As part of a sweeping state initiative by California Gov. Arnold Schwarzenegger, the state’s disparate energy agencies, including parts of the regulatory commission, are recommended for consolidation under a massive new “infrastructure” agency.

The California Performance Review (CPR), which is headed by a 21-member bipartisan commission that will operate in the months and years ahead to implement hundreds of recommendations for revamping the state’s vast bureaucracy, issued a 2,500-page report Tuesday that addresses the energy units as one small part of a much broader chapter on infrastructure (housing, transportation, water, energy, infrastructure finance, research, planning and assets management).

CPR has established its own website with the full text of the massive “diagnosis” of what ails the state government from an organizational standpoint, broken down into bite size sections. Its overall stated goals are to reorganize and streamline.

While the report acknowledges California is a state unique for its “size, resources, spirit and exuberant embrace of the future,” it finds it languishing “a step behind — and the current fiscal crisis is only the most obvious and pressing example of the problems in our state government.”

CPR recommends that the Electricity Oversight Board (EOB), California Energy Commission (CEC), California Consumer Power and Conservation Financing Authority (CPA), Department of Water Resources (DWR), Department of Conservation, and State Lands Commission, along with the current electric transmission siting authority held by the California Public Utilities Commission, be consolidated through state legislative action under the newly created infrastructure unit.

It also recommends that two consumer representative units in the CPUC – the Office of Ratepayer Advocates and the Public Advisors Office – be consolidated, and that in another vein, the state’s conservation and energy efficiency efforts be better coordinated to permit state government to operate in a far more energy efficient manner. Finally, in the realm of energy siting it recommends that proponents of projects pay the state’s full costs of processing permit applications.

Energy plant siting, such as new power plants or liquefied natural gas (LNG) terminals, is “fractured and inefficient due to overlapping permitting authorities,” the CPR said in its section dealing with energy.

Thus, it makes two recommendations that it determined have no impact on the state’s general fund revenues:

In terms of energy planning/policy, conservations, efficiency and peak-demand reduction programs, which CPR concluded have failed to “achieve their full potential” because of the absence of a clear and unified state policy, the report recommends seven steps by the governor, legislature and existing agencies, such as the CEC or its successor.

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