BILL NUMBER: AB 2678	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MAY 23, 2008

INTRODUCED BY   Assembly Member Nunez
   (Coauthor: Assembly Member Laird)

                        FEBRUARY 22, 2008

   An act to add Section 25943 to the Public Resources Code, 
and to add Sections 381.2 and 385.2 to the Public Utilities Code,
  relating to energy.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2678, as amended, Nunez. Energy: energy audit. 
   Existing 
    (1)     Existing  law requires the
State Energy Resources Conservation and Development Commission 
(Energy Commission)  , in its biennial energy conservation
report, to report on the progress made to implement a statewide home
energy rating program.
   This bill would require the  commission, on or before July
1, 2010   Energy Commission by March 1, 2009  , to
establish  an ongoing proceeding   a regulatory
proceeding  to develop  requirements for time of sale
energy efficiency audits for residential and commercial buildings
  a comprehensive program to achieve greater energy
savings in the state's existing residential and commercial building
stock  . In developing the requirements, the  commission
  Energy Commission  would be required  to
coordinate with specified entities and  to consider certain
specified factors. Before adopting the requirements, the commission
would be required to consult with specified entities and to hold at
least 3 public hearings.  The Energy Commission would be required
to periodically update the comprehensive program to improve or
refine the program requirements. The Energy Commission would be
required to report on the status of the program in the integrated
energy policy report.  
   (2) Existing law requires the Public Utilities Commission (PUC) to
order certain electrical corporations to collect and spend certain
funds for public benefit programs, including cost-effective energy
efficiency and conservation programs.  
   The bill would require the PUC, by January 31, 2009, to open a
proceeding to investigate the ability of investor-owned utilities to
provide energy efficiency financing options to their customers to
implement the comprehensive program developed by the Energy
Commission pursuant to this act. The PUC, by January 1, 2010, after
consultation with the Energy Commission, would be required to
authorize an electrical corporation to provide a targeted number of
low- or no-cost energy efficiency audits each calendar year. The
electrical corporation would be required to recommend to a building
owner cost-effective energy efficiency improvements after the
completion of the energy audit. The PUC would be required to report
annually to the Legislature and the Energy Commission on specified
information.  
   This bill would require a local publicly owned utility, at a
specified date, to be responsible for implementing an energy
efficiency program that recognizes the Legislature's intent to
encourage energy savings and greenhouse gas emission reductions in
existing residential and commercial buildings. A local publicly owned
utility would be required annually to report to its customers and
the Energy Commission on the implementation of the program. Because a
local publicly owned utility would be responsible for the
implementation of an energy efficiency program and to provide an
annual report to its customers and the Energy Commission on the
implementation of the program, this bill would increase the level of
service provided by a local agency, thereby imposing a state-mandated
local program.  
   (3) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.  
   This bill would provide that no reimbursement is required by this
act for a specified reason. 
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program:  no   yes  .


