California’s energy agency managers, staff, consultants, and the residents and businesses they serve can stop holding their collective breath. State energy and air quality agencies again avoided the state’s annual budget knife. While many other agencies and programs that provide other services confront more hacks to their budget, energy agencies appear to be the golden children of this administration. Not only have energy-related government entities not faced steep cuts, there is no longer any movement to merge the agencies. The balance sheet is largely status quo for the California Public Utilities Commission, California Energy Commission, and California Air Resources Board-- the three state agencies driving energy policy. In contrast, the proposed budget would slash social welfare and health care programs and deeply cut education and the courts if voters do not approve taxes this coming November. Gov. Jerry Brown’s spending blueprint released Jan. 5 includes what he called “some bold moves” to invest in greenhouse gas reductions and alternative energy, in spite of massive proposed cuts elsewhere. The proposed 2012-13 budget highlights that the California Air Board could see as much as $1 billion in revenue from auctioning emission rights under its carbon cap-and-trade program. It notes that half of that could go to the state’s general fund. The Legislative Analyst’s Office pointed out in its Jan. 11 budget overview that the annual carbon trading revenue could reach $3 billion. Although not part of the state budget, the proposed budget line item gives the Air Board authority to spend the money--although how much revenue it would receive is unknown at this time. The $1 billion figure is a placeholder. “It gives us the flexibility to spend the funds,” said Deborah Hoffman, California Environmental Protection Agency spokesperson. The Air Board, Department of Finance, and Governor’s Office are set to work together to develop funding specifics, she added, noting that only programs that meet the aims of the state’s climate protection law, AB 32, could qualify. This budget is more opaque than previous ones. For instance, it’s not going to be followed by conference calls for the media by agency and Department of Finance officials to discuss the plan’s details and address questions, said J.D. Palmer, Finance Department spokesperson. Also breaking from recent tradition is Brown’s lack of interest in energy agency reorganization (Current, Jan. 6, 2012). What’s similar from past years, though, is the state’s largely specially-funded energy agencies are pretty much immune from the state’s deficit problem. Gubernatorial support and streams of income from fees and sources not subject to the vagaries of the state general fund make that possible. Brown--who supported alternative energy in his first tenure as governor from 1974 to 1982--staked his 2010 campaign on greening and modernizing California’s energy system. Under this budget, the California Public Utilities Commission would see an increase from $1.42 billion during the current fiscal year to $1.44 billion. The agency could hire 39 new staff members largely focused on regulating utilities. Last fiscal year the CPUC had a budget of $1.11 billion. Much of the increase for the upcoming fiscal year would be dedicated to better safety regulation of natural gas pipelines, transportation, and other operations in response to laws enacted after the disastrous Pacific Gas & Electric natural gas pipeline explosion in San Bruno in 2010. At the California Energy Commission, funding would fall to $393 million in fiscal 2012-13 from $554 million this year. Staffing would decrease from 626 to 596. However, the cuts in funding and personnel would bring resources for the Energy Commission more in line with fiscal 2010-11, when the agency had a total budget of $403 million and a staff of 561. Reflected in the lower 2012-13 budget is an approximate $9.6 million drop in federal stimulus funds, which the Energy Commission carried over from 2009. The reduced funding is also attributed to the expiration of the public goods charge, which has funded the Energy Commission’s Public Interest Energy Research Program and renewable energy subsidies. The Energy Commission’s proposed research and development spending plan is $21.5 million, with $88.9 million for the Renewable Resources Trust Fund. “All other program areas in the Energy Commission budget are fully funded as requested,” said Adam Gottlieb, agency spokesperson. The public goods program is being continued by rate hikes the CPUC ordered late last year. How much money or when the Energy Commission is to receive funds to continue its programs is unknown. The Air Resources Board--in charge of carrying out the state’s climate protection law--would see its budget increase to $555 million from $466 million this fiscal year. In fiscal 2010-11 its budget was $324 million. Staffing would remain level at 1,223. Much of the new money would go toward helping local air districts through grants. While things could change as the budget season progresses, at first blush it appears that the state’s energy policy establishment can take a long deep breath.
