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The governor's $143.4 billion budget blueprint for 2007-08 released January 10 includes $36 million to fund the state's global warming reduction act. Governor Arnold Schwarzenegger also proposes spending $6 million on his hydrogen highway plan and another $5 million on biofuels. The plan also would authorize $7.7 billion of bond money for new transportation infrastructure to accommodate population growth. State transportation officials hope that increase will not spur sprawl, which pushes up energy demand and air pollution. The California Air Resources Board would receive $24.4 million of the $36 million pot for 100 new staff positions dedicated to developing AB 32 rules. The air board's funding would come from unspecified special funds and from the Air Pollution Control Fund. The California Public Utilities Commission budget would be augmented by nearly $1.3 million for its climate change proceedings, including evaluating carbon caps in the electric and natural gas sectors. The California Energy Commission would receive $1.1 million for its role in implementing the greenhouse gas reduction law. Under the initial budget for the upcoming fiscal year, funding for the CPUC would also include $2.5 million to carry out the Million Solar Roofs Initiative, which aims to create 3,000 MW of new solar power. The Energy Commission would get $994,000 from the renewable energy public-interest funds for five positions to support its work on the solar initiative. In addition, the spending plan allocates $536,000 from the general energy surcharge to support four Energy Commission positions to implement SB 1059, enacted last year. That law gives the Energy Commission authority to designate transmission corridors in consultation with local government. The Air Resources Board budget would also include $6 million to support eight positions to advance the governor's hydrogen highway plan. The money would be taken from the Motor Vehicle Account. The governor's hydrogen highway plan called for 100 stations and 2,000 vehicles by 2010. The program received $6.5 million the last fiscal year to buy 3 fueling stations and 14 vehicles. The source of the hydrogen - fossil fuels or renewable resources - is a controversial issue. California and the U.S. currently create most hydrogen fuel from natural gas (Circuit, Sept. 2, 2005). Biomass power projects would receive $5.1 million. The money would come from Proposition 84 funds. The initiative was created to promote renewable energy and reduce dependence on fossil fuels. The $5 million would flow through the state Department of Forestry. The $25 million received from the 2000-01 crisis settlement with Williams Energy and the California attorney general would be dedicated to grants for solar and other energy projects in grammar and high schools. Proposition 1B, which passed in November 2006, provides $20 million for transportation projects and nontraditional fuels. In this budget, there's $7.7 billion in transportation funding that will come from that initiative. It is to fund projects that ease congestion and air pollution and speed the movement of imported goods through the state's major port cities. The infrastructure enlargement is needed, state officials stressed, because imports are expected to triple and the state's population is projected to grow by 23 percent over the next 20 years. The California Department of Transportation will continue to provide planning grants to local governments as the new freeway projects are built to support smart growth, said Will Kempton, agency director. However, the state ultimately has no authority over land use and sprawl, particularly in hot inland areas where new development is driving increased demand for energy, according to the California Energy Commission. Also derived from 1B would be $96.5 million in the air board's 2007-08 budget to lower emissions from school buses. - Elizabeth McCarthy

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