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    The Legislature recognizes the
significant energy savings and greenhouse gas emission reductions
inherent in the state's existing residential and commercial building
stock and the need to establish a comprehensive energy efficiency
program to capture these reductions. This program should include
components necessary to ensure meaningful and reliable energy audits,
cost-effective energy efficiency improvements, public and private
sector energy efficiency financing options, public outreach and
education, and expanded utility energy efficiency programs. 
   SEC. 2.    Section 25943 is added to the  
Public Resources Code   , to read:  
   25943.  (a) (1) By March 1, 2009, the commission shall establish a
regulatory proceeding to develop and implement a comprehensive
program to achieve greater energy savings in California's existing
residential and commercial building stock. This program shall
comprise a complementary portfolio of techniques, applications, and
practices that will achieve greater energy efficiency in the state's
existing residential and commercial structures built before the
implementation of Title 24 of the California Code of Regulations.
   (2) The comprehensive program may include, but need not be limited
to, time of sale energy audits, time of service change energy
audits, and targeted numbers of annual energy audits; building
benchmarking or energy rating, or both; cost-effective energy
efficiency improvements; public and private sector energy efficiency
financing options; public outreach and education efforts, and
expanded utility energy efficiency programs.
   (b) To develop and implement the program specified in subdivision
(a), the commission shall do both of the following:
   (1) Coordinate with the Public Utilities Commission and consult
with representatives from the Department of Real Estate, the
Department of Housing and Community Development, investor-owned and
publicly owned utilities, local governments, real estate licensees,
commercial and home builders, commercial property owners, small
businesses, mortgage lenders, financial institutions, home
appraisers, inspectors, energy rating organizations, consumer groups,
environmental and environmental justice groups, and other entities
the commission deems appropriate.
   (2) Hold at least three public hearings in geographically diverse
locations throughout the state.
   (c) In developing the requirements for the program specified in
subdivision (a), the commission shall consider all of the following:
   (1) The amount of annual and peak energy savings as well as
greenhouse gas emission reductions and projected customer utility
bill savings that will accrue from the program.
   (2) The most cost-effective means and reasonable timeframes to
increase the number of annual energy audits conducted on existing
residential and commercial buildings, pursuant to subdivision (a), to
meet the statewide reduction targets and goals in subdivision (b) of
Section 381.2.
   (3) The various climatic zones within the state.
   (4) An appropriate method to inform and educate the public about
the need for, benefits of, and environmental impacts of the
comprehensive energy efficiency program.
   (5) The most effective way to report the audit results and the
corresponding energy efficiency improvements to the building's owner,
including, among other things, all of the following:
   (A) Prioritizing the identified energy efficiency improvements.
   (B) The payback period of each improvement identified.
   (C) The various incentives, loans, grants, and rebates offered to
finance the improvements.
   (D) Other available financing options including all of the
following:
   (i) Mortgages or sales agreement components.
   (ii) On-bill financing.
   (iii) Contractual property tax assessments.
   (iv) Home warranties.
   (6) Existing statutory and regulatory requirements to achieve
energy efficiency savings and greenhouse gas emissions reductions.
   (7) Any other considerations deemed appropriate by the commission.

