BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 542| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: SB 542 Author: Wiggins (D) and Strickland (R) Amended: 5/28/09 Vote: 21 SENATE ENERGY, U. & C. COMMITTEE : 10-1, 4/21/09 AYES: Padilla, Calderon, Corbett, Cox, Kehoe, Lowenthal, Simitian, Strickland, Wiggins, Wright NOES: Benoit SENATE APPROPRIATIONS COMMITTEE : 8-4, 5/28/09 AYES: Kehoe, Cox, Corbett, DeSaulnier, Hancock, Leno, Oropeza, Yee NOES: Denham, Runner, Walters, Wyland NO VOTE RECORDED: Wolk SUBJECT : Solar energy and energy efficiency programs SOURCE : Author DIGEST : This bill requires the California Energy Commission to inform solar energy system installers of existing statutory requirements. This bill requires the Public Utilities Commission to develop and implement a strategy to expand participation of multi-unit residential and commercial rental properties in existing energy efficiency and solar energy programs. ANALYSIS : Under existing law, the Public Utilities Commission (PUC) has regulatory authority over public CONTINUED SB 542 Page 2 utilities, including electrical corporations, as defined. A decision of the PUC adopted the California Solar Initiative. Existing law requires the PUC to undertake certain steps in implementing the California Solar Initiative. Existing law establishes a surcharge on all natural gas consumed in the state and upon electricity distributed by the state's three largest electrical corporations, to fund certain low-income assistance programs, cost-effective energy efficiency and conservation activities, and public interest research and development. This bill requires the PUC, by July 1, 2010, to develop and implement a strategy to expand the participation of multiunit residential and commercial rental properties in utility energy efficiency and solar energy programs and to prepare and submit a report on the program to the Legislature by that date. This bill requires the PUC to ensure that the strategy implemented does not result in any additional ratepayer surcharges, is funded through existing programs or the American Recovery and Reinvestment Act of 2009, and is cost effective for utility customers. This bill requires the PUC to consider, in developing the strategy, whether synergies exist between its energy efficiency programs and the solar energy programs of the California Solar Initiative, that, in the determination of the PUC, can make energy efficiency and solar investments cost effective for utility customers in multiunit commercial and residential rental properties. This bill requires the PUC, in implementing the California Solar Initiative, to ensure that solar energy system installers are informed that if the solar energy system is to be installed on a manufactured home, that the installation is required to comply with certain statutory and regulatory requirements pertaining to the alteration of manufactured housing. Existing law requires the California Energy Commission (CEC), in consultation with the PUC, local publicly owned electric utilities, and interested members of the public, to establish and thereafter revise eligibility criteria for solar energy systems and to establish conditions for ratepayer funded incentives that are applicable to the California Solar Initiative. SB 542 Page 3 This bill requires the CEC to ensure that solar energy system installers are informed that, if the solar energy system is to be installed on a manufactured home, the installation is required to comply with certain statutory and regulatory requirements pertaining to the alteration of manufactured housing. This bill requires the CEC to inform installers about the permitting processes in its next update of the California Solar Initiative Program Handbook. Background Since the 2000-01 energy crisis, California policy has elevated energy efficiency measures as the highest priority activity for meeting California's energy needs. Energy efficiency is often cost effective, cheap, clean, and relatively quick to implement. The PUC authorized substantial energy efficiency programs for the major investor-owned utilities for the period 2006-08. This program is expected to produce $2.7 billion in net benefits, reducing customer bills. Moreover, these savings are the equivalent of avoiding three large powerplants over the next three years, eliminating 3.4 million tons of carbon dioxide in 2008, equivalent to taking 650,000 cars off the road. For the 2009-2011 period, the PUC has adopted slightly more ambitious goals. For the longer term, the PUC has adopted an energy efficiency strategic plan which dovetails with our AB 32 greenhouse gas reduction goals. This plan has at its cornerstone four "Big and Bold" initiatives: 1. All new residential construction will be zero net energy by 2020. 2. All new commercial construction will be zero net energy by 2030. 3. Air conditioning and heating systems will be performance optimized for California's climate. 4. All low-income customers will be provided an opportunity to participate in California's low income energy efficiency programs by 2020. The energy efficiency programs take many forms and target SB 542 Page 4 all customer classes, from residential to commercial. One group of customers who gets relatively little attention is renters. The difficulty of reaching out to renters is that while the renter pays the energy bill, the landlord owns the structure and, often, the appliances. It therefore makes little sense for a landlord to install energy-saving double-paned windows when the cost savings accrue to the tenant. Alternatively, a renter would not bother paying for a new, energy-efficient air conditioner if he had to leave the unit behind once he moved on. Renters are a large portion of Californians, comprising 43 percent of California households. While there are a few programs targeted at renters, and a special energy efficiency program for low-income households, renters are, in the words of one of California's large investor-owned utilities, "a very large and largely unserved market." FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No SUPPORT : (Verified 5/28/09) R?colte Energy Western Center on Law and Poverty ARGUMENTS IN SUPPORT : The author has had constituents who have wanted to install photovoltaic systems on their manufactured homes, but have run into a government bureaucracy which is unsure of which agency has jurisdiction and what rules apply. The provisions in Sections 1 and 2 of the bill are intended to remove the uncertainty by citing the specific applicable code sections and regulations. The author is also concerned that a substantial portion of customers pay for the state's energy efficiency programs and the California Solar Initiative, but because of their housing status cannot participate in either. This bill is an attempt to focus the PUC's effort in this area. DLW:mw 5/29/09 Senate Floor Analyses SB 542 Page 5 SUPPORT/OPPOSITION: SEE ABOVE **** END ****