BILL ANALYSIS AB 1530 Page 1 Date of Hearing: April 27, 2009 ASSEMBLY COMMITTEE ON NATURAL RESOURCES Nancy Skinner, Chair AB 1530 (Skinner) - As Amended: April 20, 2009 SUBJECT : Greenhouse gas (GHG) emission reduction measures SUMMARY : Requires the Air Resources Board (ARB) to adopt protocols to validate energy efficiency measures claimed as GHG reductions. EXISTING LAW requires ARB, pursuant to AB 32, to adopt a statewide GHG emissions limit equivalent to 1990 levels by 2020 and adopt regulations to achieve maximum technologically feasible and cost-effective GHG emission reductions. THIS BILL requires ARB to adopt protocols for the evaluation, measurement and verification of any GHG reduction measure that relies on energy efficiency, in consultation with the Public Utilities Commission (PUC), Energy Commission, and energy efficiency experts. FISCAL EFFECT : Unknown COMMENTS : California's energy efficiency programs have developed over the past thirty years through a combination of legislative mandates, PUC policies and initiatives, and actions of public and privately owned utilities. While California is currently a recognized leader in energy efficiency, there is no central entity or organization within the state that has the mandate, independence or expertise to develop and implement clear technical standards for evaluation, measurement and verification (EM&V) of energy efficiency measures. It is not easy to implement energy efficiency programs, much less successful programs that ensure long-term sustained savings at a reasonable cost. While the PUC has taken the lead in energy efficiency over the past decades, its fundamental purpose is to ensure safe and reliable utility services at just and reasonable rates. The PUC was not designed to implement long-term, billion dollar programs that rely heavily on specific expertise in diverse fields, including engineering, behavioral AB 1530 Page 2 science, building construction and management, and economics. PUC staff positions are largely designated for policy analysts and the engineering positions are primarily geared towards utility plant issues. Because the PUC is not required to publish regulations or standards, the EM&V process, protocols and methodologies are unpublished and are therefore difficult to find and understand. These issues will become even more important as the state attempts to measure reductions in GHG emissions from policies and programs, and in attempting to value these emissions reductions for the purpose of a cap and trade program. In its AB 32 Scoping Plan, ARB is counting on increased energy efficiency for over 15% of the GHG reduction measures necessary to meet the 2020 limit. Most of the tons are expected to come from additional building and appliance efficiency, to reduce electricity demand and natural gas use. This will require further improvements in efficiency standards for both buildings and appliances, as well as additional spending for rebates and other incentives. This bill requires ARB to adopt protocols for EM&V to assure that energy efficiency measures claimed as GHG reductions are reliable. REGISTERED SUPPORT / OPPOSITION : Support None on file Opposition None on file Analysis Prepared by : Lawrence Lingbloom / NAT. RES. / (916) 319-2092