BILL ANALYSIS AB 1530 Page 1 ASSEMBLY THIRD READING AB 1530 (Skinner) As Amended April 20, 2009 Majority vote NATURAL RESOURCES 6-3 APPROPRIATIONS 12-5 ------------------------------------------------------------------ |Ayes:|Skinner, Brownley, |Ayes:|De Leon, Ammiano, Charles | | |Chesbro, | |Calderon, Davis, Fuentes, | | |De Leon, Hill, Huffman | |Hall, John A. Perez, | | | | |Price, Skinner, Solorio, | | | | |Torlakson, Krekorian | | | | | | |-----+--------------------------+-----+---------------------------| |Nays:|Gilmore, Knight, Logue |Nays:|Nielsen, Duvall, Harkey, | | | | |Miller, | | | | |Audra Strickland | | | | | | ------------------------------------------------------------------ SUMMARY : Requires the Air Resources Board (ARB) to adopt protocols for the evaluation, measurement, and verification of any greenhouse gas (GHG) reduction measure that relies on energy efficiency, in consultation with the Public Utilities Commission (PUC), California Energy Commission (CEC), and energy efficiency experts. EXISTING LAW , pursuant to AB 32 (Nunez), Chapter 455, Statutes of 2006, required ARB 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. FISCAL EFFECT : According to the Assembly Appropriations Committee, one-time special fund costs of at least several hundreds of thousands of dollars during 2009-2010 through 2011-2012, to ARB, CEC, and PUC to develop the protocols. (Air Pollution Control Fund, Energy Resources Programs Account, and Public Utilities Commission Utilities Reimbursement Account) 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 AB 1530 Page 2 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 PUC has taken the lead in energy efficiency, its fundamental purpose is to ensure safe and reliable utility services at just and reasonable rates. PUC was not designed to implement long-term, billion dollar programs that rely heavily on specific expertise in diverse fields, including engineering, behavioral 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 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. Analysis Prepared by : Elizabeth MacMillan / NAT. RES. / (916) 319-2092 AB 1530 Page 3 FN: 0001103