits) on request to companies wanting to build power plants. Chapter 329 also requires the Green Team to develop recommendations for low- or zero-interest financing for renewable energy. The Green Team consists of the following government entities:

• State Departments. Heads of the Electricity Oversight Board, Public Utilities Commission, Energy Commission, and Governor's Office of Planning and Research.
• State Agencies. Secretaries of Environmental Protection;
• Resources; and Technology, Trade, and Commerce.
• Local/Regional. Representatives from air quality management districts.
• Federal. Representatives from the Environmental Protection Agency, and Fish and Wildlife Services.

Prior to appropriating funds for energy initiatives, the Legislature should have information on the types of projects that would be funded, how the projects would be selected, and the criteria projects must meet to qualify for funding. This information, at a minimum, is needed for the Legislature to evaluate the appropriate level of funding and the benefit of undertaking proposed initiatives. At this time, however, there are no supporting documents for this $1 billion proposal. Pending receipt and review of this information, we withhold recommendation on the request.