In 1996, Governor Pete Wilson signed into law Assembly Bill 1890 which provided authority for a fundamental restructuring of California's electric services industry. Among other things, AB 1890 requires that at least $62.5 million be collected annually from investor-owned utility ratepayers for "public interest" energy RD&D efforts not adequately provided by competitive and regulated markets. Of the $62.5 million collected, $61.8 million will be transferred to the Energy Commission to administer specific RD&D projects.
Strategic Plan
As an initial step in carrying out its responsibilities, the Commission held a series of public workshops throughout the state to receive comments from a wide variety of stakeholders on the development of the PIER program. Using the results of this collaborative effort, the Commission adopted its "Strategic Plan For Implementing the Provisions of AB 1890" (publication # P500-97-007, PDF file, 44 pages, 102 kb). This Strategic Plan identified the overall mission of the PIER Program as:
"The mission of the Public Interest Energy Research Program is to conduct public interest energy research that seeks to improve the quality of life for California citizens by providing environmentally sound, safe, reliable and affordable energy services and products. Public Interest Energy Research includes the full range of research, development, and demonstration activities that will advance science or technology not adequately provided by competitive and regulated markets."
In 1997, Senate Bill 90 was enacted into law, establishing certain administration and expenditure criteria for the PIER program. The legislation required that the program portfolio include the five subject areas:
- Renewable energy technologies
- Environmentally preferred advanced generation
- Energy-related environmental enhancements
- End-use energy efficiency
- Strategic energy research
What are we looking for in PIER Projects?
It is essential that PIER projects benefit California's electric consumers. PIER projects should:
- Reduce the cost of electricity and increase the value
- Increase the reliability of the electric system
- Reduce the environmental impacts of electricity generation, distribution and use
- Enhance California's economy
- Demonstrate a connection to the market
- Advance science and technology not provided by competitive and regulated markets
Proposers need not be California companies but need to propose research whose results exceed best practice or product improvement. There is no minimum or maximum requirement for the amount of funding requested, but some level of match funding is requested.
Stage One Implementation
The Commission released three solicitations in 1997 and 1998: Transition, First General and Second General, committing a total of nearly $51 million to 82 different projects in the five subject areas. The Transition funding provided for the completion of ongoing utility projects. Of note in the First and Second General Solicitations, 26 of the 44 projects were awarded to small businesses.
Stage Two Implementation
The Commission, drawing on input from its Policy Advisory Council, established six teams to develop six programs areas, shifting the focus from projects to programs. The six program areas are the five subject areas listed above, with end-use efficiency divided into two programs: industrial/agricultural/water and buildings, both residential and commercial. The teams have the flexibility of using any combination of several procurement strategies: conventional competitive contracts, negotiated competitive contracts, sole source contracts, interagency agreements, and membership agreements.
Small Grants Program
Within the Strategic program area is the Small Grants Innovation Program whose purpose is to determine the feasibility of energy technology and science innovations for new energy concepts whose feasibility are not yet established. The program is aimed at small businesses, academic institutions, small non-profit organizations and individuals. Approximately $2 to $2.5 million per year of PIER funds will be available for two years to provide up to $95,000 for hardware projects and $50,000 for modeling projects per grant. The program will be administered by the California State University Institute, in collaboration with the University of California, San Diego State University and Commission staff who will assist in implementation and project selection.
External Evaluation and Review
To provide advice, expertise, evaluation and accountability, the Commission has formed two groups: the Policy Advisory Council and the Independent Review Panel. The Policy Advisory Council is comprised of 14 members representing other government agencies, universities, industry organizations and the broad public interest. At publicly-noticed meetings, the Council has provided advice on:
- Achieving goals and objectives in the PIER Program Strategic Plan.
- Connecting the PIER program to existing or anticipated market needs.
- Providing an appropriate balance between risks and public benefits.
- Criteria for overall performance evaluation of the PIER program.
- Specific program revisions, redirection of targets or other process changes that will improve the overall quality of the program.
The restructuring legislation requires the Commission to select a panel of experts to conduct a regular independent, comprehensive evaluation of the PIER program. The evaluations include a review of the public value of the PIER programs and the benefits of providing finds for technology development that would otherwise not be funded. Information on the panel's reviews can be found on the California Council for Science and Technology's website.