Senate Bill 1018 Throws Monkeywrench Into Greenhouse Gas Allowance Revenues

The California Public Utilities Commission has been holding a rulemaking since March 2011 to determine what to do with the revenues that utilities will receive as a result of the direct allocation of greenhouse gas allowances to electrical distribution utilities in the state as a result of the new cap and trade program.

As you might expect, various interest groups have very different ideas as to how to spend those new dollars.  The utilities and many of the consumer groups have been strenuously arguing that these revenues should flow directly back to ratepayers, while some of the environmental groups have been arguing for setasides from these dollars for various conservation, energy efficiency and renewables programs.  As an observer of the Commission proceeding, it seemed like the CPUC was leaning towards complete and direct reimbursement to ratepayers, but no formal ruling or decision making that determination had been made. But in swoops the legislature.  Under Senate Bill 1018,  "the commission shall require revenues, including any accrued interest, received by an electrical corporation as a result of the direct allocation of greenhouse gas allowances to electric utilities pursuant to subdivision (b) of Section 95890 of Title 17 of the California Code of Regulations to be credited directly to the residential, small business, and emissions-intensive trade-exposed retail customers of the electrical corporation."

So that seems to leave a number of "non-emissions intensive trade-exposed retail customers" out of luck.   Large businesses, agriculture, government, etc., are all cut out of the revenues.  In addition, Senate Bill 1018 also states:

The commission may allocate up to 15 percent of the revenues, including any accrued interest, received by an electrical corporation as a result of the direct allocation of greenhouse gas allowances to electrical distribution utilities pursuant to subdivision (b) of Section 95890 of Title 17 of the California Code of Regulations, for clean energy and energy efficiency projects established pursuant to statute that are administered by the electrical corporation and that are not otherwise funded by another funding source.

So rather than having all of the revenues flow back to ratepayers, there will be a 15% set-aside for "clean energy and energy efficiency projects" and the remainder of the revenues will only flow back to residential, small business (whatever that means), and emissions-intensive trade-exposed retail customers (whatever that means). Stay tuned.