BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 758
                                                                  Page  1

          Date of Hearing:   April 20, 2009

                    ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
                                Felipe Fuentes, Chair
                    AB 758 (Skinner) - As Amended:  April 14, 2009
           
          SUBJECT  :   Energy: energy audit.

           SUMMARY  :   Requires the California Energy Commission (CEC) to  
          develop an energy efficiency program for existing residential  
          and commercial buildings.

           EXISTING LAW  : 

          1)Requires the CEC to establish criteria for adopting a  
            statewide home energy rating program for residential  
            dwellings, and requires the CEC to adopt the program in  
            consultation with representatives of the Department of Real  
            Estate, the Department of Housing and Community Development,  
            the California Public Utilities Commission (PUC),  
            investor-owned and municipal utilities, cities and counties,  
            real estate licensees, home builders, mortgage lenders, home  
            appraisers and inspectors, home energy rating organizations,  
            contractors who provide home energy services, consumer groups,  
            and environmental groups.

          2)Requires the PUC to have each electrical corporation identify  
            a separate rate component to collect revenue to fund  
            cost-effective energy efficiency and conservation activities.

          3)AB 2021 (Levine) Chapter 734, Statutes of 2006, requires all  
            electric and natural gas utilities to meet energy efficiency  
            savings targets established by the CEC and the PUC. 

          4)Requires all electric utilities, in procuring energy, to first  
            acquire all available energy efficiency and demand reduction  
            resources that are cost effective, reliable, and feasible. 

          5)Requires the PUC to impose a surcharge on all natural gas  
            customers to fund cost-effective energy efficiency and  
            conservation activities.

           THIS BILL  :  

          1)Requires the CEC to establish a regulatory proceeding to  








                                                                  AB 758
                                                                  Page  2

            develop and implement a comprehensive program to achieve  
            energy savings in  existing  residential and commercial building  
            stock that fall significantly below the current Title 24  
            building standards.

          2)Requires the CEC to coordinate with the PUC and consult with  
            the Department of Real Estate, the Department of Housing and  
            Community Development, investor-owned and publicly owned  
            utilities, and other groups the CEC deems appropriate to  
            develop and implement the program.

          3)Requires the CEC to consider various items when developing the  
            program, including a method to inform and educate the public  
            about the need for an energy efficiency program, and the most  
            effective way to report the audit results to the building  
            owner.

          4)Requires the PUC to open a proceeding to investigate the  
            ability of electrical corporations to provide various energy  
            efficiency financing options to their customers for the  
            comprehensive energy efficiency program.

          5)Requires the PUC, after specified conditions, to authorize  
            each electrical corporation to provide a number of low- or  
            no-cost energy efficiency audits, and requires the PUC to  
            provide an annual report to the Legislature and the CEC.

          6)Requires local publicly owned electric utilities to implement  
            an energy efficiency program and report annually to its  
            customers and the CEC specified information about the program.

           FISCAL EFFECT  :   Unknown.

           COMMENTS  :   According to the author, the purpose of this bill is  
          to capture energy savings in existing buildings.

          1)   Why energy efficiency  :  State energy policy prioritizes  
          energy efficiency to reduce energy usage which diminishes the  
          need for new power plants and transmission lines.  Energy  
          efficiency measures are an inexpensive alternative to investment  
          in infrastructure, and reduces the proliferation of greenhouse  
          gas (GHG) emissions.  

          To reduce energy usage in existing buildings, the CEC and most  
          of the utilities provide information on energy-efficiency  








                                                                  AB 758
                                                                  Page  3

          do-it-yourself audits.  The CEC issued a booklet directed at  
          homebuyers that provides information about home energy audits  
          and rating programs and markets this information through home  
          warranty company websites.  Many of the recommendations require  
          nominal expenses that render large savings.  Some low-cost  
          examples include replacing incandescent light bulbs with compact  
          fluorescent ones, using motion sensor controls for exterior  
          lighting, and caulking, sealing, or applying weatherstrip to  
          seams, cracks, and openings to the outside around windows and  
          doors.

