As the budget plays out in Sacramento, on the surface it appears that state energy agencies are not impacted. Behind the scenes, though, a struggle has broken out over whether the California Energy Commission should continue to get funds for renewable energy and research and development programs that currently employ about 12 percent of its staff and account for a third of its budget. In a departure from the norm, the debate is not taking place in the halls of the state capitol. Instead, it\u2019s before the California Public Utilities Commission in San Francisco. At least one of the state\u2019s major investor-owned utilities says the CPUC\u2019s attempt to funnel utility ratepayer money to the Energy Commission amounts to little more than an attempt to circumvent the state constitution and hide a tax by any other name from public view. \u201cThere are no statutory provisions that expressly authorize the [California Public Utilities] Commission to collect money from [utility] customers to fund a state-run research, development and demonstration program,\u201d wrote Southern California Edison attorney Rebecca Meiers-De Pastino in a May 14 filing with the CPUC. Only state voters or the Legislature have the power to impose such a levy, she maintained. At issue is a CPUC plan to replace Energy Commission-administered programs long funded by the public goods charge, a fee enacted by the Legislature on utility customers to finance energy research and development and renewable energy subsidy programs. The Legislature last year let the charge expire after the programs were criticized as ineffectual and outdated. Then the CPUC--at Gov. Jerry Brown\u2019s urgent request--voted to replace the public goods charge with a rate hike on electric utility customers known as the Electric Program Investment Charge, or EPIC. Now, the CPUC has developed a plan for how to spend the money. Under it, the Energy Commission would get 80 percent of the money raised--equal to about $130 million\/year--to fund applied research and development. It could spend about $13 million to pay for staff to administer research grants and contracts. The utilities would get the other 20 percent of the money to fund research and development, or about $30 million annually. At the Energy Commission, the EPIC program would replace the Public Interest Energy Research program and a renewable energy subsidy program, which had about $130 million in funding this budget year and 72 staff positions. The governor\u2019s overall proposed budget for the Energy Commission in the upcoming fiscal year starting July 1 is $393 million, with total staffing of 595. EPIC would continue to fund research and development and pay for Energy Commission staff members who have administered the Public Interest Energy Research and renewable energy subsidy programs. However, it would place the Energy Commission under the CPUC\u2019s control by requiring it to develop and submit for CPUC approval a three-year plan for spending the EPIC money, according to Energy Commission spokesperson Kelly Kell. Meanwhile, she said, the Energy Commission will wind down the Public Interest Energy Research program, which still has \u201cseveral hundred active agreements,\u201d plus more than $20 million the agency plans to award for new projects through the remainder of this calendar year. Kell said that as the Energy Commission wraps up the existing research program it plans to reduce the staff who has managed electricity-oriented projects. However, if Edison and the other electric utilities get their way, most of those positions--if not all--would be cut and potentially all of the $130 million would be administered by Edison, Pacific Gas & Electric, and San Diego Gas & Electric for research and development, under EPIC. Edison maintains that all of the EPIC money--since it\u2019s being collected through utility rates--either should go to the utilities or that the CPUC should drop EPIC altogether and refund the money that\u2019s been collected from ratepayers since the public goods charge expired last year. While the other utilities don\u2019t go as far, they too want more, if not all of the money to run through their hands rather than through the Energy Commission\u2019s. \u201cThe manner in which the California Energy Commission has historically administered programs similar to EPIC has produced results that are not in line with EPIC\u2019s goal of providing direct benefits to electric investor-owned utility ratepayers,\u201d stated SDG&E attorney Emma Salustro in a May 14 filing with the CPUC. She claimed that while SDG&E customers paid $51 million into the Energy Commission\u2019s Public Interest Energy Research program in 2011, less than 10 percent of that came back to SDG&E\u2019s territory to fund research and development projects there. She argued that utilities can best spend EPIC money to benefit their own ratepayers. PG&E attorney Christopher Warner suggested that if the Energy Commission wants to conduct research and development it \u201cshould be funded through utility contracts . . . in order to ensure the CPUC retains oversight authority over the expenditures and to prevent diversion of utility customer funds to the state\u2019s general fund budget.\u201d Warner suggested the utilities can do a better job of leveraging private sector energy research and development money and skills than the Energy Commission.