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Governor Arnold Schwarzenegger State Capitol Sacramento, CA 95814 Dear Governor Schwarzenegger: I respectfully request your VETO of SB 1762 (Perata), which would increase costs to California ratepayers for the creation of a Climate Change Institute that is both premature and disrupts the ongoing process at the California Air Resources Board (CARB). AB 32 grants broad authority to CARB to determine an appropriate implementation plan for AB 32, including research and technology development strategies. SB 1762 prejudges the outcome of this process and instead defines what ratepayer funds should be used for and how they should be allocated. This major proposal, which calls for millions of dollars in ratepayer funds, was considered in the last few days of the legislative session and lacks the process and stakeholder participation that should be required for such an investment on the backs of California’s taxpayers. Before we create a climate change institute, CARB should host a comprehensive discussion about the need for an institute, how it should be funded, how the monies should be spent, who should administer the funds and who should oversee institute activities. However, CARB has not yet completed the scoping plan or this level of analysis. Furthermore, this bill places into statute that the included mitigation strategies pass the “Sinclair” test without a comprehensive analysis of how or if the strategies included will directly lead to greenhouse gas emission reductions or benefit ratepayers. We believe ratepayer funds dedicated to climate change should be directed at technologies and strategies to meet the AB 32 emission reduction goal. SB 1762 goes beyond the CARB plan by using electric and natural gas ratepayer funds to support climate change mitigation technologies and strategies. Mitigation of climate change effects, arguably water shortages and rising sea levels, would divert ratepayer funds for a purpose unrelated to emission reductions. Imposing this additional burden on ratepayers already paying the highest rates in the nation will hurt all California businesses and consumers.

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