   (d) The program developed pursuant to this section shall do all of
the following:
   (1) Minimize the overall costs of establishing the comprehensive
energy efficiency program requirements.
   (2) Ensure, for residential buildings, that the energy efficiency
improvements do not unreasonably or unnecessarily affect the home
purchasing process or the ability of individuals to rent housing.
   (3) Ensure, for nonresidential buildings, that the energy
improvements do not have an undue economic impact on California
businesses.
   (4) Determine, for residential buildings, the appropriateness of
the Home Energy Rating System (HERS) program to accomplish the goals
of this section and whether there are a sufficient number of HERS
certified raters available to meet the program requirements.
   (5) Determine, for nonresidential structures, the availability of
an appropriate cost-effective energy efficiency auditing system and
whether there are a sufficient number of certified raters or auditors
available to meet the program requirements.
   (6) Coordinate with the California Workforce Investment Board, the
Employment Training Panel, the California Community Colleges, and
other entities to ensure a qualified, well-trained workforce is
available to implement the program requirements.
   (e) A home energy rating or audit service does not meet the
requirements of this section unless the service has been certified by
the commission to be in compliance with the program criteria
developed pursuant to this section and is in conformity with other
applicable elements of the program.
   (f) The commission shall periodically update the criteria and
adopt any revision that, in its judgment, is necessary to improve or
refine program requirements after receiving public input.
   (g) Before implementing an element of the program developed
pursuant to subdivision (a) that requires the expansion of statutory
authority of the commission or the Public Utilities Commission, the
commission and the Public Utilities Commission shall obtain
legislative approval for the expansion of their authorities.
   (h) The commission shall report on the status of the program in
the integrated energy policy report pursuant to Section 25302. 
   SEC. 3.    Section 381.2 is added to the  
Public Utilities Code   , to read:  
   381.2.  (a) By January 31, 2009, the commission shall open a
proceeding to investigate the ability of investor-owned utilities to
provide various energy efficiency financing options to its customers
for the purposes of implementing the program developed pursuant to
Section 25943 of the Public Resources Code.
   (b) By January 1, 2010, after consultation with the State Energy
Resources Conservation and Development Commission, the commission
shall authorize each electrical corporation to provide a targeted
number of low- or no-cost energy efficiency audits to be completed in
an expedited and cost-effective manner each calendar year. Upon the
completion of the energy audit, the electrical corporation shall
recommend to the building owner cost-effective energy efficiency
improvements based on the criteria established by the State Energy
Resources Conservation and Development Commission pursuant to Section
25943 of the Public Resources Code.
   (c) The commission shall identify and attribute the energy
efficiency savings within each investor-owned utility service
territory to the investor-owned utility serving that territory.
   (d) The commission shall provide an annual report to the
Legislature and the State Energy Resources Conservation and
Development Commission that details the number of buildings audited,
the amount of actual energy savings resulting from the energy
efficiency improvements, the types of financing options used to
implement the improvements, and the backlog of unfulfilled energy
efficiency audit requests. 
   SEC. 4.    Section 385.2 is added to the  
Public Utilities Code   , to read:  
   385.2.  (a) Upon implementation of subdivision (b) of Section
381.2, and the completion and promulgation of regulations pursuant to
subdivision (a) of Section 25943 of the Public Resources Code, each
governing body of a local publicly owned electric utility, as defined
in Section 9604, shall be responsible for implementing an energy
efficiency program that recognizes the intent of the Legislature to
encourage energy savings and greenhouse gas emission reductions in
existing residential and commercial buildings, while taking into
consideration the effect of the program on rates, reliability, and
financial resources.
   (b) A local publicly owned electric utility shall report annually
to its customers and the State Energy Resources Conservation and
Development Commission, all of the following:
   (1) The utility's status in implementing an energy efficiency
program pursuant to subdivision (a) and the utility's progress toward
attaining the goal of the program.
   (2) The amount of money that was designated for energy efficiency
audits on an annual basis and the amount remaining in the fund.
   (3) The number of buildings that were audited.
   (4) The backlog, if any, of requests for an energy efficiency
audit.
   (5) The types of energy efficiency financing options offered by
the utility and the number of customers who have taken advantage of
these financing options.
   (6) The net energy savings from energy efficiency improvements
installed after an audit pursuant to this section. 
   SEC. 5.    No reimbursement is required by this act
pursuant to Section 6 of Article XIII B of the California
Constitution because a local agency or school district has the
authority to levy service charges, fees, or assessments sufficient to
pay for the program or level of service mandated by this act, within
the meaning of Section 17556 of the Government Code.  
  SECTION 1.    Section 25943 is added to the Public
Resources Code, to read:
   25943.  (a) On or before July 1, 2010, the commission shall
establish an ongoing proceeding to develop requirements for time of
sale energy efficiency audits for residential and commercial
buildings.
   (b) In determining the requirements for time of sale energy
efficiency audits, the commission shall consider all of the
following:
   (1) The availability of appropriate energy auditing systems.
   (2) The appropriate mechanisms for determining levels of mandatory
energy efficiency investments including all of the following:
   (A) A minimum and maximum dollar level.
   (B) An appropriate percentage value of the building's price at the
time of sale.
   (C) All measures identified by an energy audit with payback period
as specified by the commission.
   (3) The costs of establishing these requirements.
   (4) The ability to finance identified energy efficiency
improvements as part of a mortgage or sales agreement.
   (5) The availability of applicable government run and
nongovernmental assistance and loan programs as well as rebates.
   (6) The expected value of establishing these requirements,
including all of the following:
   (A) Reductions in greenhouse gas emissions.
   (B) Reductions in annual and peak energy demands.
   (C) Reduction in customer utility bills.
   (7) The appropriate methods of informing and educating the public
as to the new requirements.
   (8) Any other considerations deemed appropriate by the commission.

   (c) Prior to adopting requirements for time of sale energy
efficiency audits, the commission shall do both of the following:
   (1) Consult with representatives from the Contractor's State
Licensing Board, the Department of Real Estate, the Department of
Housing and Community Development, the Public Utilities Commission,
investor-owned utilities, publicly owned utilities, cities and
counties, real estate licensees, home builders, mortgage lenders,
home appraisers and inspectors, home energy rating organizations,
consumer groups, environmental and environmental justice groups.
   (2) Hold at least three public hearings in geographically diverse
locations throughout the state.