Capitol: Energy Agencies Set for Budget Balance Rewards

By Published On: January 11, 2013

The state’s key energy agencies face the welcome prospect of higher budgets for 2013-14. In Gov. Jerry Brown’s spending proposal Jan. 10, the upcoming budget plan for the California Public Utilities Commission is $1.4 billion to support 1,053 positions, adding 15.5 positions. If approved by the Legislature, the budget would include $210,000 from various special funds to improve the agency’s budget administration. The California Energy Commission’s proposed upcoming budget is $487.7 million, and 662 positions. That’s up from $393.1 million supporting 595.6 positions in 2012-13. Energy agencies are largely provided with special funds separate from the general fund. Last year, unlike the majority of state agencies, the balance sheet was largely status quo for the CPUC, Energy Commission, and Air Board--the three state agencies driving energy policy. State officials announced this week that California’s immense budget woes were history--at least for the next few years. The state budget turnaround was attributed to voter approval of temporary tax increases under Proposition 30, enacted spending cuts, and a stronger economy. Also getting credit for helping move the state from a $20 billion funding gap to a “balanced” budget is the $500 million to be sent annually to schools and community colleges for energy efficiency installations for five years under the voter-approved Proposition 39. “This will help schools manage growing utility costs, recover from the economic downturn and ensure the benefits of energy efficiency occur across communities across the state,” Department of Finance director Ana Matosantos said. The money also reduces the state’s general fund burden. The 2013-14 budget blueprint appears not to be impacted by downward revisions in expected revenue generated by the State Air Resources Board cap-and-trade auctions. The administration’s projected infusion to the general fund dropped to $200 million from a projected $600 million last year. Last November, the Legislative Analyst Office estimated the state would reap $100 million from the auctions. The first auction, in mid-November 2012, generated only $56 million. Subsequent ones are scheduled for mid-February and mid-May. “How much money comes in is a very tiny amount,” Brown said of the auction revenue projections. “The important thing is that we are dealing with climate change.” The administration is developing a plan for how to spend incoming revenue from the state’s carbon market, with a focus on cutting greenhouse gases, said Matosantos. That’s expected to include funding for the electrification of heavy-duty and light-duty vehicles and the state’s high speed rail project to reduce emissions from the transportation sector. Transportation is the largest source of carbon pollution in the state, with the electricity sector in second place. Matasantos said the administration’s plan will be out in May. The CPUC took heat following a Department of Finance audit that found budget office staff shortfalls, inadequate budgeting practices and procedures, and weaknesses in forecasting methodologies. Three new positions in the budget office are included in the proposed spending plan. “The Department of Finance will be working closely with the [C]PUC to address the observations in the audit and ensure the [C]PUC’s financial records are accurate and reliable,” states the budget summary. The commission’s Electricity Program Investment Charge fund would be increased by $192.2 million and 58.5 positions. Last year, EPIC, which aims to support cost-effective efficiency and conservation, renewable energy, public interest research and development, was also bumped up. The governor’s budget must meld with the legislative budget plan to be released later this year.

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