BILL ANALYSIS 1
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SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
ALEX PADILLA, CHAIR
AB 2132 - Carter Hearing Date: June
29, 2010 A
As Amended: May 28, 2010 FISCAL B
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DESCRIPTION
Existing law authorizes a surcharge (public goods charge (PGC))
to be collected from gas and electric customers to be used to
fund energy efficiency, research, and investment in renewable
resources. A portion of the PGC is deposited into the Renewable
Resource Trust Fund (RRTF) to promote development and expansion
of in-state renewable electricity generation which is
administered by the California Energy Commission (CEC).
Existing law creates the California Solar Initiative (CSI) which
includes the goal of placing solar energy systems on 50% of new
homes in 13 years and directs $400 million from the RRTF to be
used by the CEC which has created the New Solar Homes
Partnership (NHSP) to achieve this goal.
Existing law requires the CEC to develop and implement a
comprehensive program to achieve greater energy savings in
existing residential and non-residential building stock,
including energy assessments, cost-effective energy efficiency
improvements, financing options, public outreach, and education
efforts.
This bill allows RRTF funds, until January 1, 2012, to be used
for energy improvements in existing buildings built prior to
July 1, 1978.
BACKGROUND
California Solar Initiative (CSI) - Effective in 2007, the CSI
calls for the installation of 3,000 megawatts (MW) of new,
solar-produced electricity by 2016. Targeted expenditures under
the CSI, funded by ratepayers, are $3.3 billion over ten years,
distributed among three distinct program components:
investor-owned utilities, $2.167 million/1940 MW; New Solar
Homes Partnership, $400 million/360 MW; and publicly owned
utilities, $784 million/700 MW.
Of the $400 million allocated to the NHSP, 7.32 MW of solar has
been installed on 2,825 new homes through May of this year. This
year the CEC has seen an uptick in requests for new installation
and has almost 6,000 reserved applications for a total of almost
14 MW of solar on new homes. Total costs for both installed and
pending applications is $59 million for 8,772 homes and more
than 21 MW of solar.
Renewable Resources Trust Fund - The RRTF was established in
1997 to promote development and expansion of in-state renewable
electricity generation. Since the adoption of the CSI, the CEC
has primarily used the RRTF to fund the NHSP and its current
balance is reported to be $120 million. When new home
construction slowed, so did installations of solar on those new
homes. With a growing balance in the RRTF legislation has
authorized additional uses of the funds including a $50 million
loan to assist with the financing of Property Assessed Clean
Energy programs (SB 77 (Pavley), Chapter 15, Statutes of 2010)
and a $10 million loan to the Department of Fish & Game to
facilitate advance mitigation for ARRA eligible renewable
projects in the (SBX34 (Padilla), Chapter 9, Statutes of
2009-10, 8th Ex. Session).
Energy Efficiency in Existing Buildings - In 2005 the CEC
released the report "Options for Energy Efficiency in Existing
Buildings" which included recommended strategies to increase
energy efficiency in existing buildings. Approximately 75% of
California's homes and apartments - more than 8 million homes -
were built prior to the 1982 Building Standards. This was the
first version of the Standards to include energy performance
requirements, sometimes referred to as the "Second Generation
Standards." Prior to that time the Department of Housing and
Community Development had adopted insulation only standards in
1975 and the CEC had adopted whole-building prescriptive
standards in 1977. On average, these pre-1982 homes are smaller
than new homes and have less energy-using equipment (such as air
conditioning), and hence use less energy. Many have been
upgraded since they were initially constructed and have been
made more efficient through participation in utility efficiency
programs or because of applicable standards. Generally, though,
considerable potential for increasing the efficiency of energy
use in California's older homes remains untapped. Older
commercial buildings in California, where half of the floor area
was built prior to the first energy standards, are similarly
affected by underinvestment in efficiency.
California's commercial building stock is much more diverse than
the residential stock. Approximately 46 percent of commercial
building space was built before the 1978 building standards.
Large offices, retail and non-refrigerated warehouses represent
approximately half of the total nonresidential space. These data
indicate that over five million square feet of nonresidential
buildings may benefit from efficiency upgrades amounting to
significant further savings.
CEC Program for Existing Buildings - In 2009 the Legislature
directed the CEC (AB 758, Skinner, Chapter 470, Statutes of
2009) to develop and implement a comprehensive program to
achieve greater energy savings in existing residential and
commercial buildings. The program may include energy audits,
energy efficiency improvements and financing options. The CEC
is in the early stages of implementing that program; the pending
2010-11 budget contains provisions for new positions and the CEC
has issued a request for proposals (RFP) to assist in research
and project development.
COMMENTS
1)Author's Purpose . It is estimated that the majority of
existing buildings in California were built before 1978, many
of which are currently not up to Title 24 (California's energy
efficiency standards for buildings) standards. AB 2132 gives
the CEC the option of spending surplus money (~$120 million)
in the RRTF for energy efficiency improvements in existing
buildings that are not subject to current building standards
for the calendar year of 2012. The author's purpose is to
help create jobs while providing energy savings and ratepayer
benefits for pre July 1, 1978 built residential and
non-residential buildings that are currently not meeting Title
24 standards.
The NHSP author thinks has been undersubscribed during recent
years due to the lack of new construction projects, and
currently has a large uncommitted balance of approximately
$120 million.
2)Energy Efficiency for Existing Buildings . The need to reach
into older residential and commercial building stock for
energy efficiency improvements is critical. The Legislature
responded with the AB 758 program last year but that program
will not be up and running for several months, if not a few
years. Consequently, an appropriation of funds for only the
calendar year of 2011 would not provide sufficient time to get
the AB 758 program running or to develop a new program and
guidelines just for the funding authorized by this measure.
The CEC's recent experience with the administration of funds
under the ARRA is illustrative of the time it can take to get
money out the door. Those funds were authorized by Congress
in March of 2009 and awards are still being process by the
CEC.
3)Reallocation of NHSP Funds . According to the Governor's
2010-11 Proposed Budget, there is a projected balance of
approximately $170 million in the RRTF which assumes a payback
of an outstanding $35 million loan, leaving a more realistic
balance of $135 million which does not include a reduction for
loans authorized by legislation earlier this year which total
$60 million. The author argues that these are "surplus funds
which should be put to work to create jobs and energy savings
today, while keeping with the intent" of the fund's original
purpose. She further notes that "with over 12% unemployment,
these jobs and the resulting ratepayer relief are greatly
needed immediately."
Opponents to this measure note that there is growth in the
number of applications for solar in new homes and that these
funds are being put to work. They are also concerned that
with the sunset of the PGC at the end of 2011 additional
funding for the NHSP may be at risk making it more important
to retain these funds to meet the NHSP program goals
ASSEMBLY VOTES
Assembly Utilities & Commerce 13-0
Assembly Natural Resources 5-0
Assembly Appropriations 11-5
Assembly Floor 66-8
POSITIONS
Sponsor:
Author
Support:
California Labor Federation
Coalition of California Utility Employees
The Greenlining Institute
Small Business California
Oppose:
Applied Materials
California Public Utilities Commission
California Solar Energy Industries Association
Environment California
Solar Alliance
Solar City
SunRun
Maurice Pitesky
AB 2132 Analysis
Hearing Date: June 29, 2010