Brown’s Budget Ax Misses Energy Agencies

By Published On: January 14, 2011

Governor Jerry Brown proposed $12.5 billion in state spending reductions in his fiscal 2011-12 budget. However the largely fee-funded agencies that regulate and manage the state’s natural gas and power industry generally would remain at status quo spending and staffing levels at this point in time. After lawmakers act on big cuts to welfare programs, higher education, and state employee compensation, Brown indicated he would take a deeper look at state agency operations with an eye toward more savings. “I think there’s some waste around here,” he said Jan. 10, indicating he may seek to streamline state agencies as the budget process progresses. Expectations are that the “May revise” to the state budget is expected to focus more on the energy-related agency budgets. Whether that includes the perennial effort to consolidate the state energy agencies remains to be seen. If a 33 percent renewable standard bill looks like it will pass, Brown also could well bulk up energy agency staff working on alternative energy development, particularly at the CPUC. The day after the budget blueprint was released Brown announced he was slashing in half government-funded cell phones for state employees. The numbers of phones at issue and estimated savings from the reduction in state-funded cell phones at the CPUC, Energy Commission, California Air Resources Board, and Department of Water Resources was not revealed. A total $20 million in savings from all agencies is estimated by June. Meanwhile, Brown’s budget proposal envisions the following for energy agencies, which largely are not dependent on the deficit-ridden state General Fund: -The California Public Utilities Commission would see its expenditures climb from about $1.3 billion this year to $1.4 billion next year on rising fee revenues. The commission would see an additional $498,000 to hire four new engineers to oversee natural gas distribution system safety after the Pacific Gas & Electric gas pipeline explosion in San Bruno last year. Overall staffing would grow from 976 to 988 employees. The numbers incorporate budget reductions from the mandatory one day a month furloughs approved last year by the Legislature. That, on top of increased employee contribution to their pensions, equals about an 8 percent reduction in take home pay for staff. The CPUC was exempt from Governor Arnold Schwarzenegger’s directive last year ordering three furlough days a month for state employees because the agency is constitutionally independent. -The California Energy Commission’s budget would decline from $582 million this year to $386 million next year, with authorized staffing slightly shrinking from 627 to 609 positions. However, the reduced spending plans largely reflect the end of federal economic stimulus funding the agency has received over the last two years and spent mainly to fund energy conservation and efficiency retrofits. The reduction also reflects the end of year sunset of the Public Interest Energy Research program. The Legislature could renew the program, which would boost CEC funding. Since the federal money marked exceptional one-time revenue, the governor’s proposed budget largely marks what CEC spokesperson Susanne Garfield called “the standard baseline” for the agency’s mostly specially-funded programs. -The California Air Resources Board--which administers the state’s global warming law, AB 32--would keep staffing at 1,225 employees. Agency spending would increase from $589 million to $653 million largely on rising fees the Air Board collects from industries it regulates. -The Department of Water Resources would see spending fall from $6.5 billion this year to $3.6 billion, with a slight increase in staffing from 3,123 to 3,231 personnel. Part of the spending decline reflects the shrinkage of energy purchase contracts it manages, which the state entered during the 2000-01 energy crisis. Spending for electricity supplied to the state’s utilities under those contracts is projected to decline from $3.4 billion this year to $2.1 billion next fiscal year.

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