          The Legislature directed the CEC to develop a statewide estimate  
          of all potentially achievable cost-effective electricity and  
          natural gas efficiency savings and establish statewide annual  
          targets for energy efficiency savings and demand reduction over  
          10 years (AB 2021, Levine, Chapter 734, Statutes of 2006).  To  
          complement the legislative directives the CEC, in its Integrated  
          Energy Policy Report, strongly supports capturing all  
          cost-effective efficiency savings potential and recommends  
          pursuing legislation that would require energy audits and  
          cost-effective levels of efficiency improvements at the time of  
          sale of a building.  In addition, the CEC's Report on Energy  
          Efficiency in Existing Buildings recommends "Time of Sale  
          Information Disclosure" where California should begin requiring  
          the disclosure of home energy ratings when a house is sold.   
          Both recommendations are based on the CEC evaluation of the  
          potential savings achieved if cost-effective energy efficiency  
          measures were applied to existing buildings:  9% of statewide  
          electricity consumption, 11% of peak demand, and 5% of natural  
          gas consumption.  

          On November 21, 2007, the Building Industry Association held a  
          Climate Change Task Force, at which a consultant presented a  
          report that determined that 31% of California's electricity is  
          used in housing, and 28% of GHG emissions are attributable to  
          the energy used for residential and commercial buildings.  Of  
          the 28%, existing housing constitutes 99% of the GHG emissions.   
          The same entity provided a Retrofit Study and calculated that  
          single-family homes built before 1960 constitute 37% of GHG  
          emissions.  Those built during the 1970s contribute 20%.  These  
          figures gradually decrease by decade and those built during the  
          naughts (2000s), only contribute about 8% of GHG emissions. 

          2)   Bigger and Bolder energy efficiency efforts  :  The PUC,  
          through its "Big Bold Energy Efficiency Strategies," is  








                                                                  AB 758
                                                                  Page  4

          considering three programs designed to move all new residential  
          and commercial construction to a zero net-energy standard so  
          that the energy the building consumes is offset by the amount of  
          energy it produces.  The goal of this program is to reach zero  
          net-energy consumption in residential construction by 2020 and  
          in commercial construction by 2030.  

          To promote energy and water efficiency, the Governor signed an  
          Executive Order (S-20-04) creating the Green Building Initiative  
          for both public and private buildings. This initiative sets  
          goals to reduce electricity use and create more energy-efficient  
          structures throughout the state.

          3)   AB 2678 (Nunez)  :  Last year, AB 2678 (Nunez), when heard in  
          this committee, required the CEC to establish an ongoing  
          proceeding to develop requirements for time-of-sale  
          energy-efficiency audits for residential and commercial  
          buildings.  Due to the complex nature of imposing an additional  
          significant requirement on realtors and lending institutions at  
          the time of sale of residential and commercial buildings, this  
          bill was amended and struck the required time-of-sale audits.   
          AB 2678 was held in Senate Appropriations Committee. 

          AB 758 includes a provision that ensures that energy audits for  
          residential buildings are not required as a condition of sale  
          and do not unreasonably or unnecessarily affect the home  
          purchasing process or the ability for individuals to rent  
          housing.  However, the author would like to retain the authority  
          to use time-of-sale as a trigger for a comprehensive audit, but  
          not prevent a transfer of title if the work isn't complete.  The  
          bill includes a provision that states that a transfer of  
          property subject to this program shall not be invalidated solely  
          because of the failure of a person to comply with a provision of  
          the program.

           REGISTERED SUPPORT / OPPOSITION  :   

          Support 
           
          Breathe California
          Global Green USA (sponsor)
          The Utility Reform Network (TURN)

           Opposition 
           








                                                                  AB 758
                                                                  Page  5

          None on file.
           
          Analysis Prepared by  :    Gina Adams / U. & C. / (916) 319-2083