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State report questions Calif. energy surtax

February 3, 2011 12:00:00 AM PST
Every time you pay your electric bill, you also pay an additional energy surcharge. But with the state in a financial crisis, a report claims a lot of those energy surcharge funds are being wasted.

The state's legislative analyst raised red flags about the energy surcharge, and now hearings are scheduled to determine if the funds were wasted.

Most of us don't even notice the extra surcharges on our electricity bill. They help fund, among other things, the Public Interest Energy Research Program (PIER) to pay for energy efficiency research.

Since 2001, California ratepayers have been kicking in roughly 2 percent of their electricity bill to fund PIER, one of the programs under "public purpose."

Seven-hundred million dollars later, the Legislative Analyst's office says about 10 percent of the money collected by the California Energy Commission was spent on questionable research.

"The Energy Commission, in our opinion, has failed to demonstrate that this state has received substantial benefit from that investment," said Tiffany Roberts, fiscal and policy analyst at the Legislative Analyst Office.

The report calls out grants for things like salmon habitat restoration, deforestation and climate change on bird distribution, questioning how they relate to energy.

The California Energy Commission declined to be interviewed, but will have to justify that spending at a Legislative hearing later this month, chaired by state Senator Alex Padilla (D-San Fernando Valley).

"The LAO raises some red flags," said Pacoima. "The Energy Commission is going to have to answer to the LAO and to the Legislature."

Surcharge supporters say the PIER program has done some good, like move California to CFL light bulbs and spur the development of more energy-efficient commercial fryers.

Meanwhile, the electricity surcharge expired in January, and the Legislature will decide whether to keep it going, a tough sell after the report.

"We have to show we've made wise use of the first $700 million," said Padilla.

Californians are skeptical about coughing more money after seeing the LAO report that found no ratepayer benefit.

"No, not if it's not doing anything. It's not accomplishing anything. I don't think it should be continued to be paid," said utility customer Teresa Solis.

"That's one reason we should shut it off because it's like throwing money down a rat hole," said utility customer Stan Skov.